The children’s nutrition company’s Q3 business performed above expectations before the voluntary recall of its Tractor Wheels soft baked bars, which the company estimates roughly $30 million in recall-related costs that cut into its 2026 guidance, but management expects steady and strong 2027 growth for the rest of the portfolio as it prepares for new innovations and expanded distribution.
Once Upon a Farm reported third-quarter net sales of $89.1 million, up 34.9% year over year, driven primarily by 32% volume growth, according to according to the company’s quarterly earnings released Nov. 12. The company said Q3 results were in line with internal expectations and remain strong prior to the impact of its recently announced voluntary Tractor Wheels recall.
The company lowered its fiscal 2026 outlook to reflect anticipated recall-related costs of removing Tractor Wheels from shelves – a high velocity snack that accounted for roughly 18% of year-to-date net sales prior to the recall. The company now expects fiscal 2026 net sales of $290 million to $300 million, down from its earlier outlook of $327 million to $335 million, and an adjusted EBITDA loss of $4.5 million to $7 million compared to previous guidance for a loss of $3 million to $4.5 million.
The company ended the quarter with $106.4 million in cash, no debt and access to an additional $95 million under its current credit line. Executives said the company has enough liquidity to address recall-related costs and continue financing supply chain investments.
The rest of the portfolio remains healthy as the company prepares for long-term growth rooted around new innovation launches and expanded retail distribution beginning in Q1 2027, according to the company.
Recall expected to cost up to $30 million
The company issued a voluntary recall nationwide on Oct. 30 after three reports of a potential choking hazard.
Foraker and Waldman point to positive retailer and consumer sentiments around the company’s decision to prioritize safety through the voluntary recall. Retailers and consumers support returning Tractor Wheels to shelves as soon as possible, according to leadership. CEO John Foraker says independent safety assessments are underway and is expected to take between eight to 10 weeks. The company is assessing Tractor Wheels’ potential product design, formulation and packaging changes before confirming a relaunch strategy.
“We are preparing for multiple different contingencies around it based on what we learned in the research. So, we want to balance the speed of it with the excellence of it and make sure that it’s excellent and then we do that as fast as we can,” Foraker said.
The company expects Tractor Wheels to regain strong distribution momentum if launched back into market, though not at all once, added Foraker.
Retailers remain supportive
Prior to the recall, Tractor Wheels were on shelves across more than 20,000 retail doors. A majority of recall-related costs are due to inventory write offs and product being removed from retailer shelves, according to Foraker.
Despite the recall, the company’s retailer relationships are expected to continue. Retailer commitments for cooler placements, new product introductions and broader commercial plans outside of Tractor Wheels will remain intact for fiscal 2027, according to Foraker.
The company also said consumption trends across the rest of its portfolio have remained steady in the weeks following the recall.
Looking ahead to 2027
Management expects the broader business to perform well, pointing to growing household penetration, expanding retail distribution and new innovation launches, despite an unknown timeline around Tractor Wheels returning to shelves.
For fiscal 2027, Once Upon a Farm expects at least $330 million in net sales and at least break-even adjusted EBITDA. The rest of the portfolio, excluding Tractor Wheels, is expected to grow faster than the company’s long-term target of 20%.
