Once Upon A Farm NYSE: OFRM reported second-quarter fiscal 2026 net sales growth of 42.3% as distribution gains, product innovation and a national club program supported volume-led expansion across its baby and kid nutrition portfolios.
Net sales rose to $85.4 million from $60 million a year earlier. Chief Executive Officer and Co-founder John Foraker said consumption growth remained in the low- to mid-30% range during the quarter, while the difference from reported sales growth reflected favorable cooler slotting comparisons, distribution gains and initial shipments of new protein-focused products.
The company raised its full-year outlook, now projecting fiscal 2026 net sales of $327 million to $335 million, representing growth of approximately 36% to 39%. The prior forecast was $313 million to $323 million. Once Upon a Farm also lifted its adjusted EBITDA guidance to $3 million to $4.5 million from a previous range of $2 million to $4 million.
Consumer Metrics and Category Growth
Foraker said the company continued to gain share in baby and toddler snacks and in baby and toddler pouches, including against larger conventional competitors. Household penetration reached 6.2% at the end of June, compared with 5% a year earlier. Repeat purchases among households with children increased 351 basis points year over year to 52.1%.
“Our funnel is widening,” Foraker said, citing growth in household penetration, retention and spending per household. He said newer families were repeating at higher rates as the company works to build the brand from baby products through kid-focused offerings.
Baby business sales increased 73% year over year to $41.5 million, with pouches and snacks growing at similar rates. The company added more than 85,000 baby distribution points during the quarter at existing and new retailers.
Management highlighted the March launch of meat and legume protein pouches, which it said were 61% incremental to Once Upon a Farm and 63% incremental to the total baby category at certain retailers. Kid business sales rose 22% to $43.9 million, with snack growth slightly outpacing the segment overall as protein-focused bar products and protein-and-probiotic pouches entered kid dairy sets.
- More than 15,000 distribution points were added in the kid portfolio during the quarter.
- Packaging updates to dairy-free kid smoothies produced average velocity increases of 10% to 15% on the same distribution, according to management.
- The company plans to introduce a new functional kid-pouch sub-line with selected customers in the coming weeks.
Club Programs and Cooler Expansion
Once Upon a Farm said a national club program in May exceeded its expectations for velocity and volume, helping expose its products to millions of additional households. Household penetration in its immunity blend portfolio rose more than 20% compared with April, Foraker said.
The company plans to run another, smaller national program with the same club customer in the third quarter, featuring its Tractor Wheels toddler snacks. Management said the programs are intended to support trial, awareness and repeat purchases, including across multiple product categories and retail channels.
Baby cooler productivity also increased as the company broadened assortments. At one larger retailer, cooler velocity increased more than 30% sequentially in the quarter, aided by new protein pouches and oat bar minis. Once Upon a Farm continues to target roughly 5,000 coolers by the end of 2026, 8,000 in 2027 and at least 15,000 over time.
Foraker said the company expects a significant number of new cooler installations in the third quarter. He added that some established retail partners have begun adding second or larger coolers in certain stores as productivity improves and assortment needs expand.
Margins, Spending and Outlook
Gross margin was 35.9% in the second quarter, down 485 basis points from a year earlier. President and Chief Financial Officer Larry Waldman attributed the decline to trade spending, including the national club program; a greater sales mix of snacks, which carry lower margins than pouches; and fuel and tariff costs. Pricing and lower cooler slotting costs partly offset those factors.
SG&A expense increased $11.9 million to $36.3 million, or 42.5% of net sales. The company cited increased advertising and planned headcount additions, while noting that logistics expenses declined as a percentage of sales. About $3.5 million of SG&A was associated with stock-based compensation and performance payments related to the company’s initial public offering.
Net loss improved to $5 million from $9 million a year earlier. Adjusted EBITDA was a loss of $1.7 million, compared with adjusted EBITDA of $2 million in the prior-year period. Waldman said approximately $3 million in marketing spending shifted from the second quarter to the third quarter to align with back-to-school promotions and merchandising activity.
The company now expects full-year gross margin of around 40%, about 100 basis points below its prior outlook. Third-quarter gross margin is expected to be similar to the second-quarter level, while the company expects improvement in the fourth quarter as the club program concludes and a September price increase begins contributing.
Management said it implemented a targeted low-single-digit price increase on selected, primarily snack-related products, effective in late September, to address specific inflationary pressures. Foraker said retailers broadly accepted the action and the company expects only a nominal impact on unit demand based on historical price elasticity and current consumption trends.
Supply Chain Investment Plans
Once Upon a Farm ended the quarter with approximately $93.5 million in cash and no debt. Inventory rose 47.6% from a year earlier to $51.9 million as the company prepared for back-to-school demand and an additional national club program. Management expects inventory to remain elevated through the third quarter before moderating in the fourth quarter.
The company is pursuing supply chain automation and productivity projects with co-manufacturing partners, focused on improving capacity, service levels and labor-related costs. Waldman said the company expects capital investment of roughly $25 million to $35 million for the initiatives, while some manufacturing partners will also invest in equipment.
Management expects initial benefits from the projects in 2027 and a more substantial contribution beginning in 2028. It said its expectation for profitability improvement in 2027 does not depend on realizing the full benefit of the larger automation projects.
About Once Upon A Farm (NYSE:OFRM)
Once Upon A Farm NYSE: OFRM is a U.S.-based producer of refrigerated organic foods for infants, toddlers and young children. The company’s product lineup emphasizes cold-pressed, organic purees, blends and smoothies formulated for early childhood nutrition. Its offerings are positioned around whole-food ingredients, limited processing and claims of no artificial preservatives or added sugars, with packaging designed for convenience and on-the-go feeding.
Once Upon A Farm distributes its products through a combination of retail and direct-to-consumer channels, serving customers primarily across the United States.
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