Freshpet shares gain 8% on earnings beat; Stifel positive

SECAUCUS, N.J. – Freshpet, Inc. (NASDAQ:) shares jumped 8% following the announcement of its first-quarter earnings, which exceeded analysts’ expectations.

The company reported an adjusted EPS of $0.37, significantly surpassing the estimated loss of $0.23. Revenue for the quarter was also higher than anticipated, coming in at $223.8 million against the consensus estimate of $216.17 million.

The robust performance represents a 33.6% increase in net sales compared to the same quarter last year, signaling strong demand for the company’s products. Freshpet’s CEO, Billy Cyr, attributed the impressive results to the company’s solid business model and operational improvements, which have led to significant margin expansion.

“Our intense focus on operational improvements is delivering the margin expansion we knew we could achieve with additional scale,” Cyr commented.

Investors responded positively to the news, with the stock price reflecting their optimism. The company’s net sales growth was driven by a 30.6% increase in volume, and gross profit margins grew to 39.4%, up from 30.3% in the prior year. Adjusted EBITDA saw a substantial rise to $30.6 million, compared to just $3.0 million in the first quarter of the previous year.

Looking ahead, Freshpet has updated its full-year 2024 guidance, maintaining its net sales forecast at a minimum of $950 million, which indicates at least a 24% increase from 2023. However, this figure is slightly below the analyst consensus of $955.4 million.

The company has raised its Adjusted EBITDA expectation to at least $120 million, up from the previous range of $100 to $110 million. Capital expenditures are projected to be around $210 million, consistent with prior guidance.

“We view 1Q24 as solid and reflective of ongoing share gains and management’s focus on profitable growth. We anticipate consensus estimates will increase slightly, with FRPT shares trading similarly,” Stifel analysts said in a note.

Freshpet’s balance sheet remains robust, with $257.9 million in cash and cash equivalents and a net debt position of $393.6 million as of March 31, 2024. The company plans to use its financial resources to support ongoing capital needs as part of its long-term capacity plan.

Cyr remains optimistic about the company’s trajectory, stating, “If we continue to do well, we will create significant shareholder value while fulfilling our mission to nourish pets, people, and the planet.”

Freshpet’s strong start to the year and upward revision in EBITDA forecasts suggest confidence in the company’s growth and profitability prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.