Freshpet (FRPT, Financial) delivered an impressive quarterly earnings report, achieving a surprise profit in Q1 amidst challenging conditions that affected competitors. With a 34% revenue increase and a 31% rise in volume, the company continues to demonstrate strong demand for premium pet food and remains on track to meet its FY24 revenue guidance and long-term financial objectives.
Key highlights from the quarter include:
- FRPT reported a year-over-year sales growth of 30% last quarter, which further accelerated this quarter.
- The company achieved its second consecutive quarter of positive EPS at $0.37, with adjusted gross margins rising significantly to 45.3%—surpassing its 2027 target of 45%.
- Expansion of FRPT's fridge network to over 27,000 retail locations helped bolster brand loyalty, with 617 new installations in Q1.
- Despite a sluggish report from Chewy (CHWY, Financial), demand for premium pet products remains high, a sentiment echoed by General Mills (GIS, Financial) regarding their wet pet food sales.
- FRPT maintained its FY24 revenue forecast of at least $950 million and aims to expand its household penetration to 20 million by 2027.
After a robust Q4, Freshpet (FRPT, Financial) continues to capitalize on the sustained demand for premium pet food. The company's focus on improving margins and profitability signals potential for further growth, as pet owners prioritize high-quality pet food over other discretionary spending.
