Freshpet Inc. (NASDAQ:FRPT) stock slipped in early trading Monday after the pet food maker delivered a fourth-quarter earnings beat but posted revenue that came in just shy of Wall Street expectations.
Net sales increased 8.6% to $285.2 million from $262.7 million a year earlier, driven by 9.7% volume growth and partially offset by a 1.1% unfavorable price/mix impact.
Freshpet reported fourth-quarter earnings of 64 cents per share, topping the 59-cent estimate, while revenue of $285.229 million narrowly missed the $285.702 million consensus estimate.
Net income increased to $33.8 million from $18.1 million. Adjusted EBITDA rose to $61.2 million from $52.6 million.
Fourth-quarter gross profit was $123.5 million, or 43.3% of net sales, compared with $111.6 million, or 42.5%, a year earlier. Adjusted gross profit was $138.1 million, or 48.4% of net sales, compared with $126.3 million, or 48.1%.
Selling, general, and administrative expenses were $79.0 million, or 27.7% of net sales, down from $92.2 million, or 35.1%. Adjusted SG&A was $76.9 million, or 27.0% of net sales, compared with $73.6 million, or 28.0%.
Full-Year Results
For the full year ended Dec. 31, 2025, net sales increased 13.0% to $1.102 billion from $975.2 million. Net income rose to $139.1 million from $46.9 million. GAAP earnings were $2.85 per share on a basic basis and $2.64 per share on a diluted basis.
Adjusted EBITDA increased to $195.7 million from $161.8 million. Free cash flow was $12.4 million, compared with ($32.8) million in the prior year.
Freshpet said full-year net income increased due in part to a $68.4 million income tax benefit tied primarily to the release of its valuation allowance, while SG&A rose with $29.2 million in higher media spend and $17.7 million of non-recurring charges in 2025, compared with a $9.9 million gain on an equity investment in the prior year.
Balance Sheet and Cash Flow
The company ended 2025 with $278.0 million in cash and cash equivalents and $397.3 million of debt outstanding, net of $5.2 million of unamortized debt issuance costs. Operating cash flow was $160.6 million, and capital expenditures were $148.2 million.
CEO Billy Cyr said, “Fiscal year 2025 taught us some very important lessons and challenged the resilience of our business and our organization. In the end, our team demonstrated tremendous agility – delivering growth well in excess of the dog food category, surpassing $1 billion in net sales for the first time, expanding margins and achieving positive free cash flow.”
“We retooled our marketing model to drive household penetration growth, and we are building momentum in e-commerce. We also began testing island fridges – our most significant step change in retail visibility and availability – and we recently started up our first manufacturing line utilizing a breakthrough technology that we believe can enhance both product quality and profitability.”
Outlook
For 2026, Freshpet forecast net sales growth of 7% to 10% and adjusted EBITDA of $205 million to $215 million, and said it expects “Positive free cash flow with capital expenditures of ~$150 million.”
Freshpet forecasts fiscal 2026 sales of $1.179 billion to $1.212 billion, compared with an estimate of $1.206 billion.
FRPT Price Action: Freshpet shares were down 3.02% at $72.26 during premarket trading on Monday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
Recent Comments