Village Farms' Fresh Segment Faces Pressure: Can Pricing Offset Costs?

Village Farms International’s VFF Fresh segment continued to face cost-related pressure in the third quarter of 2025, as management indicated that higher operating expenses remained a factor affecting results. On the earnings call, management stated that labor and other operating costs continued to impact the Fresh business during the quarter.

Sales from continuing operations in the Fresh segment were essentially flat year over year at $12.8 million. This performance reflected the current business setup following the commission arrangement with Vanguard Food, L.P. While revenues were stable, cost pressures continued to limit margin improvement.

On the earnings call, management highlighted that inflation across labor and other operating costs remained a key challenge. While pricing actions were implemented where applicable, management did not state that pricing actions fully offset higher operating costs during the quarter. 

Despite these pressures, the Fresh segment reported improved profitability in the quarter. Net income from continuing operations increased to $1.3 million compared with $0.3 million in the prior-year period. Adjusted EBITDA from continuing operations rose to $2.5 million from $1.7 million a year ago.

Village Farms remains focused on managing operating costs while maintaining pricing discipline in an environment where higher labor and operating expenses remain a key consideration.

What the Latest Metrics Say About Village Farms

Village Farms, which competes with The Scotts Miracle-Gro Company SMG and Mission Produce, Inc. AVO, has seen its shares soar 345.8% in the past year, outperforming the industry’s decline of 11.5%, the Zacks Consumer Staples sector’s growth of 3.4% as well as the S&P 500’s 17.3% appreciation. Meanwhile, shares of Scotts Miracle-Gro have lost 10.5%, while Mission Produce rose 0.2% in the aforementioned period.

From a valuation standpoint, Village Farms’ forward 12-month price-to-sales ratio stands at 1.57, lower than the industry’s 2.13. VFF carries a Value Score of C. Village Farms is trading at a premium to Scotts Miracle-Gro (with a forward 12-month P/S ratio of 1.07) as well as Mission Produce (0.7). 

The Zacks Consensus Estimate for Village Farms’ current and next financial-year bottom line implies year-over-year growth of 165.6% and 14.3%, respectively.

Village Farms currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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