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]