Freshpet hits ‘breakout year’ as it nears $1 billion in net sales

New Jersey-based Freshpet posted strong Q4 and 2024 fiscal year earnings. Net sales for the quarter reached $262.7 million (€251.3M), a 22% year-on-year (YoY) increase.

Between October and December 2024, net income hit $18.1 million (€17.3M), an 18% YoY increase against the same quarter last year. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $52.6 million (€50.3M), an improvement on the prior financial year of $31.3 million (€29.9M).

2024’s net sales reached $975.2 million (€932.8M), an increase of 27.2% against 2023. Net income was positive for the first time in the company’s history, reaching $46.9 million (€44.9M), a significant improvement on 2023’s net loss of $33.6 million (€32.1M).

Growth

Gross margin for the year was 40.6%, up from 32.7% last year. Adjusted EBITDA was $161.8 million (€154.8M), a 143% increase on 2023’s $66.6 million (€63.7M).

The growth came largely from increased volume, which rose 27% in 2024. Selling, general and administrative (SG&A) costs remained flat at 36.7% for both 2023 and 2024.

“Fiscal year 2024 was a breakout year for Freshpet,” says CEO Billy Cyr. “We continued to deliver the exceptional net sales growth investors have come to expect from Freshpet but also delivered very strong profit improvements and even exceeded some of the fiscal year 2027 targets we set 2 years ago.”

Outlook

Citing Nielsen data on an earnings call, Cyr states the brand has just a 3.4% market share in the US and has room to grow.

However, refrigerated food is a relatively new and niche product, so consumer appetite may be limited. Most shoppers (96%) in the category of “gently cooked” fresh and frozen dog food already buy Freshpet, which also has many competitors for shoppers looking to buy the healthiest foods for their pets, including raw and frozen food.

Freshpet expects double-digit growth to continue in 2025. In a statement accompanying the 2024 earnings release, the firm anticipates net sales between $1.18 billion (€1.13B) and $1.21 billion (€1.16B), an increase of 21% to 24% from 2024. This guidance includes adjusted EBITDA of at least $210 million (€201M).

The company also updated its long-term guidance for the end of the 2027 financial year, increasing its anticipated gross margin to 48%, up from 45%. The expected net sales were unchanged, at $1.8 billion (€1.72B).