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Freshpet Q4 Earnings Miss Estimates, Gross Margin Expands Y/Y

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Freshpet, Inc. (FRPT - Free Report) reported fourth-quarter fiscal 2024 results, wherein the top line met the Zacks Consensus Estimate, while the bottom line missed the same. Both the metrics increased year over year.

FRPT’s Quarterly Performance: Key Metrics and Insights

Freshpet reported earnings per share (EPS) of 36 cents, which increased from 31 cents in the same quarter last year. The metric missed the Zacks Consensus Estimate of 44 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Freshpet, Inc. Price, Consensus and EPS Surprise

Freshpet, Inc. Price, Consensus and EPS Surprise

Freshpet, Inc. price-consensus-eps-surprise-chart | Freshpet, Inc. Quote

Freshpet reported consolidated net sales of $262.7 million that came almost in line with the Zacks Consensus Estimate of $263 million. Net sales increased 22% from $215.4 million posted in the year-ago period. This year-over-year growth was driven by a 20.7% gain in sales volume.

Freshpet’s adjusted gross profit increased 42.6% year over year to $126.3 million. The adjusted gross margin expanded 700 basis points (bps) to 48.1% compared with 41.1% in the fourth quarter of fiscal 2023. This improvement was driven by lower input costs, reduced quality-related expenses and better leverage on plant costs.

Adjusted SG&A expenses rose 28.7% year over year to $73.6 million in the quarter. As a percentage of net sales, adjusted SG&A expenses increased 140 bps year over year to 28%.

The adjusted EBITDA was $52.6 million compared with $31.3 million in the year-ago period. This growth was driven by a higher gross margin, partially offset by increased SG&A expenses.

FRPT’s Financial Health Snapshot

Freshpet exited the quarter with cash and cash equivalents of $268.6 million, total debt outstanding of $395.2 million, net of $7.3 million in unamortized debt issuance costs and total shareholders’ equity of $1,055.4 million.

For the year ended Dec. 31, 2024, net cash provided by operating activities was $154.3 million, while capital expenditures totaled $187.1 million. Management expects 2025 capital expenditures to be approximately $250 million.

What to Expect From FRPT in 2025

For 2025, management anticipates net sales in the range of $1.18 billion to $1.21 billion, indicating an increase of 21% to 24% from 2024. This Zacks Rank #1 (Strong Buy) company foresees adjusted EBITDA to be $210 million compared with $161.8 million recorded in 2024.

FRPT shares lost 5.7% last Friday. In the past three months, the stock has lost 35.2% compared with the industry’s decline of 4.5%.

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