It all goes back to the long-term approach you’ve heard Russell discuss over the past few years. We want to provide the best outcomes for all our stakeholders, which will directly benefit our company over time. Our success in building and maintaining strong relationships with our retail partners has been a cornerstone of our growth. We recognize that retailers are a crucial stakeholder, both in our journey and in our mission. Therefore, we continue to invest in these relationships through collaboration, a customer-first mindset and tailored support. We’ve been able to understand and address the unique challenges faced by retailers, provide exceptional service and go above and beyond expectations. Our navigation of the recent volatility across the industry, which Russell touched on earlier, is a great example of what makes us different from others in the category.
Retailers know we have built a resilient supply chain and that we’re able to garner a premium price for our products based on the brand we have built. We’re also consistently priced and our strategy is not one that fluctuates with changes in industry supply. As a result of this operating model, and the trust we have built with consumers, we believe retailers can count on Vital Farms to provide industry-leading margins. Thank you for your continued confidence in Vital Farms and for your time today. With that, I’ll pass it over to Thilo.
Thilo Wrede: Thank you, Pete. Hello, everyone and thank you for joining us today. I will review our financial results for the third quarter ended September 24, 2023. I will then provide more details about our updated guidance for fiscal year 2023. As Russell mentioned earlier, we had another strong quarter with net revenue of $110.4 million, an increase of 20% compared to the prior year period. This was driven by shipment volume growth of 13% and price mix of about 7%. The shipment volume growth was primarily driven by increases with both new and existing retail partners. Let me briefly provide some context for the 13% shipment volume growth as there are a few puts and takes within this number compared to what you see in track channel data.
One, we saw another strong performance from our food service business, which grew over 100% in the quarter, adding some volume that will not show up within track channel data. Additionally, we had a greater number of offsized eggs than usual which we ended up selling wholesale. This is also another data point one would find within the track channel data and it contributed about 700 basis points to our shipment volume growth. Excluding these 2 factors, our shipment volume grew in the mid-single digit range during Q3, which was in line with our expectations. Gross profit for the third quarter of 2023 was $36.7 million, or 33.2% of net revenue compared to $29.5 million or 32% of net revenue for the third quarter of 2022. Gross profit dollars benefited primarily from higher sales and 100 basis point gross margin expansion was a result of increased pricing across our portfolio more than offsetting higher input costs and higher packaging costs.
SG&A expenses for the third quarter of 2023 were $25.1 million, or 22.7% of net revenue compared to $20.6 million or 22.3% of net revenue in the third quarter last year. The increase in SG&A was driven by higher marketing expenses. As we outlined at our recent Analyst Day, we are continuing to focus strategic marketing spend on growing our brand awareness and household penetration and service of our goal of adding 20 million new households by year end 2027. We also experienced some increased employee-related costs as we grew headcount to support our continued growth. Excluding marketing expenses, our SG&A declined year-over-year as a percentage of net revenue. Shipping and distribution expenses in the third quarter were $6.4 million, or 5.8% of net revenue relative to $6.9 million or 7.5% of net revenue in the third quarter of 2022.
The decrease in shipping and distribution expenses was driven by a decline in linehaul rates and better truckload utilization as we continue to grow our shipment volume. Adjusted EBITDA for the third quarter of 2023 was $9.3 million, or 8.4% of net revenue compared to $5.2 million, or 5.7% of net revenue for the third quarter of 2022. And lastly, an update on our capital structure. Until September 24, 2023, we had total cash, cash equivalents and marketable securities of $96.1 million. We had no debt outstanding and year-to-date in 2023, we have generated $18 million of free cash flow. Before concluding the call, I want to update you on our higher Fiscal Year 2023 adjusted EBITDA guidance. We still expect net revenue of more than $465 million which includes our expectation as the highest single net revenue period in our company history in the fourth quarter.
We now expect the adjusted EBITDA of more than $40 million up from our prior expectation of more than $35 million. We continue to expect the gross margin and the second half of the year will be below but we have felt it in the first half of the year, merely due to the previously discussed return of a more normal promotional cadence in the back half of 2023. In SG&A, we continue to anticipate higher marketing spending in the second half of the year compared to the first half. And lastly, we now expect Fiscal Year 2023 capital expenditures in the range of $11 million to $16 million. Before we open the line for questions, I would like to reiterate a few points. One, we have successfully navigated several anticipated challenging dynamics across the egg category.
We’ll continue to grow our volume well ahead of the category. Two, we are well positioned as consumer brand that is a part of a healthy diet and in turn, a healthy lifestyle. Three, we take pride in the trajectory of our business and are confident in our ability to grow to a billion-dollar brand. Thank you for your time and interest in Vital Farms today and for the confidence that you’ve placed in us with your investment. With that, we will now be happy to take your questions.
Operator: [Operator Instructions] And our first caller today is Pamela Kaufman with Morgan Stanley.
