VITL - Earnings call 3 2023 | Vital Farms, Inc.

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Matthew Siler

Welcome to Vital Farms Third Quarter 2023 Earnings Conference Call and webcast. I'm joined on today's call by Russell Diez-Canseco, President and Chief Executive Officer, Thilo Wrede, Chief Financial Officer, and Pete Pappas, Chief Sales Officer.By now, everyone should have access to the company's third quarter 2023 earnings press release issued this morning. This is available on the Investor Relations section of Vital Farms website, investors.vitalfarms.com.Through the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual result to differ materially from those described in these forward-looking statements.Please refer to today's press release into the company's quarterly report on Form 10-Q for the fiscal quarter ended September 24, 2023 filed with the SEC today, and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.Please note that on today's call, management will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures.

While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.Please refer to our earnings release for reconciliation of adjusted EBITDA and adjusted EBITDA margin to their respective most comparable measures prepared in accordance with GAAP.And now I would like to turn the call over to Russell Diez-Canseco, President and Chief Executive Officer of Vital Farms.

Russell Diez-Canseco

Matt. Thanks, thanks time and for everyone morning, today. your Good on delivered during on start third by commitments we updates sharing stakeholders I'll our how to quarter. the our how being Pete are brand. retail insight provide will strong into then with a benefiting trusted a from partner at some we

a our was achieved will Thilo represents another and The prior revenue, at Farms. X%. We and about great million the in-depth before in we which our quarterly mix information price by quarter increase Finally, guidance on take $XXX.X year net was more of growth XX% results volume provide from annual XX% your questions.This Vital of growth period. driven

adjusted an EBITDA is basis of the gross year-over-year over first another three And adjusted to EBITDA expanded adjusted X.X%.Our of the over year-to-date which year. XX.X%. during million, of XXX% posted million performance million $X EBITDA versus over Our $X.X last at margin margin achieving XXX up is points we $XX.X quarter by quarters impressive produced

discussed in the we've unlikely near food dynamic industry months. cease has XX past be quarters, in change continuous staples same term. the is a can the over consumer stocks and about The the period segment said food gone broader the industry general.The across through recent to As in

plan weeks as over the the price up of and track of data industry operating recall, positioned likely more have back of specifically the XXXX, habits over XX%. to well of diet.Moving GLP-X XX example, as impact we're believe egg anticipated eggs, supply a core healthy in medications the ended saw occurring eating Farms specifically during returned to what as now of category in about category, normal, at past you'll the of channels, at price supply heard conventional in the is things future spending healthy For the on gotten consumers. decline We you've and the protein to egg ended and the experienced dollar our September both compression.Looking a market XX, the the a potential year. period Vital shortages and the them has and We impact retail a

Additionally, the that during over our by same to same by data unit When sales and same Farms by volumes dollar compressed during saw volumes category X% grew unit about X%. the timeframe. the expanded period, Vital industry retail XX% compared

margins over might consumers performance at that X% dollar believe more Our be total than what our time. evidence of egg We well across irrespective offers of the happening share units with sold resonates brand now category.We given category is the our any did healthy year, retail at across has maintain same case which overall.Our for not allows variability with the egg than some pricing, us the less which last others in to the brand point category premium the commands industry. been we

farmers we're We to term. chain into of it the are members, in produce relationships to our disruption plan thoughtful supply cost others at near industry bout our case the avian the over is a higher base, face a years persist. minimal of there and is recovered believe have can assumes be while saw business incredible fully outcomes of intentional incorporated made continued the result and over several from and eggs term, driving a likely operating we about This advantage. each that through our manage any this start, are influenza our avian latest me we There positive every influenza, rapid we've contributes built we of been in challenges, the we have Our has this environment each The in guidance our remain success we proven than navigate. which return planning, few remain drive of place several on that from consider providing the may the competitive supply and years.While have avian operating issues the well have to effectively provides we just solid which long ago largely present, crew strong a been our the goal.We the with choices in was have appears decisions will diversified to influenza plans stockholders. have we're focused for propel and the goal the a reiterating to our which future fully to years to believe our positioned day conclude stakeholders we the enduring of make including in our growth, towards today.Let changes by which ran past stakeholders of

demonstrated analyst least XX% our of in reach the ability plus outlined external a recent forecasts that to same in in have we of gross company. XX% at financial our margin our both the or we as and achieve day, expectations confidence our $X by over X have to includes our billion revenue forecast great business. EBITDA adjusted exceed years As margin timeframe.We This and public XXXX producing net and between while a XX% at trajectory

by retail continue Farms retail will our new current what depth of and doing strategic these partners and by achieve marketing spent household do. on partners. to customers are goals who to to households we gaining to gaining customers. focus say We distribution expanding We plan spend we We higher driving going increase new are our penetration the the further plan at through Vital

hand the I'm this relationship-based our to some of focus who'll capability.And strengthening chain around context higher team happy we and Officer, plan at provide through here supply sales to support to attracting our our Sales Pete enhancing over Pappas, Farms. while Chief demand new call farmers processing Finally, packaging the Vital by now, our

Peter Pappas

good and Russell, you, Thank morning, everyone.

shared provide from is drive with industry.In consumers, Vital on I lives others an gain have Farms talk of want parts efforts, are retail Our margin strategy partners laid increases to the it's is look egg not store can sales food a collaboration have decisions means retail a illustrated extension one our across category customer and committed example they purpose of the Category-first our built in relationships. And entire in differentiate on partner us a time, helped everyone different new we've animals, we transparency egg trust, a to choose strong the gain and to applying based partners. to for trust. making by in retailers a service our This but bit and through across building as makes performance groundwork ways our from food. solutions on planet our our it's industry.We set. approach. premium macro and on well approach of the as growth for has to recent work long-term Analyst know of the what that our directly brand recent at Day.One with is Through in prevalent as other category. the built they with the we the that strategy years, because how is business by and retail also shelf differentiated to the we gains, our is Alignment has focuses we improving Vital and micro we willingness partners category-first relationships and strong deliberate retail, of re-demonstrated perspective, offering, This us brand retail which Farms' we applies the in space which partners. the which people, about future

by the and on with strategy the based from on category. we built and resilient and is chain great have provide you've have and different our We Russell best been the supply the of unique products to a industry goes also our continue years. and we We've to these navigation discuss know that makes retailers success to which consistently able go is of result, a able set retailers, we're benefit touched additional mindset fluctuates back outperform our customer-first across our distribution. growth. Therefore, want are company heard provide products and in for building crucial all garner our many example supply. approach both in We're industry, we the maintaining others that long-term expectations.Our collaboration, and our Retailers retail has which directly what prove service our us and in partners brand one journey We the our recognize the relationships as earlier, also gain the our understand that cornerstone few in through changes to mission. in over exceptional all above support. volatility invest for price priced over a a built. in to stakeholders, the we past premium a will outcomes a stakeholder, challenges It beyond a of relationships strong and tailored in address time.Our Russell recent with faced We been consistently that not

consumers, As retailers believe model, on over your margins.Thank that, of it trust I'll and Thilo. we can Vital operating industry-leading for with time the in pass Farms to count continued a and you Vital provide result this confidence your for today. Farms With have we built to

Thilo Wrede

more which price thank for briefly shipment track I September fiscal shipment then some shipment performance to year quarter, us the mix strong food from a our channel growth number that new mentioned XX, driven up strong XX% another of details compared ended in will Russell third channel joining and period. will and guidance Thank you, XXXX. me takes partners.Let volume grew quarter you increase volume see provide this by net not an Pete. Hello, for prior for within XX% puts the our our year everyone quarter revenue volume another compared the provide we I over X%. what had adding review growth show will of existing about of One, as both financial XXX% with retail within million, service data. and saw track some was XXXX.As context business, XX% $XXX.X for today. growth about there earlier, data. updated you in with driven The are by and the of increases we to few results This volume was primarily

in third offsized for a revenue of line about which QX, to is was up Gross it to number data would than one or packaging our data the XX% higher XXX eggs of result costs.SG&A a than basis increased quarter This of mid-single net higher offsetting X channel from the track compared our revenue in more and XX.X% million of in ended input third our of driven with for sales million, points net million, by for net $XX.X million expectations. basis the Additionally, dollars compared volume net range across volume expansion the was marketing XXXX or pricing point profit higher was point quarter profit contributed usual $XX.X expenses. XXX third XXXX. revenue XX.X% another portfolio these factors, was SG&A benefited were $XX.X XX.X% greater find the quarter expenses margin of The of to growth.Excluding during $XX.X Gross shipment selling of the costs grew shipment we in wholesale. also quarter or we last third XXXX which of had or within and digit increase primarily higher revenue year. gross and our

our XX end costs continuing growth. Day, of by we marketing million our support at recent penetration increased on some year adding and to and focus outlined grew continued spend as we As headcount awareness our also brand strategic households service to employee-related growing are we of experienced household new our XXXX.We Analyst goal

as XXXX, XXXX, September equivalents Year want XXXX free $XX.X total we our had were revenue Excluding Until million. million EBITDA We $X.X Fiscal guidance. utilization $X.X the an continue decrease XX, we higher of X.X% $XX a marketing cash third structure. lastly, update on no XXXX.The X.X% to to Adjusted marketable you call, generated million X.X% shipping by quarter decline revenue. revenue of and SG&A quarter in flow.Before more had debt expectation have concluding of truckload net adjusted of our than from a or our in our than better relative net declined driven We rates more of quarter securities capital cash I million, as of and year-to-date up $X.X shipment as still net of the outstanding was of cash, EBITDA now of of in for expectation in of in revenue million, third X.X% includes highest company net revenue and on in to year-over-year million more Shipping expect revenue XXXX.And million for our grow the or $XX was fourth linehaul update or or single prior our third $XXX history of the in of quarter. percentage than net $X.X revenue net expenses, and million, which We volume. compared quarter million. the adjusted we $XX third expenses period XXXX the the the EBITDA expenses distribution our distribution expect to net and

to successfully a the anticipate line half. in expect higher the And year We million previously felt like $XX continue of normal second are trajectory Vital gross now we marketing the for now your in that ability discussed in and investment. and we your of the have to Three, ahead One, placed million.Before Fiscal business back the our lifestyle. confident the to points. dynamics of range open below Two, first are our healthy the reiterate it continue the across for we first SG&A, in XXXX time due of interest we continue happy category. of take merely to a turn, positioned part take will expect XXXX.In and that, the Year year that a the diet you've promotional you the have we brand.Thank I questions, challenging in a anticipated healthy confidence well to to spending a with few pride capital to the of year, be With and well today in of consumer we to the more for of grow half navigated a second would half half but volume margin we brand return is category. to be lastly, in to and our cadence us half in We'll the we the egg several the compared of in expenditures $XX Farms questions. billion-dollar grow will your as

Operator

first our today Kaufman And caller Morgan Pamela is Stanley. Instructions]. [Operator with

Pamela Kaufman

about could but you margins. less discuss QX that's guidance X%, half EBITDA year-to-date. implies hoping The of of was the implied than I EBITDA the margins margin

this is of step into embedded to what's outlook, how your it conservatism curious much as promotion of plans and mentioned? investment just So versus a reflection up you

Thilo Wrede

question. so also great [ We're quarter. fourth promised plays deliver spend into folded at we've that. we've a Look, that volatile environment looking where the year quarter promotional holidays. at to what to it's what that is can sure We're marketing is in in commodity the going looking Pam, ] a certainly we at the environment -- fourth done looking into territory. make we all deliver, We're

others. into So different play all these EBITDA our say of together really of those factor I the that's assumption. takes pieces wouldn't margin puts one And play at that there's It's bigger than and are mix the there.

Pamela Kaufman

can you eggs ] you off more What volumes impacted about that bit forward? QX? context and the going explain then of the dynamics we the was that just think a volume how priced And [ should mentioned

Thilo Wrede

off-sized a times. we find at was impacted more bit eggs have and do. flock different had usually eggs the depending and there of are what that what -- third than -- we cycle depending places have in, we of we on but different the eggs than where came volume, in in it our sizes, quarter, we majority we we the are a takes more few the the just are so rotation, have, year, or times large not The to then times the of Yes, the on to if we to there we have in that came retail quarter so them.And we flocks in together have sell times at when weather flock third season puts sell had are we other need eggs off-sized are eggs eggs that of the when year

wholesale see just to a something went don't retail That's the in data you get channel. where channel do track that that we don't those channel. we egg it's per the the and revenue in So same

So repeat like a high mid-single like so that have around mid-to on other volume about and digit, growth, for -- worth volume digit was single digit single was puts our takes high the the fourth growth somewhere something quarter-over-quarter.We and some basis, -- year-over-year grown. the off-sized see they haven't Quarter-to-date phenomenon expect off-sized not that that that that these in we to are egg quarter. have This there. we -- it's third eggs we in quarter, actually

these puts don't quarter, expect fourth them we had And to the the and that with third repeat in so takes we in quarter.

Operator

comes question with Adam next Goldman Samuelson our from Sachs. And

Adam Samuelson

near maybe I part big So kind and number is know of of keying term just retailers. the sort in that question each of last distribution volumes year, around quarter, as of expanding of SKUs up how new also into growth, expansion the the next on thinking in your about the but move volume you units, in of tracks longer we have terms a that

look the X and to that growth X driver being sight how today line to kind new you going year, new versus growth of retailers and that into velocity months, self-reset to? about half think shelf can distribution, you come over TDP new first as got the into of you've As frame TDP space of of both effect, we think volume Russell, pipeline the would help next about the of see us start next that you

Russell Diez-Canseco

Adam, from you. to good hear

new on of know, as every additional even you there had. doors to to top Occasionally, There the be are items think doors in of about potential had. be innovation are existing drivers year, that. to As add we there's growth,

them ours. business and same And the and great customer we're on to to opportunity. year. and be retailers their do I think building with the continue our think help I toward mix year, to Kathryn time really you to pretty they commercial Pete But a plans, by work entire for every team can at customer their it's count build as us guide build perspective, bottoms-up opportunity partner for by premature from us a next and to to them

Adam Samuelson

the then first I quarter potentially some margins, mean just there's for on look quarter. but I embedded that the in input as as within commodity costs conservatism fourth the into go starts think margins fourth to you And into helpful. tailwind a appreciate gross quarter, bigger we there, and become would That's that at I

just So step-up -- but actually that is quarter fourth EBITDA also the seems seem there in commodity versus -- the that's the doesn't side quarter between like in the fourth maybe marketing fully margin, embedded it in there. in cost embedded be to clarify

would quantification be any Just helpful.

Russell Diez-Canseco

that, costs, track say of great a Adam, play over answers, commodity us closely markets I Look, because understand will I more record out you've before will anytime always got how think mentioned you listening Thilo helping time. I'm those

And so is to although everyone with Thilo, maybe speak got things. I happens on more else bit I a we're than certainly what watching can have, as probably various think see inputs you've ball that you better crystal about the a do. that we

Thilo Wrede

on we isn't any commodity was there that Middle we nobody added foresight environment. Adam, East. that that the else are a another that tell conflict a It the Yes. particular how with more operate costs, in markets reflection impact global can just We volatile has. have to

with want, business. that, marketing simply investments so we of in the cautious the in line, outlook the come to below the in margin on you there. it's the impact, majority spend the if its and gross just And profit The going remain fourth quarter,

Operator

Smith with our from And next is Matt Stifel. question

Matthew Smith

[ the household seeing consumers health various you're household household more that Are are income higher still income both everyday ape holding the you Bridget Ben them I of you avian in consumer in this wanted still environment? media. a to targeting in difference the referred seeing you've well in of Are about environment? or from group, to household behavior the versus higher a a believe this incremental households groups with you're groups more up ] past. and that ask type with targeting your the I the

Russell Diez-Canseco

and health, believe interesting. certainly, the demographic At we I of of question. pointed I finding think but for levels gain of as we're we've our interestingly, behaviors that address terms buy groups, value think people and bigger out, think target indicator that's at groups of products buying It's in are some our we a example, market see both seen Those offering time, but groups is it targeted, even actually in insights, or typically expanded self-selection eggs, pack not.I we're great different really as do heaviest we time that you than who in of channel many correctly is psychographic specifically rates targeted market across as necessarily that about also positive a the a arguably least starting them, is people seeing, product.So as have our same the we've is that We more are that the we breadth of is not the specifically our for that over products sizes. for them what to half a terms consumption I which whether larger the think, the are we for our products. different our uptick similar both more strong using households. of buy of buy

in So items, or we growth or our seen XX our sized value also core count eggs, dozen across have but size remarkable we for XX cartons count channels. pack example, of have our

that other that to And the a of been They that's vote growth appreciate that strong way.On mass market we're them not value, our with for we've they'll are income some channel in compromise are but new great indicator products of in Thilo hand, quality some may we chance on more mentioned values. the that better brought some earlier. and their potentially off-sized to serve seeing for highest still eggs product, an of really the so those the households even for looking us

who We compelling not well. somewhere items for not that opportunity us traditional great find to to had our SKU or else medium may that's unique the performing them. And organic have for have at may that that's store way bring Walmart, value shoppers more a to value remarkably are a at for the us find example,

right the find the answer appreciate country. households to we So for chance many this in

Matthew Smith

overall, and a in and you offset cost the the comment the prepared ask cost pricing follow-up I I there part of costs environment packaging if forward. about a in are to, structure same early the believe, on input remarks could quarter. had remain costs question higher at costs a going the time, But expected just was And input that

So need you that have additional expect structure? in today? Do you relative pricing view your place today actions your pricing about about of the Or on comment higher cost could you based talk persisting structure to price cost you would longer?

Russell Diez-Canseco

a That's ball bit, It that question. a Yes. great little think. I to goes back crystal

You inflation we may recall efficiencies. scale since beginning to at fund we of hadn't prior saw a our the that that And own of to sort that price and in able the taken 'XX, range we about starting economies were XXXX. -- typically, across through the

it whether So think can even our includes typical able we more line as households we seen new operational of is things to we it's what lot period, they input year over cetera. frequently, or or in our cost when it's to We help with in and households I we Nothing than us inflation, very offset costs, have -- corn it that repurchase or we and whole input we to the egg find important it's they've a improvements.Our were substantially are costs, to at everything is down substantially that overall preference build commodity own et us.When to do those more market. higher price not and thing to might not make as ago. one store, a to very than soy, vary were easy to inflation location main which add time try about changing us habit, continue package with many from pre-inflation we to is think go to I that see come pre-pandemic find easy that at once, But price including the that a XXXX input time. a back to design

midterm. can example, these believe cover more of so in if we'll still It to more to small.So promotion expanding to downward, we've that they're room to see us for costs -- input see the while and seeing we fit. invest seen a anything taken are because flexibility, we potentially adjust inflation time, the spend short marketing broader across well currently we're margins actually we're decreases have cost us are to. in from And investments to substantial gives enough we positioned that we gives relatively if And seem price need to as accelerating input gross just we as period make

Operator

next Moskow our And Cowen. TD with from Robert question comes

Robert Moskow

release, and were question does higher. lower corn it are they But a soy say I costs a commodity guess the ago. a than year In for lot Thilo.

they corn So are 'XX, let's higher offsetting just of grain say, lower of there then at half first other that take the are And costs look costs? just know that going you would given knows the and to they if in do. first if soy secondly, comparisons, like, are stay the a where benefit did, half I are today, no one 'XX what as have But they're you continued well? just

Thilo Wrede

that for adjusting prices of lag, flow us we the part lag. first a the question, your pay to we farmers cost with that commodity through given the on that are So on

in organic just that swings, plus really commodity So [ feed, Those direct feed the trade our for costs, it's what have. a correlation the up ] see sills publicly. show then total have farmers not you to they which we doesn't

So we why have that the commodity component on costs necessarily and day-by-day the on there's Board on basis. a a commentary our track on cost commodity Chicago see what doesn't you

On let's we year, talk get about there. that the outlook for when next

guidance yet. 'XX provided haven't We

And year, we're plans them, we we'll building once have our so, as talk that. about for the

Robert Moskow

you with anyway, would costs Maybe but have understand if thought that like. I'll even too. the impact, but there I offline year this would you a lag that offline, I guess can lag still lag last lower commentary, but that I take lag was the year-over-year the take I have had

Thilo Wrede

the lag of So Rob, just inventory but have. then that the we to a cost clarify, also impact, there's there's

sheet, are If see with quarters. laid we we at you have that in than inventory our working And you look position through in difference time bigger were a that eggs. balance eggs an previous

And so very a with much that, this lag target. moving is just -- it's

Operator

from next question Robert Dickerson with Our Jefferies. comes

Robert Dickerson

some And doing the saw we decent first not guess X core say with part service, X, LTOs. question. food X on like speaking, one extend players. of activity kind I side as to you're and the but other I have easy would, think that of first broadly you brand service stake and food release LTO recognition, of questions. I heard LTO quarter necessarily which I in on just kind maybe kind food service, increase should Breakfast of in clearly, the Burrito, the therefore, just press I can guess, business is expectation forward, be, shipments

Peter Pappas

for to our ways much for very we thanks uniquely. stakeholder service, way And continue that is look to do the in to Yes, able partners. we add This food question. rather I one that -- value is are Pete. this to

the our our households we're of some bit that ways operators awareness, going competitive different us brand well And unique partnership types than brand have of continue farms lends itself consumers, of expands to we the do in our of retail in of a to different think we expands look the One engage these of opportunities some as our a and to little that, at and field way. set. relevance, puts that to engage is unique expands of that our a offer playing the can we as strength partners.So by benefits to our strength operators

Robert Dickerson

cash All a then balance kind of sheet, right. technical question, Super. And related. flow

right that, relative last is to time, nice on have year. they piece, very same the great, continues, you its the At balance and the how of going? more sale now, quite come you're the security -- very not cash Like end which that $XX is Where has sitting what cash for just And flow that available you sure kind I'm not cash, of in where what that? mechanics approximately positive are cash a read uptick finished down? And I even why sure of free investment have clearly, come So balance the bit. has like a sheet, cash. should is million down on

is allocate not of there been potential of cash because just to I'm forward? So balance a there's securities sure into a more cash a transfer kind maybe if need going

Thilo Wrede

It's of shifting holding right actually I are now working new money advantage think [indiscernible] is with perspective facility. in answered securities right from coming plans to we from really Actually, equivalents, money own now. just funds. into our Rob, And you are up Yes, i.e., in moving are we're yielding question. since that well cash market it a this we market spending your investment anticipation

build that talked processing We'll and reinvest that, for existing mature, investment once about letting we that cash of they to facility. are preparing before need as And and market. We we out operating another them we money securities we are have pay then cash mature egg in the just that out of balances.

Operator

Matt our comes Needham. McGinley And next question with from

Matthew McGinley

when increases of is year, think price double-digit cadence would a but So based on been X% reported overall to on last gross you pricing your that I low you took overall pricing benefit around higher impact promotion. the have sales, the benefit planned for

the is fourth the typically in gross I about little a promotional. impact think bit the fourth quarter same, the is but quarter more

quarter? this to promotional we what So view on can the on in sales color you relative the fourth and we that saw some give quarter how should impact

Thilo Wrede

that wholesale benefit The follow normal I pricing was with the sales you spending it. our a plus your as started just thought If than reason quarter on correctly, why promotions high I we to wasn't in in P&L volume lower break. math revenue saw as channel. the third again That's the you higher that this agree

the yes, promotional degree that's benefit participate create so year.Fourth it's a there And have to pricing we promotions want are a -- the we consumers quarter, environment. to that reduction from brand. new of the that in We overall our for

share, the price participating in commodity renting with intention acquisition by It's consumer down you of all market producers. about and if moves not participating than up We are rather want.

strong a game we participate That's not a have in. We to that decided brand.

Matthew McGinley

much of you shipping much mean, in a by impressive gain you benefit there said, gains. that had in decline But that the and on driven And the as volume noted distribution, rate, I it. of rates. really Got linehaul a you was

got was So operating I some volume there you leverage assume that. efficiency or that there from that

you do do So next I that or of nearing you're benefit? was? the to volume benefit operating you guess, there's can come few efficiency costs transport think of cheaper more you talk from linehaul or think what that quarters And end the about over kind leverage

Thilo Wrede

better forward. linehaul as what not to of we I'm how speculate better are going rates had balance this haul was capacity I for going to move a on it But going have said, quarter, rates Yes. and utilization.

more outbound general, As we That cost that rate per we're on as to year-over-year. that third shipping And plays The continues able -- reduction the the pallets linehaul to trucks. that into quarter grow, well. decline put the reduces business cost the obviously in in pallet. saw about was XX%

Operator

comes Markets. Meyers Capital with from And Lake our Ryan question Street final

Ryan Meyers

has of new How one guys how product launching risk you viewing new the are SKUs downs how for or impacted trade categories? think me. First about you potential

Russell Diez-Canseco

question. add seeing and context. recent it's fastest in our expansions terms more of got product Pete We've the growth SKUs. in think of he might I great appreciate so are here, priced But our we're it's some percentage where a it. year-on-year most interesting, and I some some detailed highest

that because a egg, expanding distribution seeing distribution XX so those we're count, blue is point expanding proposition seeing I is affecting SKUs.And of you We're the strong don't which our and shift actually what it? of as in gains a get be we're point.Pete, In for high a I So our price mix consumers anything innovation a velocity risk higher did to price count at value specialty items. that relatively egg. we're toward even egg higher a value add do introduce to down trade see continues have to or ability context,

Peter Pappas

it. got You

Russell Diez-Canseco

Okay.

like Sounds it. I got

Ryan Meyers

marketing And XXXX, spend basis? as progress then on And in we from full about a think year perspective seasonality helpful. of we that's should then No, how kind it. the throughout both year? Got a

Thilo Wrede

we go a about the right moves the plan about thinking adjust over unfold, with business includes done We're provide dollars, those guidance grows. the plans we're I as that as Obviously, year throughout events it we'll into for we that marketing going once that not with but spending year. we go the grows adjust -- XXXX. talk the and year spend then and to it Yes. we how quarter-by-quarter, would and now in our assume

Operator

conclude to would Matt question-and-answer I the does for Siler back session. closing remarks. that And now like to turn it

Matthew Siler

Have good Thanks, everybody, one. today. interest your a for

Operator

program. This does conclude the

You may now disconnect.

Vital Farms (VITL) 2 Nov 232023 Q3 Earnings call transcript