Freshpet, Inc. Reports Second Quarter 2025 Financial Results

Core Insights - Freshpet, Inc. reported a strong financial performance in Q2 2025, with net sales increasing by 12.5% to $264.7 million compared to $235.3 million in the prior year period, driven by volume gains of 10.8% and a favorable price/mix of 1.7% [3][8] - The company is adapting to a challenging economic environment by revising its net sales targets and focusing on operational efficiencies, including reducing capital expenditures and enhancing advertising and distribution efforts [2][15] - Freshpet's gross profit for Q2 2025 was $108.2 million, representing a gross margin of 40.9%, an increase from 39.9% in the prior year period, attributed to lower input costs and reduced quality costs [4][8] Financial Performance - For the first six months of 2025, net sales rose by 15.0% to $527.9 million, with volume gains of 12.8% and a favorable price/mix of 2.2% [7][9] - The company achieved a net income of $16.4 million in Q2 2025, compared to a net loss of $1.7 million in the prior year, driven by higher sales and improved gross profit margins [6][8] - Adjusted EBITDA for Q2 2025 was $44.4 million, up from $35.1 million in the prior year, reflecting increased adjusted gross profit [6][12] Cost Management - Selling, general and administrative expenses (SG&A) decreased to $90.4 million in Q2 2025 from $95.7 million in the prior year, with SG&A as a percentage of net sales dropping to 34.1% from 40.7% [5][8] - Adjusted SG&A for Q2 2025 was $79.6 million, or 30.1% of net sales, compared to $72.9 million, or 31.0% in the prior year [5][36] Outlook - Freshpet updated its guidance for 2025, expecting net sales growth of 13% to 16%, down from the previous guidance of 15% to 18%, while maintaining an adjusted EBITDA target of $190 million to $210 million [15][16] - The company removed its long-term net sales target of $1.8 billion for 2027 but reiterated its adjusted gross margin target of 48% and adjusted EBITDA margin target of 22% for the same year [15][16] Balance Sheet - As of June 30, 2025, Freshpet had cash and cash equivalents of $243.7 million and total debt of $396.2 million [13][26] - Cash from operations for the first six months of 2025 was $38.7 million, a decrease of $9.1 million compared to the prior year, primarily due to higher variable incentive compensation payments [13][34]