Freshpet met its sales growth goal last year after a number of downgrades but guided to a slower print in 2026.
The Nasdaq-listed pet-food maker had already flagged a “headwinds” backdrop when it revised down sales estimates and adjusted EBITDA guidance in November. However, Freshpet broke through the $1bn sales barrier last year for the first time and noted it bagged almost $100m from a six-year-old category investment.
“We learned that after more than a decade of strong, reliable, and predictable growth, the pet-food category and the Freshpet growth algorithm are not immune to swings in consumer sentiment,” CEO Billy Cyr said yesterday (23 February) as he discussed the annual results with analysts.
“Category growth last year slowed dramatically and our net sales growth rate dropped from 27% in fiscal year 2024 to 13% in fiscal year 2025.”
Freshpet downgraded its sales outlook last year a number of times. It cut the growth guidance to 13% in November from the 13-16% range provided in August. That in itself had been lowered from the 15-18% forecast given in May, which was also less optimistic than the original 21-24% estimate.
For fiscal 2026, New Jersey-based Freshpet expects 7-10% growth from last year's $1.10bn print.
Adjusted EBITDA grew 21% in 2025 to $195.7m, compared to the anticipated $190-$195m range. A number of cuts were also initiated last year in that forecast, which started out “at least” $210m.
The outlook for the new year was set at $205-215m.
“We believe this is a prudent place to start our guidance after a challenging year,” newly installed CFO John O’Connor said.
“This guidance for the year assumes that there is no material change in the macroeconomic environment compared to where we exited 2025. It does not include any significant fridge island expansion.”
Fridge islands are a new in-store concept for Freshpet, what CEO Cyr described as “a major new driver of growth and profitability”.
They are testing in a “major retailer” and have been expanded from 16 to 28 stores.
Despite last year’s challenges, Freshpet remains confident it can drive sales in dog food having removed the $1.8bn 2027 target for the group and pet-food category as a whole at the second-quarter stage in August.
Freshpet still expects to hit an adjusted gross margin goal of 48%.
Despite a “slowdown in volume growth”, the margin increased 20 basis points to 46.7% last year, Cyr said.
However, the adjusted EBITDA margin target of 22% in 2027 has been tweaked to 20-22%. It edged up to 17.8% in 2025 from 16.6% in the prior 12 months, when Freshpet reached the net profit milestone.
Net income surged to $139.1m last year from $46.9m.
“In regard to our fiscal year 2027 targets, we remain confident in our ability to deliver net sales growth well in excess of the US dog-food category growth and thus grow market share,” Cyr said yesterday.
“Depending on the macroeconomic conditions and the health of the dog-food category, that growth could be in the high single digits or low double digits.”
Cyr noted an investment Freshpet made in the dog-food category six years ago when the name of the target business was not identified.
He revealed the $33.4m investment was channelled into Ollie, a direct-to-consumer brand. Freshpet pocketed around $95.5m when it exited in January, the CEO said.
“We invested so that we could learn more about the DTC business and maintain some level of optionality if we wanted to enter that space,” Cyr explained.
“We learned quite a bit from that ownership position that is helping us develop our omnichannel approach to the Freshpet, Inc. business. And it was also a successful investment from a financial perspective.”
