Freshpet(FRPT)

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Freshpet(FRPT) - 2025 Q1 - Quarterly Report
2025-05-05 20:05
Financial Performance - Net sales for the three months ended March 31, 2025, increased to $263,249,000, up from $223,849,000 in the same period of 2024, representing an increase of approximately 17.7%[14] - Gross profit for the same period was $103,788,000, compared to $88,158,000 in 2024, reflecting a gross margin improvement[14] - The company reported a net loss attributable to common stockholders of $12,697,000 for Q1 2025, compared to a net income of $18,602,000 in Q1 2024[14] - For the three months ended March 31, 2025, net sales reached $263,249,000, an increase of 17.7% compared to $223,849,000 for the same period in 2024[55] - Consolidated net loss for the quarter was $12,697 million, a significant decline from a net income of $18,602 million in the prior year[107] Expenses - The company incurred selling, general, and administrative expenses of $115,285,000 in Q1 2025, compared to $79,695,000 in Q1 2024, indicating a significant increase of approximately 44.7%[14] - The company reported a depreciation and amortization expense of $21,827,000 for Q1 2025, compared to $15,902,000 in Q1 2024, an increase of approximately 37.2%[19] - Input costs increased to $77,087 million from $69,824 million, reflecting a rise of 10.2% year-over-year[107] - Media costs rose to $39,791 million, up 24.0% from $32,090 million in the previous year[107] - Interest expense for the quarter was $3,459 million, up from $3,060 million, indicating a 13.1% increase[107] Assets and Liabilities - Total current assets decreased to $405,392,000 as of March 31, 2025, from $436,998,000 at the end of 2024, a decline of approximately 7.2%[11] - Total liabilities decreased slightly to $509,535,000 as of March 31, 2025, from $519,518,000 at the end of 2024[11] - Cash and cash equivalents at the end of Q1 2025 were $243,732,000, down from $268,633,000 at the end of 2024, a decrease of about 9.3%[19] - As of March 31, 2025, net inventories increased to $82,017 thousand from $80,794 thousand as of December 31, 2024, reflecting a growth of 1.5%[58] - Property, plant, and equipment, net, rose to $1,082,203 thousand as of March 31, 2025, compared to $1,065,869 thousand as of December 31, 2024, indicating an increase of 1.5%[60] Investments and Financing - The company issued $402.5 million of 3.00% Convertible Senior Notes in March 2023, which are accounted for as a single liability measured at amortized cost[33][34] - The carrying value of the convertible notes as of March 31, 2025, is $395,698 thousand, with a fair value of $589,019 thousand[70] - The effective interest rate for the convertible notes is 3.59%, with total interest expense for the three months ended March 31, 2025, amounting to $3,554 thousand[69][71] - The company entered into capped call transactions using $66,211 thousand of the net proceeds from the convertible notes to mitigate potential dilution[72] Market and Product Development - Freshpet continues to focus on expanding its market presence in the U.S., Canada, and other international markets, targeting major retail classes including Grocery and Pet Specialty[21] - The company is actively investing in new product development and technology to enhance its offerings in the natural fresh meals and treats segment for pets[21] - Sales from the grocery, mass, international, and digital channels amounted to $215,156,000, up from $184,429,000, reflecting a growth of 16.6%[55] - The pet specialty and club retailers generated sales of $48,093,000, which is a 22% increase from $39,420,000 in the prior year[55] Legal and Regulatory Matters - The company is involved in legal claims, including a breach of contract claim with Phillips Feed Service, with potential damages exceeding $8,300 thousand[97] Other Financial Information - The company maintains a full valuation allowance against its deferred tax assets as of December 31, 2024, due to the likelihood of non-realization[42][43] - The company has one operating and reportable segment, with financial information reviewed on a consolidated basis for resource allocation and performance evaluation[25] - The company did not identify any recognized or unrecognized subsequent events that require adjustment or disclosure in the financial statements[110] - The percentage of consolidated revenue recognized in Europe for the quarter was less than 1%[182] - The company is exposed to fluctuations in foreign exchange rates, particularly in the British pound sterling, Euro, and Canadian Dollar[182] - The company has not entered into any forward exchange contracts as of March 31, 2025[183]
Freshpet(FRPT) - 2025 Q1 - Earnings Call Transcript
2025-05-05 13:02
Financial Data and Key Metrics Changes - First quarter net sales were $263.2 million, up approximately 18% year over year, primarily driven by volume growth [20][26] - Adjusted gross margin in the first quarter was 45.7%, compared to 45.3% in the prior year period [20][28] - Adjusted EBITDA in the first quarter was $35.5 million, up approximately $5 million or 16% year over year [20][30] - Operating cash flow was $4.8 million in the first quarter, with cash on hand of $243.7 million at the end of the quarter [30] Business Line Data and Key Metrics Changes - Volume contributed 14.9% growth, with a positive price mix of 2.7% primarily driven by mix [27] - The company signed a new distribution agreement with Pet Food Experts, which is expected to improve route to market [20] - The company has a 96% market share within the gently cooked fresh frozen branded dog food segment [22] Market Data and Key Metrics Changes - Freshpet competes in the $54 billion U.S. pet food category, holding only a 3.5% market share within the $37 billion U.S. dog food and treats segment [21] - Household penetration as of March 30 was 14.1 million households, up 13% year over year [23] - Total buy rate was $110, up 6% year over year [23] Company Strategy and Development Direction - The company plans to adapt its strategies to the current economic backdrop, focusing on advertising, retail availability, and product innovation [9][10] - Freshpet is launching a new entry price point bag product under the Freshpet Complete Nutrition label to attract more consumers [9] - The company aims to be free cash flow positive in 2026 and is balancing capacity investments with anticipated demand [11][18] Management's Comments on Operating Environment and Future Outlook - Management noted a significant shift in the macro environment impacting growth, but Freshpet continues to outperform the category [6][8] - The company does not expect short-term changes in consumer behavior to affect long-term demand for pets or premium pet food [8][16] - Management remains optimistic about long-term growth potential despite current economic uncertainties [35] Other Important Information - The company is expanding its small DTC business nationally and making progress in getting Freshpet into more value-oriented stores [10] - Capital expenditures are projected to be approximately $225 million this year, down from previous estimates [34] Q&A Session Summary Question: Concerns about updated guidance range amid economic uncertainty - Management considered various scenarios and believes the current consumer environment will continue for the balance of the year [39][40] Question: Insights on price mix and expectations for the rest of the year - Most of the favorable price mix was driven by product mix, with no intention to change list prices [41][42] Question: Incremental changes in value products and marketing strategies - The company is accelerating plans to improve affordability and change marketing strategies to enhance speed of business [45][46] Question: Inventory health and risk of destocking - Inventory across most channels is in good shape, with no significant destocking expected [85][88] Question: Contingency plans if growth slows - The company has flexibility to adjust capital expenditures and staffing of production lines based on growth trends [100][102]
Freshpet (FRPT) Q1 Earnings Lag Estimates
ZACKS· 2025-05-05 12:55
Core Viewpoint - Freshpet reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.13 per share, and showing a decline from $0.21 per share a year ago, indicating a significant earnings surprise of -30.77% [1] Financial Performance - Freshpet's revenues for the quarter ended March 2025 were $263.25 million, surpassing the Zacks Consensus Estimate by 1.66% and up from $223.85 million year-over-year [2] - Over the last four quarters, the company has exceeded consensus revenue estimates three times [2] Stock Performance - Freshpet shares have declined approximately 48.4% since the beginning of the year, contrasting with the S&P 500's decline of -3.3% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $280.42 million, and for the current fiscal year, it is $1.30 on revenues of $1.16 billion [7] - The trend of estimate revisions for Freshpet has been unfavorable leading up to the earnings release [6] Industry Context - The Food - Miscellaneous industry, to which Freshpet belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable industry outlook [8]
Freshpet(FRPT) - 2025 Q1 - Earnings Call Transcript
2025-05-05 12:00
Financial Data and Key Metrics Changes - First quarter net sales were $263.2 million, up approximately 18% year over year, primarily driven by volume growth [19][25] - Adjusted gross margin in the first quarter was 45.7%, compared to 45.3% in the prior year period [19][26] - Adjusted EBITDA in the first quarter was $35.5 million, up approximately $5 million or 16% year over year [19][28] - Capital expenditures for the first quarter were $26.5 million, with cash on hand of $243.7 million at the end of the quarter [28] Business Line Data and Key Metrics Changes - The company signed a new distribution agreement with Pet Food Experts, which is expected to improve growth moving forward [19] - The total e-commerce business was up 43% in the quarter, indicating strong performance in online sales [12] - The company has a 96% market share within the gently cooked fresh frozen branded dog food segment [21] Market Data and Key Metrics Changes - Freshpet competes in the $54 billion U.S. pet food category, holding a 3.5% market share within the $37 billion U.S. dog food and treats segment [20] - Household penetration as of March 30 was 14.1 million households, up 13% year over year [22] - The average buy rate was $110, up 6% year over year [22] Company Strategy and Development Direction - The company plans to adapt its strategies to target higher-income consumers through increased advertising investment and tailored media strategies [9] - Freshpet will launch a new entry price point bag product under the Freshpet Complete Nutrition label to attract cost-conscious consumers [10] - The company aims to balance capacity and organizational capability investments with anticipated demand to meet long-term margin and cash generation targets [11] Management's Comments on Operating Environment and Future Outlook - Management noted a significant shift in the macro environment impacting growth, but Freshpet continues to outperform the category across all demographics [5] - The company expects net sales for 2025 to be between $1.12 billion and $1.15 billion, representing approximately 15% to 18% growth year over year [13][29] - Management remains optimistic about long-term growth potential despite current economic uncertainties, believing there will be pent-up demand for pets when conditions improve [15][34] Other Important Information - The company is monitoring tariffs closely, with only 5% of U.S. COGS coming from imported raw materials, minimizing the impact on the P&L [32] - Capital expenditures are projected to be approximately $225 million for the year, down from previous estimates [33] Q&A Session Summary Question: Updated guidance range in light of economic conditions - Management considered various scenarios and believes the current consumer environment will continue for the balance of the year, but is prepared to take actions if conditions worsen [36][39] Question: Incremental changes in value products and marketing strategies - The company is accelerating plans to improve affordability and mainstream the brand, focusing on media targeting and creative adjustments [45][46] Question: Market progression and growth challenges - Freshpet is outperforming the category across income groups, but consumer uncertainty is causing hesitance in trading up to premium pet food [56][58] Question: Inventory health and destocking risks - Inventory across most channels is in good shape, with no significant destocking issues expected [84][86] Question: Contingency plans if growth slows - The company has flexibility to adjust capital expenditures and staffing of production lines based on growth performance [94][96]
Freshpet(FRPT) - 2025 Q1 - Earnings Call Presentation
2025-05-05 11:05
Q1 2025 Earnings May 5, 2025 Q1 2025 Earnings Presentation 1 Forward Looking Statements & Non-GAAP Measures FORWARD-LOOKING STATEMENTS Certain statements in this presentation by Freshpet, Inc. (the "Company") constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations and assumptions. These include statements related to the expected impact to our growth plans of current macroeconomic dynamics and our plans to de ...
Freshpet(FRPT) - 2025 Q1 - Quarterly Results
2025-05-05 10:30
Financial Performance - Net sales increased by 17.6% to $263.2 million for Q1 2025, compared to $223.8 million in the prior year period[3] - Net loss for Q1 2025 was $12.7 million, a decrease from net income of $18.6 million in the prior year period[5] - Adjusted Gross Profit was $120.2 million, or 45.7% of net sales, compared to $101.5 million, or 45.3% of net sales, in the prior year[4] - Gross profit rose to $103,788 thousand, representing a 17.7% increase compared to $88,158 thousand in the prior year[26] - The company reported a net loss attributable to common stockholders of $12,697 thousand for Q1 2025, compared to a net income of $18,602 thousand in Q1 2024[26] - Adjusted gross profit for Q1 2025 was $120,245 thousand, with an adjusted gross profit margin of 45.7%, slightly up from 45.3% in Q1 2024[30] - Adjusted EBITDA for Q1 2025 was $35.5 million, up from $30.6 million in the prior year[7] - Adjusted EBITDA for Q1 2025 was $35,534 thousand, which is 13.5% of net sales, compared to $30,579 thousand or 13.7% of net sales in Q1 2024[33] Expenses and Costs - SG&A expenses rose to $115.3 million, representing 43.8% of net sales, an increase of 820 basis points from 35.6% in the prior year[4] - Selling, general, and administrative (SG&A) expenses increased to $115,285 thousand, up 44.7% from $79,695 thousand in the same quarter last year[31] - The company incurred $10,680 thousand in distributor transition costs due to a change in distribution strategy[32] - The provision for loss on accounts receivable was $11,452 thousand, significantly higher than $4 thousand in the same period last year[29] - The company reported a depreciation and amortization expense of $21,827 thousand, up from $15,902 thousand in Q1 2024[29] Guidance and Future Plans - The company updated its 2025 guidance, expecting net sales between $1.12 billion and $1.15 billion, a growth of 15% to 18% from 2024[13] - Adjusted EBITDA guidance for 2025 is now projected to be between $190 million and $210 million, down from at least $210 million previously[13] - The company plans capital expenditures of approximately $225 million, reduced from previous guidance of $250 million[13] - Freshpet aims to adapt its growth plans to current economic challenges while focusing on operational improvements for long-term success[2] Cash and Debt Position - Cash and cash equivalents as of March 31, 2025, were $243.7 million, with total debt outstanding of $395.7 million[7] - Cash and cash equivalents at the end of the period were $243,732 thousand, down from $257,894 thousand at the end of Q1 2024[29]
Freshpet, Inc. Reports First Quarter 2025 Financial Results
Globenewswire· 2025-05-05 10:30
Core Insights - Freshpet, Inc. reported a net sales growth of approximately 17.6% for Q1 2025, reaching $263.2 million compared to $223.8 million in the prior year [4][9] - The company experienced a net loss of $12.7 million in Q1 2025, a significant decline from a net income of $18.6 million in the same period last year [8][9] - Freshpet has adjusted its 2025 outlook due to macroeconomic challenges, projecting net sales between $1.12 billion and $1.15 billion, a decrease from previous guidance [12][16] Financial Performance - Net sales increased by 17.6% to $263.2 million, driven by a volume gain of 14.9% and a favorable price/mix of 2.7% [4][9] - Gross profit for Q1 2025 was $103.8 million, maintaining a gross margin of 39.4%, while adjusted gross profit was $120.2 million, or 45.7% of net sales [5][9][30] - Selling, general and administrative expenses (SG&A) rose to $115.3 million, increasing as a percentage of net sales to 43.8% from 35.6% in the prior year [6][9] Adjusted Metrics - Adjusted EBITDA for Q1 2025 was $35.5 million, up from $30.6 million in the prior year, reflecting improved adjusted gross profit despite higher SG&A [10][9] - Adjusted gross margin improved slightly to 45.7% from 45.3% year-over-year, indicating operational efficiency [5][30] - Adjusted SG&A expenses were $84.7 million, or 32.2% of net sales, compared to $70.9 million, or 31.7% of net sales, in the prior year [6][31] Balance Sheet and Cash Flow - As of March 31, 2025, Freshpet had cash and cash equivalents of $243.7 million and total debt of $395.7 million [11][24] - Cash from operations for the quarter was $4.8 million, a decrease from the previous year, indicating tighter cash flow management [11][29] - The company plans to utilize its balance sheet to support ongoing capital needs related to its long-term capacity plan [11] Outlook - Freshpet has revised its 2025 guidance, now expecting net sales growth of 15% to 18% compared to the previous forecast of 21% to 24% [12][16] - The adjusted EBITDA guidance has also been lowered to a range of $190 million to $210 million, down from at least $210 million [12][16] - Capital expenditures are now projected at approximately $225 million, reduced from the previous estimate of $250 million [12][16]
Analysts Estimate Freshpet (FRPT) to Report a Decline in Earnings: What to Look Out for
ZACKS· 2025-04-28 15:05
Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Freshpet despite higher revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - Freshpet is expected to report quarterly earnings of $0.11 per share, reflecting a year-over-year decrease of 47.6%, while revenues are projected to be $259.92 million, an increase of 16.1% from the previous year [3]. - The consensus EPS estimate has been revised down by 28.49% over the last 30 days, indicating a bearish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Freshpet is lower than the consensus estimate, resulting in an Earnings ESP of -57.87%, which complicates the prediction of an earnings beat [10][11]. - Freshpet currently holds a Zacks Rank of 5, further indicating a challenging outlook for surpassing the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Freshpet was expected to earn $0.44 per share but only achieved $0.36, resulting in a surprise of -18.18% [12]. - Over the past four quarters, Freshpet has beaten consensus EPS estimates three times [13]. Conclusion - Freshpet does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when evaluating the stock ahead of its earnings release [16].
Freshpet, Inc. to Report First Quarter 2025 Results on Monday, May 5, 2025
Globenewswire· 2025-04-14 20:05
BEDMINSTER, N.J., April 14, 2025 (GLOBE NEWSWIRE) -- Freshpet, Inc. (Nasdaq: FRPT) (“Freshpet” or the “Company”) today announced it will report results for the first quarter ended March 31, 2025 on Monday, May 5, 2025 before market open. The Company will host a conference call with members of the executive management team to discuss these results with additional comments and details. The conference call is scheduled to begin at 8:00 a.m. ET on Monday, May 5, 2025. To participate on the live call, listeners ...
Why Investors Thought Freshpet Stock Was a bad boy Today
The Motley Fool· 2025-03-25 21:31
The stock market in general traded listlessly on Tuesday, but the trajectory of Freshpet (FRPT -2.87%) shares was particularly uninspiring. On the back of an analyst's price-target cut, the next-generation pet care specialist's stock closed the day nearly 3% lower. By contrast, the bellwether S&P 500 index essentially traded sideways.Time for a trimBefore market open that day, Piper Sandler prognosticator Michael Lavery reduced his fair value assessment on Freshpet to $145 per share. That was down from his ...