Freshpet reported third quarter 2026 financial results that exceeded analyst expectations for both revenue and earnings. Net sales growth was driven entirely by a 10% increase in volume, defying earlier projections of a significant slowdown. The company achieved a milestone Adjusted Gross Margin of 50.0%, its highest in over seven years, benefiting from improved plant leverage and reduced quality costs. Management raised its full-year 2026 revenue growth guidance and improved its free cash flow outlook by reducing planned capital expenditures.
Key Highlights
- Adjusted Gross Margin expanded 400 basis points year-over-year to 50.0%, driven by operational efficiencies and lower input costs.
- High-value consumer loyalty strengthened, with "Most Valuable Pet Parents" (MVPs) rising 8% to 2.6 million households and now representing 72% of total sales.
- E-commerce sales surged 35% year-over-year, now accounting for 16.9% of total revenue as retail fridges increasingly act as micro-fulfillment centers.
- Full-year 2026 net sales growth guidance was raised to a range of 12% to 13% from the previous 10% to 12%.
- Capital expenditure guidance for 2026 was lowered to $125M-$150M from ~$150M as manufacturing efficiencies unlocked $100M in incremental capacity.