- Freshpet Inc FRPT reported fourth-quarter FY22 sales growth of 43.1% year-on-year, to $165.83 million, beating the consensus of $152.11 million.
- The company attributed the sales growth to pricing, velocity, distribution gains, and innovation.
- Gross profit increased 10.9% Y/Y to $45.7 million, with the margin contracting from 35.6% to 27.6%. The decrease in gross margin was primarily due to increased plant start-up cost, ingredient cost and labor inflation, and quality issues, partially offset by improved pricing.
- Selling, general and administrative expenses fell 2.2% to $47.8 million. The operating loss for the quarter narrowed to $$(2.06) million from $(7.6) million last year.
- The company held $132.7 million in cash and equivalents as of Dec. 31, 2022.
- Adjusted EBITDA was $18.8 million, or 11.3% as a percentage of net sales, versus $7.6 million, or 6.5% as a percentage of net sales, in the prior year period.
- EPS loss of $(0.06) beat the analyst consensus of $(0.09).
- “We had a very strong finish to 2022. Between record net sales growth, improved performance on quality and logistics, and a strong start-up of our Ennis Kitchen, we were able to exceed our guidance and build a strong foundation for 2023,” commented CEO Billy Cyr.
- Outlook: Freshpet sees FY23 sales of about $750 million (consensus $755.01 million), representing an increase of ~26% from 2022.
- The company expects FY23 adjusted EBITDA of at least $50 million versus $20.1 million in FY22 and $35.0 million in FY21.
- Price Action: FRPT shares are trading higher by 1.64% at $62.06 on the last check Monday.
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