Freshpet (NASDAQ:FRPT) picked the wrong time to fall short. The provider of premium refrigerated pet food announced at an ICR Conference presentation on Wednesday -- and then shortly after that via press release -- that its fourth-quarter results would miss its initial guidance. 

Two months ago, Freshpet management anticipated that sales for all of 2020 would exceed $320 million. Give that it had already rung up $234.3 million through the first three quarters of the year, that would have required fourth-quarter revenues to top $85.7 million. Analysts -- choosing to take the over given Freshpet's recent history of offering up conservative guidance -- were holding out for an average of $88.4 million. But preliminary net sales for Q4 landed at just $84.5 million. 

This isn't the time for investors to panic. If anything, it's actually a good time to watch the growth stock in case it dips on the news, and take the opportunity to buy into this disruptive company. 

A dog with a calculator and fanned out cash.

Image source: Getty Images.

It's raining cats and dogs

Freshpet isn't just another provider of high-priced foods for your canine or feline. It has also made some extremely clever moves to differentiate itself from its peers.

Stroll through the aisles of your neighborhood grocery store looking for pet food, and you'll mostly see bagged dry kibble or canned options. What you won't see are many fresh choices that require refrigeration. A retailer isn't going to stock pet food in the same coolers where it puts the human food -- that would be off-putting to more than a few shoppers. 

But Freshpet made the brilliant call a few years ago to start cutting deals with major supermarket chains and mass-market retailers to install its own branded refrigerators for its wares in their stores.

As a result of those negotiations, it now has 22,371 of those fridges in stores across the country. That might not seem like such a big deal, but think about it. Do you think supermarket chains will be willing to commit a lot more of their retail space to specific companies' branded coolers? Of course not. This should limit Freshpet's competitors in the high-end refrigerated market to selling through specialty pet food stores or directly to consumers. Freshpet is the only player in this niche that provides the convenience of being available where you shop every week anyway. 

There's no such thing as a good miss, and let's not sugarcoat this one. Freshpet's share price soared by 140% last year as a thinking investor's growth stock. After the "shelter in place" mandates kicked in during the early months of the pandemic, pet adoptions soared. The "humanization of pets" trend finds us treating our furry friends like members of the family, so of course many pet owners are ready to spring for fresh dog or cat food over dry kibble. Freshpet was -- and is -- sitting at the intersection of two big trends. How can it go wrong? Well, its $84.5 million in revenues may have been a beefy 28% above the $65.8 million it brought in during Q4 2019, but it was barely above the $84.2 million it served up in Q3 2020.  

The counterargument to this is that the miss may have only been a hiccup -- and one that Freshpet unintentionally orchestrated. Demand has been so strong for the company's products that it's building a new kitchen facility in Texas that will more than double its production capacity by the middle of next year. When demand spiked a few months ago, management pared back its advertising to make sure it could meet the needs of its existing customer base within its current capacity constraints. 

Freshpet will still increase its revenue by nearly 30% for all of 2020 -- its fourth consecutive year of accelerating top-line growth. It remains a uniquely positioned growth stock with a world of opportunity in its future. You can't applaud any miss, but some are easier to forgive than others.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.