Vital Farms Cuts Annual Revenue Outlook Below View; Stock Down Over 11% In Pre-Market

Vital Farms cut its fiscal 2025 revenue guidance to $755–$765 million from a prior outlook of at least $775 million (analysts had expected $776.7 million), citing a temporary disruption in returning to regular order patterns after an ERP system transition in early Q4; the stock was down about 11.4% premarket. The company nonetheless reaffirmed adjusted EBITDA guidance of over $115 million and trimmed capex to $80–$90 million, signaling disciplined cost management despite the top-line miss. Management provided an initial fiscal 2026 revenue target of $930–$950 million (roughly 24% growth at the midpoint) and reiterated a long-term goal of $2 billion in revenue with a 15–17% adjusted EBITDA margin by 2030, indicating confidence in recovery but highlighting near-term execution risk tied to the systems rollout.

Analysis

Vital Farms lowered fiscal 2025 revenue guidance to $755 million–$765 million from a prior outlook of at least $775 million, missing the consensus analyst forecast of $776.7 million and citing a “temporary disruption” in returning to regular order patterns following an ERP system transition at the beginning of Q4 2025; the stock reacted with an ~11.38% pre-market decline to $30.60. Management nevertheless reaffirmed adjusted EBITDA guidance of greater than $115 million and trimmed capital expenditures to $80 million–$90 million from a prior $80 million–$100 million band, signaling targeted cost discipline to protect margins. The company provided an initial fiscal 2026 revenue outlook of $930 million–$950 million (about 24% year-over-year growth at the midpoint of the revised 2025 guide) and reiterated a longer-term target of $2 billion revenue with a 15%–17% adjusted EBITDA margin by 2030, indicating confidence in recovery and growth beyond the near-term execution hiccup. Market sentiment is moderately negative (per signals) and the primary risk remains execution of the ERP transition and the pace of order normalization, which will determine whether top-line momentum and management targets are achievable.

Key Decisions for Investors

• Exercise short-term caution and avoid initiating large new positions until company reports clear evidence of normalized order patterns and operational stability post-ERP transition
• Monitor weekly/monthly order cadence, Q4 operational updates, adjusted EBITDA versus the >$115 million target, and capex execution against the $80M–$90M range as primary catalysts to reassess exposure
• For investors with multi-year conviction in management’s growth targets, consider selectively accumulating on sustained weakness while sizing positions conservatively and planning to hedge near-term execution risk