Freshpet reported third‑quarter 2025 results with net sales of $288.8 million, up 14 % year‑over‑year, driven by 12.9 % volume growth and a 1.1 % favorable price/mix. Net income rose to $101.7 million from $11.9 million a year earlier, largely due to a $77.9 million valuation allowance release and lower SG&A. Adjusted EBITDA reached $54.6 million, up from $43.5 million, and the company achieved free‑cash‑flow positivity in the quarter, a year ahead of its original target.
The company’s GAAP earnings per share were $1.86, while the adjusted EPS was $0.46, beating the consensus estimate of $0.43. The adjusted EPS beat the analyst expectation of $0.4425, reflecting the impact of the tax benefit and strong operating performance.
Compared with the prior quarter, Q2 2025 net sales were $260 million, up 12 % sequentially. Net income in Q2 was $80 million, a 100 % sequential increase, and adjusted EBITDA was $48 million, up 13 % sequentially. These sequential gains underscore the company’s momentum.
Gross profit margin was 39.5 % of net sales, slightly lower than the 40.4 % margin reported a year earlier. The decline was attributed to reduced leverage on plant expenses, partially offset by lower input costs. The company’s plant utilization remained below full capacity, contributing to the margin compression.
Management revised 2025 guidance to a net sales growth of 13 %, the lower end of the prior 13‑16 % range, citing macro headwinds such as inflation and supply‑chain disruptions. Adjusted EBITDA guidance was narrowed to $190 million‑$195 million, down from the previous $190 million‑$210 million range. Capital expenditures for 2025 are now projected at $140 million, a reduction of $35 million from the prior estimate and a cut of at least $100 million for the 2025‑26 period.
CEO Billy Cyr highlighted that while macro headwinds persist, demand for Freshpet’s fresh, refrigerated pet food remains strong. The company is focusing on operational efficiency, margin expansion, and category‑leading growth to navigate the current economic environment.
Freshpet operates in the premium fresh pet‑food segment, a resilient part of the pet‑food industry. The company’s U.S. dog‑food market share rose to 3.9 %, reflecting its growing presence. Early free‑cash‑flow positivity demonstrates improved financial discipline and operational efficiency.
The $77.9 million valuation allowance release was a one‑time tax benefit that significantly boosted net income. Despite this, the company’s core operating performance remains robust, positioning it well for future category growth.
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