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]

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]

Financial Performance - Net sales reached $263.2 million, a 17.6% year-over-year increase[14] - Adjusted Gross Margin improved to 45.7%, a 40 bps increase[14] - Adjusted EBITDA was $35.5 million, a $5.0 million increase year-over-year, with an Adjusted EBITDA Margin of 13.5%[14] - Operating cash flow was $4.8 million, a decrease of $0.6 million year-over-year[14] Retail Metrics - Total household penetration increased by 13%[14] - Total buy rate increased by 6%[14] - MVP (Most Valuable Pet Parents) household penetration increased by 21%[14] - Cubic feet increased by 7%[14] - Store count increased by 5%[14] - Total distribution points increased by 15%[14] Strategic Initiatives - The company is addressing the current macroeconomic environment by focusing on value products and marketing channels[16, 17, 20] - The company is expanding capacity on-budget and on-time while improving margins[15] - The company expects to end 2025 with $200 million in cash and be free cash flow positive in 2026[65, 69] Guidance - Updated FY 2025 net sales guidance to $1.12 billion - $1.15 billion, representing a 15-18% year-over-year growth[62] - Adjusted EBITDA guidance is $190 million - $210 million[62] - Capital expenditures are expected to be approximately $225 million[62]

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]

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]

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].

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 ...

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 ...

Group 1 - Freshpet's stock closed at $86.64, reflecting a slight increase of +0.25% from the previous trading day, outperforming the S&P 500's gain of 0.08% [1] - Over the past month, Freshpet's shares have declined by 18.77%, underperforming the Consumer Staples sector, which gained 1.88% [1] Group 2 - Freshpet is expected to report an EPS of $0.20, a decrease of 4.76% from the same quarter last year, with anticipated revenue of $266.89 million, representing a 19.23% increase year-over-year [2] - For the entire fiscal year, earnings are projected at $1.44 per share and revenue at $1.19 billion, indicating increases of +87.01% and +21.66% respectively from the prior year [3] Group 3 - Recent changes in analyst estimates for Freshpet are seen as indicators of the company's business outlook, with positive revisions suggesting optimism [3][4] - The Zacks Rank system, which evaluates estimate changes, currently ranks Freshpet at 3 (Hold), following a 7.01% decline in the Zacks Consensus EPS estimate over the past month [5] Group 4 - Freshpet's Forward P/E ratio stands at 59.89, significantly higher than the industry's average Forward P/E of 16.48, indicating a premium valuation [6] - The Food - Miscellaneous industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 162, placing it in the bottom 36% of over 250 industries [6][7]

Core Viewpoint - Freshpet has experienced a significant decline in stock price, nearly 11% week-to-date, following a downgrade and price target cuts from analysts [1] Analyst Downgrade - Oppenheimer's Rupesh Parikh downgraded Freshpet's recommendation from outperform to perform, removing the previous price target of $140 per share [2] - The downgrade reflects management's subdued outlook and disappointing guidance, suggesting investors should wait for signs of improvement [3] Price Target Cuts - JPMorgan's Ken Goldman reduced his price target for Freshpet from $154 to $102, indicating the stock is fairly valued at this new level [4] - Stifel's Mark Astrachan lowered his target from $155 to $135, maintaining a buy recommendation [4] Business Strategy and Outlook - Despite recent challenges, Freshpet's focus on healthy pet food products is viewed as a solid business strategy, with potential for robust growth [5] - The stock may be considered a "buy on weakness" opportunity for investors [5]