Freshpet, reported financial results for its second quarter and six months ended June 30, 2025. According to Petfood Industry’s Top Companies Database, Freshpet is a U.S.-based manufacturer of fresh, refrigerated dog treats and food for dogs and cats. In 2024, the company had an annual revenue of $975.2 million.
Second Quarter 2025 Financial Highlights Compared to Prior Year Period
- Net sales of $264.7 million, an increase of 12.5%.
- Net income of $16.4 million, compared to the prior year period net loss of $1.7 million.
- Gross margin of 40.9%, compared to the prior year period of 39.9%.
- Adjusted Gross Margin of 46.9%, compared to the prior year period of 45.9%.
- Adjusted EBITDA of $44.4 million, compared to the prior year period of $35.1 million.
"Against a more challenging consumer sentiment backdrop, we continue to significantly outperform the dog food category - delivering both category leading sales growth and strong improvements in operations," Billy Cyr, Freshpet’s chief executive officer, said in a press release. “As a nimble growth company that is adapting to an economically constrained consumer, we are intensely focused on what we can control. That includes accelerating our advertising and distribution programs, reducing our capital expenditures, and strengthening our operations. On the other hand, we will be pragmatic about what we can't control, so we are revising our current year's net sales target and removing our long-term net sales target to match the environment we are facing today. We still believe we will deliver outsized growth for a long period of time, but we need to plan for the current economic realities. In total, we believe the actions we are taking position us well to create significant shareholder value and fulfill our mission to elevate the way we feed our pets with fresh food that nourishes all."
Freshpet’s performance in the second quarter of 2025
Net sales increased 12.5% to $264.7 million for the second quarter of 2025 compared to $235.3 million in the prior year period. The increase in net sales was primarily driven by volume gains of 10.8% and favorable price/mix of 1.7%.
Gross profit was $108.2 million, or 40.9% as a percentage of net sales, for the second quarter of 2025, compared to $94.0 million, or 39.9% as a percentage of net sales, in the prior year period. The increase in reported gross profit as a percentage of net sales was primarily due to lower input costs and reduced quality costs, partially offset by reduced leverage on plant expenses. For the second quarter of 2025, Adjusted Gross Profit was $124.0 million, or 46.9% as a percentage of net sales, compared to $108.0 million, or 45.9% as a percentage of net sales, in the prior year period.
Selling, general and administrative expenses (“SG&A”) were $90.4 million for the second quarter of 2025 compared to $95.7 million in the prior year period. SG&A as a percentage of net sales decreased by 660 basis points to 34.1% for the second quarter of 2025 compared to 40.7% in the prior year period, primarily due to decreased share-based compensation and variable compensation accrual, partially offset by increased media spend as a percentage of net sales. Adjusted SG&A for the second quarter of 2025 was $79.6 million, or 30.1% as a percentage of net sales, compared to $72.9 million, or 31.0% as a percentage of net sales, in the prior year period.
Net income was $16.4 million for the second quarter of 2025 compared to net loss of $1.7 million in the prior year period. The increase in net income was due to contribution from higher sales, improved gross profit as a percentage of net sales and decreased SG&A expenses.
Adjusted EBITDA was $44.4 million for the second quarter of 2025 compared to $35.1 million in the prior year period.1 The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A.
Freshpet’s performance in the first six months of 2025
Net sales increased 15.0% to $527.9 million for the first six months of 2025 compared to $459.1 million in the prior year period. The increase in net sales was primarily driven by volume gains of 12.8% and favorable price/mix of 2.2%.
Gross profit was $212.0 million, or 40.2% as a percentage of net sales, for the first six months of 2025, compared to $182.1 million, or 39.7% as a percentage of net sales, in the prior year period. The increase in reported gross profit as a percentage of net sales was primarily due to lower input costs and reduced quality costs, partially offset by reduced leverage on plant expenses. For the first six months of 2025, Adjusted Gross Profit was $244.3 million, or 46.3% as a percentage of net sales, compared to $209.5 million, or 45.6% as a percentage of net sales, in the prior year period.
SG&A were $205.7 million for the first six months of 2025 compared to $175.4 million in the prior year period. SG&A as a percentage of net sales increased by 80 basis points to 39.0% for the first six months of 2025 compared to 38.2% in the prior year period, primarily due to increased media spend as a percentage of net sales and higher non-recurring charges in the first quarter of 2025, partially offset by decreased share-based compensation and variable compensation accrual. Adjusted SG&A for the first six months of 2025 was $164.3 million, or 31.1% as a percentage of net sales, compared to $143.8 million, or 31.3% as a percentage of net sales, in the prior year period.
Net income was $3.7 million for the first six months of 2025 compared to net income of $16.9 million in the prior year period. The decrease in net income was due to increased SG&A expenses, including increased media spend of $18.8 million and $16.9 million of non-recurring charges in the first quarter of 2025 compared to a $9.9 million gain on equity investment in the prior year period, which were partially offset by contributions from higher sales and improved gross profit as a percentage of net sales.
Adjusted EBITDA was $79.9 million for the first six months of 2025 compared to $65.7 million in the prior year period. The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A.
Freshpet’s balance sheet and outlook
As of June 30, 2025, the Company had cash and cash equivalents of $243.7 million with $396.2 million of debt outstanding, net of $6.3 million of unamortized debt issuance costs. For the six months ended June 30, 2025, cash from operations was $38.7 million, a decrease of $9.1 million compared to the prior year period driven largely by the higher variable incentive compensation payment in the first quarter of 2025.
For full year 2025, the Company is updating its guidance and now expects the following:
- Net sales increase of 13% to 16% from 2024, compared to an increase of 15% to 18% in the previous guidance;
- Adjusted EBITDA in the range of $190 million to $210 million, unchanged; and
- Capital expenditures of ~$175 million, compared to ~$225 million in the previous guidance.
The Company is also updating its long-term guidance. For full year 2027, the Company is removing the $1.8 billion net sales target to adjust for the recent slower growth; however, the Company expects to continue to deliver growth significantly in excess of the dog food category. The Company is reiterating its Adjusted Gross Margin target of 48% and Adjusted EBITDA Margin target of 22% for full year 2027.
Adapted from a press release
