Freshpet Rises 2% on Strong Q3 Results and Upgraded Forecasts

BEDMINSTER, N.J. - Freshpet, Inc. (NASDAQ:FRPT) shares rose by 2.48% after the company reported third-quarter earnings that exceeded analyst expectations and raised its full-year guidance. The pet food company recorded strong revenue growth and significant margin expansion during the quarter.

Freshpet reported adjusted earnings of $0.24 per share for the third quarter, surpassing the analyst expectation of $0.15. Quarterly revenue reached $253.4 million, a 26.3% increase compared to the same period last year, and above the anticipated $248.21 million. This marks the 25th consecutive quarter the company has achieved year-over-year net sales growth exceeding 25%.

The company's gross margin increased to 40.4% compared to 33% in the same quarter last year, while the adjusted gross margin rose from 40.2% to 46.5%.

Freshpet raised its full-year guidance for 2024, increasing its revenue expectation to approximately $975 million. This figure is above the previous estimate of at least $965 million and the analyst expectation of $969.5 million. The company also upgraded its adjusted EBITDA forecast from at least $140 million to at least $155 million.

CEO Billy Cyr commented on the results: "Our third-quarter results demonstrate the strength and consistency of growth we are striving for in both net sales and profitability... This further bolsters our confidence in our ability to meet or exceed our 2027 targets."

For the quarter, the company reported a net income of $11.9 million, a significant improvement compared to a net loss of $7.2 million in the same period last year. Freshpet attributed its strong performance to volume increases, lower input costs, and reduced quality costs.

In the first nine months of 2024, Freshpet generated $103.9 million in operating cash flow, compared to $39 million in the same period last year, indicating improved cash generation.