Once Upon a Farm cuts 2026 sales outlook to $290–300 million after product recall
Key Facts
On November 12, Once Upon a Farm lowered its fiscal 2026 outlook, forecasting net sales of $290–300 million, compared with prior guidance of $327–335 million, according to its third-quarter earnings filing with the U.S. Securities and Exchange Commission. The revision followed the recall of its organic Tractor Wheels children’s bars, a product that accounted for about 18% of the company’s net sales in the nine months ended September 30. The company also shifted from expecting Adjusted EBITDA profit to forecasting a loss on that adjusted measure. The company said it had temporarily suspended shipments of the product while preparing production plans for its return to shelves after completing its assessment and implementing and validating any necessary safety changes. The filing did not specify a return date, and the company said it could not reasonably estimate the recall’s financial impact.
The company set its 2026 Adjusted EBITDA range, a non-GAAP measure, at a loss of $4.5–7 million, compared with prior guidance for a profit of $3–4.5 million. The shift reflects lower operating expectations alongside the revised sales estimate, but it does not by itself establish the recall’s final cost. The company reported that Tractor Wheels inventory stood at about $7.9 million on October 31, before any adjustments for net realizable value or obsolescence. That figure describes the inventory’s value on that date; it is not a write-off announced by the company or a confirmed loss estimate. The company said it expects the recall to have a significant impact on its 2026 results and cash flows, and potentially on later periods, while the scale of the impact remains under assessment.
The outlook revision stood out despite quarterly sales growth: third-quarter net sales rose 34.9% year over year to $89.1 million. Meanwhile, the company posted a quarterly net loss of $3.8 million, down from a loss of $11.3 million in the year-earlier period. The company attributed the improvement in net loss mainly to the absence of a non-cash change in the fair value of a derivative liability. The results show that revenue growth and an improved quarterly net loss coincided with a cut to the full-year outlook, which was affected by product developments and their financial estimates. The company also noted in its filing that gross margin declined before the recall’s effects appeared in quarterly results.
The U.S. Food and Drug Administration said the recall covers all flavors, sizes and lots of the product, and asked consumers not to buy Tractor Wheels bars or give them to children. The agency said the recall followed three consumer complaints, with no injuries reported as of the recall announcement. On October 30, the agency had warned that the product could form a dry, sticky mass when chewed. The reports cited in the warning involved children aged 1.5–2.5 years who experienced complete airway obstruction and were unable to breathe. These details put the recall at the center of the change in the company’s outlook, while the cost of the action and its final impact remain undetermined.
The stock fell after the earnings release and outlook cut. In after-hours trading on November 12, it dropped 6.13% to $9.56, after closing the regular session at $10.18, up 0.99%, according to data reported by Investing.com, citing Reuters. In premarket trading on November 13, the stock fell 5.7% after the third-quarter results and new guidance were announced. The moves followed the company’s disclosure that Tractor Wheels accounted for a substantial share of sales in the nine months and that shipments had been temporarily suspended. The company said it was assessing the product and preparing production plans for its return to shelves, but gave no date or final estimate of the financial impact.