Freshpet Misses Earnings Estimates in Q1, Lowers 2025 Guidance

Freshpet, Inc. FRPT reported mixed first-quarter 2025 results, wherein the top line surpassed the Zacks Consensus Estimate and increased year over year. However, the bottom line missed the consensus estimate and decreased year over year. The company also revised its 2025 guidance downward.

FRPT’s Quarterly Performance: Key Metrics & Insights

Freshpet reported earnings per share of 9 cents, which decreased from 21 cents in the same quarter last year. The metric missed the Zacks Consensus Estimate of 13 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

FRPT reported consolidated net sales of $263.2 million, beating the Zacks Consensus Estimate of $259 million. Net sales increased 17.6% from $223.8 million in the year-ago period. This growth was mainly attributed to a 14.9% increase in volume and a 2.7% improvement in the price/mix.

Freshpet, Inc. Price, Consensus and EPS Surprise

 

Freshpet, Inc. price-consensus-eps-surprise-chart | Freshpet, Inc. Quote

Freshpet’s adjusted gross profit increased 18.5% year over year to $120.2 million. The adjusted gross margin expanded 40 basis points (bps) to 45.7% from 45.3% in the first quarter of fiscal 2024. This improvement was driven by lower input costs and reduced quality expenses, which were fully offset by decreased leverage on plant costs.

Adjusted SG&A expenses rose 19.5% year over year to $84.7 million in the quarter. As a percentage of net sales, adjusted SG&A expenses increased 50 bps year over year to 32.2%. This increase was primarily driven by higher media spend as a percentage of net sales, partially offset by lower logistics costs than net sales.

The adjusted EBITDA was $35.5 million, up 16.2% from $30.6 million in the year-ago period. This rise was driven by a higher adjusted gross profit, partially offset by increased adjusted SG&A expenses.

FRPT Stock Past Three-Month Performance

Freshpet’s Financial Health Snapshot

FRPT exited the quarter with cash and cash equivalents of $243.7 million, total debt of $395.7 million, net of $6.8 million in unamortized debt issuance costs.

Cash provided by operations for the quarter was $4.8 million, down $0.6 million from the same period in the prior year. Capital spending for the fiscal first quarter was $26.5 million. Capital expenditure is projected to be $225 million in 2025 compared with the $250 million mentioned earlier.

What to Expect From FRPT in 2025

For 2025, the company is revising its guidance. It expects net sales of $1.12-$1.15 billion, indicating an increase of 15-18% from the 2024 actual, compared with the previously stated $1.18-$1.21 billion, which suggested an increase of 21-24%. Adjusted EBITDA is expected to be $190-$210 million, down from the prior mentioned $210 million. The company recorded adjusted EBITDA of $161.8 million in 2024.

In the past three months, this Zacks Rank #5 (Strong Sell) company’s stock has lost 46.2% against the industry’s growth of 1%.

Stocks to Consider

We have highlighted three better-ranked stocks, namely Nomad Foods Ltd. NOMD, United Natural Foods, Inc. UNFI and Canada Goose GOOS.

Nomad Foods manufactures and distributes frozen foods. NOMD presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NOMD’s current financial-year sales and earnings indicates growth of 7% and 11.4%, respectively. Nomad Foods delivered a trailing four-quarter earnings surprise of 5%, on average.

United Natural is the leading distributor of natural, organic and specialty food and non-food products. It currently carries a Zacks Rank of 2 (Buy).

UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average. The consensus estimate for United Natural’s current financial-year sales and earnings indicates growth of 1.9% and 485.7%, respectively, from the year-ago period’s reported figures.

Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 at present.

The Zacks Consensus Estimate for GOOS’s current fiscal year’s earnings and revenues implies declines of 1.4% and 4.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 71.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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