Freshpet Surges On Strong Q3 Earnings Beat, 25th Quarter Of Double-Digit Sales Growth: Details

Freshpet, Inc. FRPT shares are trading higher after the company reported better-than-expected third-quarter results.

EPS for the quarter was $0.24, an improvement from a loss of $0.15 a year ago, topped the analyst consensus of $0.08.

Quarterly sales of $253.367 million beat the street view of $248.211 million. Volume gains of 26.1% primarily drove the increase in net sales.

For the third quarter, adjusted gross profit was $117.7 million, or 46.5% of net sales, compared to $80.6 million, or 40.2% of net sales, for the prior year period.

Adjusted EBITDA rose $20.2 million YoY to $43.5 million, and margin expanded by 560 bps to 17.2%.

As of September 30, the company had cash and equivalents of $274.6 million, with $394.6 million of debt outstanding net of $7.9 million of unamortized debt issuance costs.

Cash from operations for the nine months ended September end was $103.9 million, compared to $38.97 million a year ago. For the quarter, operating cash flow was $56.1 million.

The company achieved a 790 basis point improvement in quality, input, and logistics costs in the quarter, with adjusted gross margin and cost efficiencies surpassing long-term targets, supported by focused workforce training.

“Our third quarter results demonstrate the strength and consistency of both net sales and profitability growth we have been striving to deliver. We delivered our 25th consecutive quarter of >25% year on year net sales growth and matched that with a very strong operating performance. This further strengthens our confidence in our ability to meet or exceed our 2027 goals,” commented Billy Cyr, Freshpet’s Chief Executive Officer.

“We are raising our net sales and Adjusted EBITDA guidance for 2024 to reflect this continued strong performance and our confidence in our ability to finish the year strongly and, as a result, create significant shareholder value in a way that serves pets, people, and the planet.”

2024 Outlook, raised: FRPT now sees net sales of ~$975 million (prior expectation at least $965 million) versus consensus of $969.47 million.

The company expects Adjusted EBITDA of at least $155 million (prior expectation $140 million) and capital expenditures of ~$180 million (prior $200 million).

Price Action: FRPT shares are trading higher by 6.96% to $143.00 at last check Monday.