Freshpet
stock jumped Monday after the maker of dog food provided a stronger-than-expected sales outlook for 2024 after swinging to a fourth-quarter profit.
Freshpet
said it expects 2024 revenue of $950 million, above Wall Street estimates of $944.9 million and an increase from $766.9 million in 2023.
The company reported fourth-quarter earnings of 31 cents a share, which beat analysts’ estimates of 7 cents a share and rose from a year-earlier loss of 6 cents. Sales for the quarter of $215.4 million were higher than the consensus call for $204.6 million and increased from last year’s $165.8 million.
“This marks another quarter where management has solidly executed the playbook with strong sales growth,” Benchmark analyst John Lawrence wrote Monday. He rates the stock as a Buy with a $100 price target.
The sales increase mostly was driven by volume gains,
Freshpet
said. The company also increased its media spending in the quarter.
“The significant investments we have made to create scale and extend our first-mover advantage have begun to generate improved profitability and significant operating cash flow,” Chief Executive Billy Cyr said in the earnings release.
Shares of Freshpet were rising 16% Monday to $106.50 and were on pace for their highest close since April 25, 2022, according to Dow Jones Market Data. The stock has gained 72% over the last 12 months. Meanwhile, online pet supplies retailer
Chewy
was up 2.9% and
Petco Health & Wellness
was down 0.8%.
After a strong showing from Freshpet, investors may have more reason for optimism on the animal welfare companies. Especially after both
Chewy
and Petco cut their financial forecasts for fiscal 2023 at the end of last year.
“The current economic environment means many consumers are increasingly discerning in their spending and actively seeking out more value,” Petco Chief Executive Ron Coughlin said on the company’s third-quarter earnings conference call on Nov. 29. That was a big shift from the pandemic pet adoption boom.
Both Chewy and Petco are scheduled to report their fourth-quarter earnings in March.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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