Vital Farms (VITL) Unveils Ambitious Long-Term Financial Goals
Vital Farms VITL has unveiled an exciting update on its long-term financial targets, shedding light on its ambitious growth plans.
Vital Farms aims to achieve a milestone by generating annual net revenues of more than $1 billion within its existing product categories and a gross margin of at least 35% of net revenues by the end of 2027. Enhancing the total distribution points (TDPs) within the Food Channel is expected to be the primary driver of substantial net revenue growth.
The company has been embracing automation and expanding the use of Egg Central Station, which likely refers to a centralized or automated system for managing eggs or related products. This enables it to achieve economies of scale, potentially reducing costs and increasing efficiency. Consequently, Vital Farms expects an adjusted EBITDA margin of 12-14% by 2027.
VITL is focused on driving significant gains in awareness, which is expected to lead to higher household penetration. Over the next few years, the company’s primary goal is to integrate an additional 250 family farms into its operations and engage 20 million new households.
Vital Farms' upcoming plans involve expanding its product range by establishing new processing and packaging facilities in the coming years. This expansion initiative will include the addition of 8,000 stores within its distribution channel.
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What’s More?
In addition to its long-term goals, VITL provided its fiscal 2023 outlook. The company anticipates net revenues to exceed $465 million in 2023. However, it expects lower growth rates and gross margins in the second half of the year from the first half.
Management upholds its expectation of surpassing $35 million in adjusted EBITDA, highlighting its commitment to financial stability and projects capital expenditure of $16-$21 million for 2023, reflecting the company’s continued investment in its supply chain and operations.
Vital Farms' guidance for these targets assumes a stable operating environment without significant disruptions to the supply chain, customers, or consumers, including potential challenges arising from adverse macroeconomic factors.
Shares of this Zacks Rank #3 (Hold) company have lost 4.1% in the said period compared with the industry’s decline of 2.8%.
Three Solid Picks
We have highlighted three better-ranked stocks, namely MGP Ingredients, Inc. MGPI, Flowers Foods FLO and Celsius Holdings CELH.
MGP Ingredients produces and markets ingredients and distillery products to the packaged goods industry. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 5.8% and 10.4%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of around 18%, on average.
Flowers Foods emphasizes providing high-quality baked items. The company currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Flowers Foods’s current financial-year sales suggests growth of 6.7% from the year-ago reported figures. FLO has a trailing four-quarter earnings surprise of 7.6%, on average.
Celsius Holdings, which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 100% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 88.9% and 170.7%, respectively, from the year-ago reported numbers.
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Vital Farms, Inc. (VITL) : Free Stock Analysis Report
