Freshpet, Inc. Lowers Guidance, Falls Short of Expectations in First-Quarter

Freshpet, Inc. (NASDAQ: FRPT) has released its financial results for the first quarter of 2025, showcasing a notable increase in net sales but a decline in net income compared to the previous year. This article delves into the company’s performance against expectations and its revised guidance for the year.

Despite Growth in Sales, Freshpet Inc. Reports a Net Loss of $12.7 Million in First-Quarter

In the first quarter of 2025, Freshpet, Inc. (FRPT) reported net sales of $263.2 million, a 17.6% rise from the previous year’s $223.8 million. The growth was driven by a 14.9% increase in volume and a favorable price/mix impact of 2.7%. Despite this positive trend in sales, the company faced a net loss of $12.7 million, a stark contrast to the prior year’s net income of $18.6 million. Freshpet’s gross margin remained stable at 39.4%, consistent with the previous year.

However, the company’s performance fell short of expectations, with an earnings per share (EPS) of -$0.26, significantly missing the anticipated EPS of $0.152. Revenue also came in slightly below the expected $265.01 million. The increase in selling, general, and administrative expenses (SG&A) to $115.3 million, from $79.7 million the previous year, contributed to the net loss. This rise in SG&A was primarily due to higher media spending and non-recurring charges, including legal obligations and distributor transition costs.

Adjusted EBITDA for the quarter stood at $35.5 million, up from $30.6 million in the prior year, driven by increased adjusted gross profit. However, this was partially offset by higher adjusted SG&A expenses. The company’s cash from operations was $4.8 million, a slight decrease from the previous year. Freshpet’s financial performance in the first quarter reflects the challenges posed by increased operational costs and economic headwinds.

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Freshpet Revises Full-Year 2025 Guidance Downwards, Expects Revenue Between $1.12-$1.15 Billion

In light of the first quarter results, Freshpet has revised its full-year 2025 guidance. The company now expects net sales to range between $1.12 billion and $1.15 billion, representing a growth of 15% to 18% from 2024. This is a downward adjustment from the previous guidance of $1.18 billion to $1.21 billion, which anticipated a 21% to 24% increase. The revised forecast reflects a more cautious outlook amid ongoing economic challenges.

Additionally, Freshpet has adjusted its guidance for Adjusted EBITDA to a range of $190 million to $210 million, compared to the earlier projection of at least $210 million. Capital expenditures are now expected to be around $225 million, reduced from the previous estimate of $250 million. These adjustments indicate Freshpet’s strategic decision to align its growth plans with the current economic conditions, aiming to maintain stability and long-term shareholder value.

Despite the challenging environment, Freshpet remains optimistic about its long-term prospects. The company continues to focus on operational improvements and believes it is well-positioned to navigate the near-term challenges. With a commitment to serving pets and their owners, Freshpet aims to deliver fresh, high-quality pet food while adapting to market dynamics. The company’s approach reflects a balanced strategy of growth and caution, ensuring resilience in a fluctuating economic landscape.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.

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