As Vital Farms, Inc. (VITL – Free Report) prepares to release its third-quarter 2024 earnings report on Nov. 7 before the opening bell, anticipation is building around its revenue growth potential. Several strategic initiatives and trends suggest that the company is poised for a strong performance.
With a commitment to ethical food production and high-quality, pasture-raised products, Vital Farms has established a distinctive position in the competitive food industry. The Zacks Consensus Estimate for third-quarter revenues stands at $144.7 million, which indicates an increase of 31% from the prior-year reported figure.
The bottom line is also expected to have risen year over year. The Zacks Consensus Estimate for earnings per share has been unchanged over the past 30 days at 14 cents, indicating an improvement from the 10 cents reported in the year-ago period.
Vital Farms has a trailing four-quarter earnings surprise of 82.5%, on average. In the last reported quarter, this Austin, TX-based company surpassed the Zacks Consensus Estimate by a margin of 71.4%.
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Key Factors to Observe for VITL’s Q3 Earnings
Vital Farms has been poised for a robust third-quarter performance, driven by its strategic expansion, operational efficiencies and ability to capitalize on market trends. The company’s growth is likely to have been driven by an enhanced distribution network, cost-effective operations and a diversified product portfolio.
VITL has actively increased its distribution points across natural and conventional retail channels. By enhancing shelf space and visibility in stores, the company has made its products more accessible to consumers. This broader distribution network not only boosts brand recognition but also drives higher sales volumes.
On its second-quarter earnings call, Vital Farms reported a 19% year-over-year increase in total distribution points in the natural channel, reaching 453, and a 17% increase in the food channel, reaching 215. This growth reflects the strong consumer demand for its premium products.
Another key component of the company’s growth strategy is the significant expansion of its family farm network, which has risen from more than 300 farms at the start of the year to above 350. This expansion highlights VITL’s ability to attract and support new farmers, which is essential for scaling operations and meeting the rising consumer demand for its products.
Vital Farms has been expanding its product offerings, which is crucial for attracting diverse consumer segments. The recent relaunch of its butter line, emphasizing quality and sustainability, is indicative of the company’s strategy to cater to evolving consumer preferences.
What the Zacks Model Predicts About VITL
As investors prepare for Vital Farms’ third-quarter earnings, a question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Vital Farms this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.
Vital Farms currently flaunts a Zacks Rank #1 but has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Ollie’s Bargain Outlet Holdings, Inc. (OLLI – Free Report) currently has an Earnings ESP of +1.50% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter fiscal 2024 earnings per share is pegged at 57 cents, suggesting 11.8% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ollie’s Bargain’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $519 million, which indicates an increase of 8.1% from the figure reported in the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
Sweetgreen, Inc. (SG – Free Report) currently has an Earnings ESP of +4.76% and a Zacks Rank of 3. SG is likely to register growth in its top and bottom lines when it reports third-quarter 2024 results. The Zacks Consensus Estimate for Sweetgreen’s quarterly revenues is pegged at $173.7 million, which indicates an increase of 13.2% from the figure reported in the prior-year quarter.
The consensus estimate for SG’s bottom line is expected to rise 27.3% from the year-ago quarter’s reported number. Sweetgreen delivered a negative average earnings surprise of almost 12% in the trailing four quarters.
Jack in the Box Inc. (JACK – Free Report) presently has an Earnings ESP of +1.28% and a Zacks Rank of 3. The company is likely to register a top-line decline when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for JACK’s quarterly revenues is pegged at $357.9 million, which indicates a dip of 3.9% from the figure reported in the prior-year quarter.
The consensus estimate for Jack in the Box’s quarterly earnings has declined by 2 cents over the past 30 days to $1.12 per share. The figure indicates growth of 2.8% from the year-ago quarter’s reported number. JACK delivered an average earnings surprise of 1.7% in the trailing four quarters.
