Q2 Rundown: Vital Farms (NASDAQ:VITL) Vs Other Perishable Food Stocks
As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the perishable food industry, including Vital Farms (NASDAQ:VITL) and its peers.
The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.
The 11 perishable food stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.7%.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Luckily, perishable food stocks have performed well with share prices up 10.7% on average since the latest earnings results.
Vital Farms (NASDAQ:VITL)
With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter.
Vital Farms reported revenues of $147.4 million, up 38.5% year on year. This print exceeded analysts’ expectations by 6.5%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ earnings estimates.
“Vital Farms got off to a great start in the first quarter of the year and we followed with another strong performance in the second quarter. We posted second quarter net revenue of $147.4 million, 38.5% growth versus the same period last year.” said Russell Diez-Canseco, Vital Farms’ President and CEO.
Interestingly, the stock is up 11.5% since reporting and currently trades at $38.74.
Best Q2: Mission Produce (NASDAQ:AVO)
Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.
Mission Produce reported revenues of $324 million, up 23.9% year on year, outperforming analysts’ expectations by 40.3%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
Mission Produce delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 13.2% since reporting. It currently trades at $12.11.
Is now the time to buy Mission Produce? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Cal-Maine (NASDAQ:CALM)
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Cal-Maine reported revenues of $785.9 million, up 71.1% year on year, exceeding analysts’ expectations by 11.5%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 15.8% since the results and currently trades at $89.
Read our full analysis of Cal-Maine’s results here.
Calavo (NASDAQ:CVGW)
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Calavo reported revenues of $179.6 million, down 30.9% year on year. This number was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also produced an impressive beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
Calavo had the slowest revenue growth among its peers. The stock is up 13.8% since reporting and currently trades at $27.36.
Read our full, actionable report on Calavo here, it’s free.
Pilgrim's Pride (NASDAQ:PPC)
Offering everything from pre-marinated to frozen chicken, Pilgrim’s Pride (NASDAQ:PPC) produces, processes, and distributes chicken products to retailers and food service customers.
Pilgrim's Pride reported revenues of $4.56 billion, up 5.8% year on year. This print came in 1.4% below analysts' expectations. Aside from that, it was a very strong quarter as it produced an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ operating margin estimates.
The stock is up 8.7% since reporting and currently trades at $44.83.
Read our full, actionable report on Pilgrim's Pride here, it’s free.
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