Freshpet Raises 2026 Sales Outlook After Margin Expansion

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter net sales were $317.8 million, up 10.0%, as Adjusted Gross Margin reached 50.0% and the company lifted full-year sales growth to 12%–13%.

Freshpet, Inc. (FRPT), the refrigerated pet-food maker, reported third-quarter net sales of $317.8 million, up 10.0% from a year earlier, and raised its full-year 2026 sales-growth outlook to 12% to 13% from 10% to 12%.

Growth slowed from 15.5% in the second quarter and 13.1% in the first. Volume gains were 10.0% in the third quarter, down from 15.7% in the second and 14.6% in the first.

The company said the sales increase was primarily driven by volume. Chief Executive Officer Billy Cyr said the quarter showed “the strength and durability of the Freshpet business model” in a “challenging consumer and intense competitive environment,” and that the company continued to grow market share.

Gross profit was $141.3 million, or 44.5% of net sales, compared with $114.2 million, or 39.5%, a year earlier. The company attributed the margin expansion primarily to improved leverage on plant expenses, reduced quality costs and lower input costs. Adjusted Gross Profit was $158.8 million, or 50.0% of net sales, compared with $132.8 million, or 46.0%, a year earlier. Freshpet called 50.0% its strongest Adjusted Gross Margin in more than seven years.

Adjusted Gross Margin had been 48.6% in the second quarter and 46.9% in the first. Gross margin had been 42.1% in the second quarter and 40.5% in the first.

Adjusted EBITDA was $64.5 million, or 20.3% of net sales, compared with $54.6 million, or 18.9%, a year earlier. The company said the increase resulted from higher Adjusted Gross Profit, partially offset by higher Adjusted SG&A. Adjusted EBITDA had been $52.2 million in the second quarter and $37.9 million in the first.

Selling, general and administrative expenses were $106.2 million, or 33.4% of net sales, compared with $89.3 million, or 30.9%, a year earlier. The company said SG&A as a percentage of sales increased primarily due to higher logistics costs and a variable compensation accrual, partially offset by lower media spend as a percentage of sales. Adjusted SG&A was $94.2 million, or 29.6% of net sales, compared with $78.2 million, or 27.1%, a year earlier.

Net income was $29.7 million, or $0.58 a share on a diluted basis, compared with $101.7 million, or $1.86 a share, a year earlier. The year-ago period included a discrete $77.9 million tax benefit from the release of the majority of a valuation allowance. The company said the decrease was due to that tax benefit, compared with income tax expense in the current year, and increases in SG&A, partially offset by contributions from higher sales.

For the nine months ended September 30, 2026, net sales were $921.1 million, up 12.8%, driven primarily by volume gains of 13.3%, partially offset by unfavorable price/mix of 0.5%. Adjusted EBITDA for the nine months was $154.6 million. Cash from operations was $145.5 million. Free Cash Flow was $65.3 million. Cash and cash equivalents were $345.9 million as of September 30, 2026, with $399.0 million of debt outstanding, net of $3.5 million of unamortized debt issuance costs. Cash increased $67.9 million from December 31, 2025, primarily from $100.0 million of proceeds from the sale of an equity investment and $65.3 million of Free Cash Flow, partially offset by $102.3 million of share repurchases.

For full year 2026, Freshpet now expects Adjusted EBITDA of $215 million to $220 million, compared with $210 million to $220 million in previous guidance, and positive Free Cash Flow with capital expenditures of $125 million to $150 million, compared with about $150 million previously.

The company is reiterating its long-term 2027 guidance: net sales well in excess of the category growth rate, Adjusted Gross Margin of at least 49%, and Adjusted EBITDA margin in the range of 20% to 22%.