Shares of Freshpet (FRPT 6.48%), the maker of fresh, refrigerated dog and cat food, were moving higher the day after the company delivered a better-than-expected earnings report. After the stock got swept up in the broader market sell-off yesterday, it redeemed itself today, tacking on 3.9% as of 1:45 p.m. ET with the help of a bullish analyst note.
Freshpet keeps up the growth
Freshpet has been gaining market share in the pet food sector for years. The company continued that pattern in the second quarter, posting a 28.3% increase in revenue to $235.3 million, topping estimates of $231 million. Even better, the gross margin surged from 32.3% to 39.9% as the company benefited from lower input and quality costs and improved leverage on plant-related expenses.
That drove adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to jump from $9 million to $35.1 million. On a generally accepted accounting principles (GAAP) basis, the company's per-share loss narrowed $0.35 to $0.03, ahead of estimates of a $0.05 per-share loss.
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CEO Billy Cyr said: "Freshpet is delivering disciplined growth. That has enabled us to significantly improve profitability while continuing to deliver category-leading net sales growth."
A positive note from Baird also seemed to push the stock higher as it maintained an outperform rating on the stock and raised its price target to $140, calling the Q2 results robust.
NASDAQ: FRPT
Key Data Points
Freshpet sees better times ahead
The company also raised its guidance for the full year, as it now sees revenue growth of at least 26% to $965 million. That was above the previous target of at least $950 million and better than the consensus of $960.5 million and adjusted EBITDA of at least $140 million, compared to earlier guidance of at least $120 million.
Freshpet is executing on both the top and bottom lines and continues to have a long growth runway ahead. If it maintains its momentum, the stock should keep moving higher.
