Shares of Freshpet (FRPT 1.31%), the maker of refrigerated pet food, were moving higher today after it delivered strong results in its third-quarter earnings report, beating estimates on the top and bottom lines.
As of 1:33 p.m. ET, the stock was up 19% on the day.
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Freshpet hits its numbers
Freshpet, which is best known for its refrigerated rolls of dog and cat food, showed off strong growth in its Q3 earnings report. Overall revenue was up 32.6% to $200.6 million, which outpaced estimates at $194.2 million.
Gross margin surged from 29.4% to 33% as profitability is benefiting from its growth into the new Ennis facility as well as lower input costs. It also gained leverage on selling, general, and administrative expenses, which fell from 39.9% of revenue to 36.6%.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $23.2 million, up from $3.5 million. On a generally accepted accounting principles (GAAP) basis, its net-loss per share improved from $0.39 to $0.15, which was better than the consensus at a loss of $0.18.
CEO Billy Cyr said,
Fiscal year 2023 is shaping up to be the kind of year we had hoped it would – delivering strong top-line and bottom-line growth that puts us ahead of the pace needed to deliver our 2027 goals. As a result of our strong third-quarter performance, we are raising our 2023 guidance today.
Guidance gets a boost too
Freshpet raised its guidance on both ends, now calling for $755 million in sales, up from a previous forecast of $750 million, representing 27% top-line growth. It raised its adjusted EBITDA guidance to $62 million from $55 million.
Overall, the quarter shows the company's expansion strategy is paying off, and investors are clearly responding to the results. While Freshpet stock is still expensive, the company appears to have a long growth opportunity ahead of it as it gains market share in the pet food industry.
