Freshpet Reports 17.6% Increase in Net Sales but Faces $12.7 Million Net Loss in Q1 2025

Freshpet, Inc. reported a significant increase in net sales for the first quarter of 2025, reaching $263.2 million, a 17.6% rise from $223.8 million in the same period last year. This growth was primarily driven by a 14.9% increase in sales volume and a favorable price/mix effect of 2.7%. The company's gross profit also improved, totaling $103.8 million, maintaining a gross margin of 39.4%. However, Freshpet experienced a net loss of $12.7 million, a stark contrast to the net income of $18.6 million reported in the prior year, largely due to increased selling, general, and administrative (SG&A) expenses, which rose to $115.3 million from $79.7 million.

The company's operational metrics showed a decline in profitability, with a loss from operations of $11.5 million compared to an income of $8.5 million in the previous year. The increase in SG&A expenses was attributed to higher media spending, share-based compensation, and non-recurring charges related to an accounts receivable write-off from a distributor liquidation. Freshpet's total assets decreased slightly to $1.56 billion from $1.57 billion at the end of 2024, while total liabilities also saw a reduction to $509.5 million from $519.5 million.

Freshpet's strategic initiatives included the continued rollout of its Freshpet Fridges, which are now installed in approximately 28,521 retail locations across North America and parts of Europe. The company is focused on expanding its market presence and enhancing product adoption rates. As of March 31, 2025, Freshpet had 48,777,091 shares of common stock outstanding, reflecting a slight increase in share count due to stock option exercises and vesting of restricted stock units.

Looking ahead, Freshpet plans to invest significantly in its manufacturing capabilities, particularly in the expansion of its Freshpet Kitchens. The company anticipates spending an additional $223.5 million in capital expenditures throughout the remainder of 2025. Freshpet's management remains optimistic about future growth, citing ongoing consumer trends favoring fresh pet food and the company's unique business model as key drivers for continued expansion. However, they also acknowledge potential risks, including economic conditions, supply chain disruptions, and the impact of inflation on input costs, which could affect profitability and operational performance.