Vital Farms Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Robert Moskow - TD Crown - Analyst : Hi, thanks for the question and welcome to Brian. I wanted to know if you could dive a little deeper into the volume in the quarter of 19%. How much of that is from like filling up inventory at customers and how much of that would you consider like sustainable demand growth from a consumer standpoint. And then also on the price mix was which was a lot higher than I thought. Is there a mix component to that that's unusual that that you might want to dig into? Thanks.

Question: Robert Moskow - TD Crown - Analyst : Okay, but just to clarify, volume up 19%, the retail tracking data doesn't show it quite so high, so you know as we look forward to 2026, it is that's the reason I'm asking is like is high 10s volume growth still, conceivable in 206 based on what you see? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2025 / 1:30PM, VITL.OQ - Q3 2025 Vital Farms Inc Earnings Call

Question: Robert Moskow - TD Crown - Analyst : Great. Okay, thank you.

Question: Jon Andersen - William Blair - Analyst : Hey, good morning everybody. Congratulations and welcome, Brian. I guess I wanted to ask about the additions in the farmer editions in the quarter, you kind of stepped-up farmer ads sequentially through the year '25 to 50 last quarter to 75, and I'm just trying to kind of get a sense for to what extent, that is just kind of. Serendipity in terms of, farmer availability versus you know deliberate as you kind of now have the third line installed in ECS and are looking to kind of enter' 26 with increased supply capabilities. Thanks.

Question: Jon Andersen - William Blair - Analyst : Okay, and as a follow-up, I, we noticed that. Your GDP growth, distribution growth, picked up nicely in in the September quarter. I'm assuming there are multiple factors obviously that go into that, your supply situation, ability to, sell in more items, to your retail customers, but, it still looks like there's a long way for you to go to. Let's say establish an assortment at your big retail customers that it's maybe comparable to some other brands in the category. Could you just talk a little bit about your selling efforts, what you experienced, with recess this fall, and how you're thinking about distribution opportunities in '26 as well given the better supply situation? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2025 / 1:30PM, VITL.OQ - Q3 2025 Vital Farms Inc Earnings Call

Question: Jon Andersen - William Blair - Analyst : Very good, thank you.

Question: Megan Alexander Clapp - Morgen Stanley - Analyst : Hi, good morning. Thanks for taking your question. I wanted to follow-up on Rob's question on the 4th quarter. So based on the guide and your comments, it does seem to imply that you're expecting just a bit of an underlying acceleration in volumes if we account for that that pull forward Thilo you mentioned and your comments that price mix maybe decelerate a bit. Obviously, the scanner data that was helpful commentary in terms of what we've seen more recently, but could you just help us frame your expectations for volumes and what's driving that underlying acceleration implied in the fourth quarter? Thank you.

Question: Megan Alexander Clapp - Morgen Stanley - Analyst : Awesome, helpful, thank you. And then and then just to follow-up on pricing, I wondered if if you could comment on you know what you're seeing in terms of price gaps and elasticity. I think, last quarter you. Said that price gaps had widened, but we're within an acceptable range. It does seem like there's been some reports of avian flu, though seems more contained and maybe gaps are widening a bit as that's, kind of playing out. But as you look at the scanner data, your volume share gains are also accelerating. So I just wondered if you could just talk about that dynamic and kind of what it's telling you about elasticity and consumer behavior. Thanks.

Question: Megan Alexander Clapp - Morgen Stanley - Analyst : Awesome thank you.

Question: Scott Marks - Jefferies - Analyst : Hey, good morning. Thanks so much for taking our questions and congrats on a nice quarter. Wanted to just come back to the question of distribution that's been discussed already. I know in the past you've talked about how the business is already in. So many doors and you kind of see more of the growth from here coming from getting that extra item, that extra skew on shelf. So just wondering if you can give us an update on how you're thinking about that, as we head into '26 in terms of the split between new doors versus new items on the shelf. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2025 / 1:30PM, VITL.OQ - Q3 2025 Vital Farms Inc Earnings Call

Question: Scott Marks - Jefferies - Analyst : Appreciate that. Thanks. And then next question would be the, your shipping and distribution expense, although it came in a little bit higher year for year and still came in below what some folks were looking for. So just wondering if you can help us understand maybe what was the driver of that and how we should be thinking about that expense item moving forward. Thanks.

Question: Scott Marks - Jefferies - Analyst : Appreciate it. Thanks, pass it on.

Question: John Baumgartner - Mizuho Securities - Analyst : Good morning thanks for the question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2025 / 1:30PM, VITL.OQ - Q3 2025 Vital Farms Inc Earnings Call

Question: John Baumgartner - Mizuho Securities - Analyst : Russ. You noted in the past the very long conceivable runway for growth from the pool of potential new farmers that's out there, and I'm curious, given the volatility and uncertainty in the farming community year-to-date between tariffs, exports, low prices for row crops. I'm curious what you're seeing in of these conditions may be enhancing the interest among farmers or accelerating the adoption of pasture raised production, given, better visibility into a domestic market, higher returns versus current operations. I mean, has that been a factor at all in the

Question: John Baumgartner - Mizuho Securities - Analyst : Thanks for that. And then to follow-up on the distribution growth and the velocities, the GDP growth has accelerated nicely throughout the year with the increase in supply. But I think more recently the volume velocity has inflected positives since maybe like the middle of the summer. And I'm wondering if you can delve into that a bit more, this inflection in velocity. Is that largely reflective of a shift favoring more medium or heavy buyers? Is it more reflective of a changing business mix between retailers and channels? Just any thoughts there? Thank you.

Question: John Baumgartner - Mizuho Securities - Analyst : Thank you.

Question: Matt Smith - Stifel - Analyst : Hi, good morning. Thanks for taking the question, Thilo. The fourth quarter or the implied fourth quarter guidance suggests margins still nicely above the 2027 targets despite some hypercare spending, as you called it. Is the level of promotional support and marketing at appropriate levels is exit this year, is there an opportunity to flex that higher as you see strong household penetration and awareness gains? And one other consideration as you fill the new production line at Springfield. Should that be a headwind margin exiting the year, or is that going to achieve a throughput that mitigates that?

Question: Matt Smith - Stifel - Analyst : Thank you for that. And as a follow-up to your comments about incremental items in existing doors, in the past you've talked about some of these incremental items being a mixed tailwind as you get more premium items on the shelf. Is that still the case today, or is the assortment changed as we think about some of the, six counts of medium eggs and other items that you've introduced in the past? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2025 / 1:30PM, VITL.OQ - Q3 2025 Vital Farms Inc Earnings Call

Question: Eric Des Lauriers - Craig-Hallum Capital Group - Analyst : Great, thank you for taking my questions and congrats on another very impressive quarter here. Just one question from me looking to drill down a bit more into consumer behavior amid these widening price gaps. So, great to see the continued strength in demand. It's clear your existing customers are very loyal. The journey from trial to repeat to heavy user is consistent, but I'm wondering if you're seeing any impact on trial as a result of the widening price gaps. Thank you.

Question: Eric Des Lauriers - Craig-Hallum Capital Group - Analyst : That's all very helpful. I appreciate the call. Thank you.

Question: Benjamin Mayhew - BMO Capital Markets - Analyst : Hey guys, thanks for the questions and welcome Brian. I guess I'll start with can you talk about the impact of high competing protein prices, and do you see that driving more demand into the eggs which are relatively more affordable on a per serving basis?

Question: Benjamin Mayhew - BMO Capital Markets - Analyst : Okay, that's fair. And then on slide 12 in your deck, your average item sold has once again surpassed your average weekly dollars. Can you explain why this may be an important indicator of your volume, led strategy and ability to manage supply versus demand over time?

Question: Benjamin Mayhew - BMO Capital Markets - Analyst : Thanks, that's very helpful, guys. I'll leave it there.

Question: Joe Feldman - Telsey Advisory Group - Analyst : Yeah, hi, good morning, guys. It's actually Joe Feldman on Sarang today. I had a quick question about CapEx. I think Thilo, you mentioned that there would be a little bit of a, I guess because of timing, there'd be a little lower this year, and I'm wondering, does that just get made up next year and how you guys were initially thinking about CapEx for 2026?

Question: Joe Feldman - Telsey Advisory Group - Analyst : That's helpful. Thank you. And then this might be a little bit more of a technical question, but with the ECS, and I guess we may see it at the analyst event, but I'm just curious, how does the division of the work or the labor happen among the three lines? Like is one line dedicated to just I don't know, regular eggs versus organic eggs or like how does, I guess how do you run the different lines and you know how I understand how it increases capacity but how does that all kind of happen I guess is my question.

Question: Joe Feldman - Telsey Advisory Group - Analyst : That's great. Thank you very much and look forward to seeing you guys soon.