BEDMINSTER, N.J. \u2013 Freshpet, which has factories in Bethlehem and Quakertown, opened Wednesday on Wall Street with its shares down $2.05 or 2.95%.<\/p>\n
One might think the brand had just reported a bad third quarter, but the opposite is true. Just about every marker was up, except for net income, and that was due to a large, deferred tax adjustment from the year before.<\/p>\n
What also makes Freshpet\u2019s stock price decline puzzling is that its third quarter results blew away analysts\u2019 estimates.<\/p>\n
According to Zacks Equity research, the company\u2019s quarterly earnings topped estimates by 65.71%. Over the past four quarters, Freshpet has beaten earnings estimates three times.<\/p>\n
In addition, the company raised its revenue and earnings guidance for the year. So, who knows why the Street has turned negative?<\/p>\n
Management Comments<\/p>\n
\u201cOur third quarter results demonstrate the strength and durability of the Freshpet business model,\u201d Billy Cyr, Freshpet\u2019s chief executive officer, said in a statement.<\/p>\n
\u201cIn a challenging consumer and intense competitive environment, we delivered double-digit net sales growth, expanded margins and achieved our strongest Adjusted Gross Margin in more than seven years, while continuing to grow market share,\u201d Cyr added.<\/p>\n
\u201cWe are executing well against the priorities within our control and strengthening the competitive advantages that differentiate Freshpet,\u201d he said, \u201cincluding the quality of our products, our manufacturing scale and expertise, our expanding omnichannel presence and our growing franchise of highly loyal pet parents.\u201d<\/p>\n
Cyr went on to say he believes those advantages provide a strong foundation to deliver sustainable, profitable growth, capture a meaningful share of the long-term opportunity in fresh pet food and fulfill the company\u2019s mission to help pets live longer, happier and healthier lives.<\/p>\n
Freshpet 2026<\/p>\n
3rd Quarter Results<\/p>\n
In thousands except per share<\/p>\n
30-Sep-26<\/p>\n
30-Sep-25<\/p>\n
Net Sales<\/p>\n
317,840<\/p>\n
288,848<\/p>\n
Cost of Goods Sold<\/p>\n
176,533<\/p>\n
174,656<\/p>\n
Gross Profit<\/p>\n
141,307<\/p>\n
114,192<\/p>\n
Selling, General & Admin.<\/p>\n
106,177<\/p>\n
89,291<\/p>\n
Income from Operations<\/p>\n
35,130<\/p>\n
24,901<\/p>\n
Other (Expenses)\/Income<\/p>\n
-707<\/p>\n
-1,196<\/p>\n
Income Before Taxes<\/p>\n
34,423<\/p>\n
23,705<\/p>\n
Income Taxes<\/p>\n
4,711<\/p>\n
-77,958<\/p>\n
Stockholders Income<\/p>\n
29,712<\/p>\n
101,663<\/p>\n
Total Comprehensive Income<\/p>\n
29,677<\/p>\n
101,577<\/p>\n
Net Income Per Share<\/p>\n
\u00a0 Basic<\/p>\n
0.61<\/p>\n
2.08<\/p>\n
\u00a0 Diluted<\/p>\n
0.58<\/p>\n
1.86<\/p>\n
Third Quarter 2026<\/p>\n
Freshpet reported that volume gains of 10% helped net sales increase 10% to $317.8 million for the third quarter of 2026, compared to $288.8 million in the prior year period.<\/p>\n
A key reason for the growth was gross profit of $141.3 million, or 44.5% as a percentage of net sales, for the third quarter, compared to $114.2 million, or 39.5% as a percentage of net sales, in the previous year period.<\/p>\n
The increase was primarily due to improved leverage on plant expenses, reduced quality costs and lower input costs. Freshpet also noted adjusted gross profit was 50% of net sales, compared to 46% in the prior year period.<\/p>\n
Selling, general and administrative expenses (SG&A) the company said were $106.2 million, or 33.4% as a percentage of net sales, for the third quarter of 2026, compared to 30.9% in the prior year period.<\/p>\n
SG&A as a percentage of net sales increased primarily due to increased logistics costs and variable compensation accrual, partially offset by decreased media spend as a percentage of net sales. Adjusted SG&A for the third quarter was\u00a029.6% of net sales, compared to 27.1% in the previous year period.<\/p>\n
Freshpet reported net income was $29.7 million for the third quarter of 2026 compared to $101.7 million in the previous year period.<\/p>\n
According to the company, the decrease in net income was due to a $77.9 million deferred income tax benefit recognized in the previous year period as a result of the release of the majority of the valuation allowance. \u00a0<\/p>\n
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $64.5 million for the third quarter of 2026 compared to $54.6 million in the prior year period.<\/p>\n
The increase in adjusted EBITDA was a result of increased adjusted gross profit, partially offset by higher adjusted SG&A, Freshpet noted.<\/p>\n
First Nine Months of 2026<\/p>\n
Freshpet reported net sales increased 12.8% to $921.1 million for the first nine months of 2026, compared to $816.8 million in the previous year period. The increase in net sales was primarily driven by volume gains of 13.3%, partially offset by unfavorable price\/mix of 0.5%.<\/p>\n
Gross profit was $390.7 million, or 42.4% as a percentage of net sales, for the first nine months of 2026, compared to $326.2 million, or 39.9% as a percentage of net sales, in the previous year period.<\/p>\n
SG&A were $329.5 million, the company said, or 35.8% as a percentage of net sales, for the first nine months of 2026, compared to $295.0 million, or 36.1% as a percentage of net sales, in the prior year period.<\/p>\n
Freshpet reported net income was $97.7 million for the first nine months of 2026 compared to $105.3 million in the previous year period.<\/p>\n
Also, the company said adjusted EBITDA was $154.6 million for the first nine months of 2026 compared to $134.5 million in the previous year period.<\/p>\n
<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/11\/6a7b811e34bab.image.jpg\")
<\/p>\n
Photo courtesy of J.G. Petrucci Company \/ BGO Cold Chain<\/p>\n
Balance Sheet<\/p>\n
As of September\u00a030, 2026, the company reported cash and cash equivalents of $345.9 million with $399 million of debt outstanding.<\/p>\n
Cash and cash equivalents increased $67.9 million compared to $278 million as of December 31, 2025, primarily as a result of the $100 million of cash proceeds received from the sale of its equity investment and $65.3 million of Free Cash Flow, partially offset by $102.3 million of share repurchases. \u00a0<\/p>\n
For the nine months ended September\u00a030, 2026, Freshpet claimed cash from operations was $145.5 million, an increase of $40.1 million compared to the prior year period.<\/p>\n
Outlook<\/p>\n
For full year 2026, the company said it is updating its guidance and now expects the following:<\/p>\n
Net sales growth in the range of 12% to 13%, compared to growth of 10% to 12% in the previous guidance;<\/p>\n
Adjusted EBITDA in the range of $215 million to $220 million, compared to $210 million to $220 million in the previous guidance; and<\/p>\n
Positive Free Cash Flow with capital expenditures between $125 to $150 million, compared to ~$150 million in the previous guidance.<\/p>\n
In addition, the company noted it is reiterating its long-term guidance. For full year 2027, the Company expects:<\/p>\n
Net sales well in excess of the category growth rate, unchanged;<\/p>\n
Adjusted gross margin of at least 49%, unchanged; and<\/p>\n
Adjusted EBITDA margin in the range of 20% to 22%, unchanged.<\/p>\n
Freshpet, Inc. is an American pet food company. Its cat food and dog food products are marketed as fresh and need to be kept refrigerated. It is listed on the Nasdaq exchange with the ticker symbol FRPT.<\/p>\n
\nCopyright 2026 Maranatha Broadcasting Co., Inc.. All Rights Reserved.\n<\/p>\n
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