Why Is Freshpet Stock Rocketing Today?

Freshpet Inc FRPT reported fourth-quarter fiscal 2023 sales growth of 29.9% year-on-year to $215.42 million, beating the consensus of $204.36 million.

Net sales for the quarter were driven primarily by volume gains of 25%. EPS was $0.31, sharply above the consensus of $0.05.

Gross profit increased to $74.57 million from $45.71 million YoY, and Adjusted gross profit was $88.52 million (+61.6% Y/Y). The adjusted gross margin expanded by 806 bps to 41.1%.

The company’s net income was $15.3 million compared to a net loss of $(2.9) million for the prior year, reflecting the contribution from higher sales, increased gross margin, and reduced logistics costs as a percentage of net sales.

Selling, general and administrative expenses rose 24.9% to $59.68 million, and adjusted SG&A expenses rose 53.6% Y/Y to $57.19 million. Adjusted EBITDA was $31.33 million (+66.9% Y/Y), and the margin expanded by 322 bps to 14.5%.

Net cash flows provided by operating activities for the fiscal totaled $75.49 million, compared to cash used of $(43.23) million in 2022. The company held $297.87 million in cash and equivalents as of December 31, 2023.

“In 2024, we intend to continue making strong margin improvement and demonstrate continued capital discipline, while sustaining the net sales growth that Freshpet has become known for —further driving profitability and creating significant shareholder value,” commented Billy Cyr, Freshpet’s Chief Executive Officer.

2024 Outlook: Freshpet expects net sales of at least $950 million versus the $945.74 million consensus. It sees adj. gross margin expansion of at least 100 basis points.

The company expects adjusted EBITDA of $100 million -$110 million and capital expenditures of ~$210 million.

Price Action: FRPT shares traded higher by 17.28% at $107.91 on the last check Monday.

Photo via Pixabay