Freshpet shares jump as Q3 earnings soar past estimates

Investing.com -- Freshpet, Inc. (NASDAQ: FRPT) reported third-quarter earnings that significantly exceeded analyst expectations, driving shares up 5.3% following the announcement.

The pet food manufacturer posted adjusted earnings of $1.86 per share for the third quarter, dramatically surpassing the analyst estimate of $0.43. Revenue reached $288.8 million, beating the consensus estimate of $284.22 million and representing a 14% increase compared to the same period last year. The company’s performance was primarily driven by volume gains of 12.9% and favorable price/mix of 1.1%.

"We are quickly adjusting to the new economic reality and remain one of the best performing pet food businesses—with strong financial and operational results and category-leading growth," said Billy Cyr, Freshpet’s Chief Executive Officer.

The company achieved a notable milestone by generating positive free cash flow in the third quarter and now expects to be free cash flow positive for fiscal year 2025, a year earlier than originally planned. Freshpet’s adjusted EBITDA rose to $54.6 million from $43.5 million in the prior year period.

Freshpet updated its full-year 2025 guidance, now projecting net sales growth of approximately 13%, down from its previous forecast of 13% to 16%. The company also narrowed its adjusted EBITDA outlook to between $190 million and $195 million, compared to the previous range of $190 million to $210 million. Additionally, Freshpet reduced its capital expenditure forecast to approximately $140 million from $175 million previously.

Gross margin for the quarter was 39.5%, slightly down from 40.4% in the prior year period, while adjusted gross margin reached 46.0% compared to 46.5% a year ago. The company’s net income surged to $101.7 million, including a discrete $77.9 million tax benefit resulting from sustained profitability.

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