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Freshpet reported third-quarter fiscal 2026 net sales of $317.8 million, up 10% year over year, as sales volumes rose by the same rate. Gross margin improved, and the company raised its full-year sales growth forecast to 12%–13%, though net income fell sharply from the prior-year quarter.
Freshpet reported third-quarter net sales of $317.8 million, a 10% year-over-year increase driven by higher sales volume, and raised its full-year 2026 sales growth forecast. The pet food company also reported improved gross margins, while quarterly net income fell 71% from the year-earlier period.
For the quarter ended September 30, 2026, Freshpet’s gross profit increased 24% year over year to $141.3 million. Gross profit was 44.5% of net sales, compared with 39.5% a year earlier. Adjusted gross margin rose to 50%, from 46%. The company attributed the improvement to better leverage on plant expenses, reduced quality costs and lower input costs.
Net income was $29.7 million, down from $101.7 million in the prior-year quarter. The supplied report gives the decline but does not explain its causes, so the margin improvement and sales growth should not be read as evidence that quarterly earnings increased. Freshpet said e-commerce sales rose 35% year over year and made up 16.9% of its business; about 82% of digital order volume was fulfilled through its retail fridge network, omnichannel retail or last-mile delivery services.
Freshpet raised its 2026 net sales growth outlook to 12%–13%, from its previous range of 10%–12%. It now expects adjusted EBITDA of $215 million to $220 million, compared with its prior range of $210 million to $220 million. These are company forecasts, not completed results.
Higher Sales, With Earnings Still Down
The results show a split in Freshpet’s performance: volume growth and stronger gross margins supported a higher sales outlook, but the quarter’s net income was substantially lower than a year earlier. The raised forecast signals that management expects sales momentum to continue through the year, while the EBITDA range reflects the company’s current expectations for operating performance.
Freshpet’s outlook also comes with a cost caveat. CFO John O’Connor said the cost environment had become more challenging than it was a few months earlier. The company expects to land in the lower half of its adjusted EBITDA margin target range if inflation does not improve significantly. That makes the sales forecast only part of the picture for investors tracking profitability.
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Nine-Month Growth and Customer Mix
Across the first nine months of fiscal 2026, Freshpet recorded $921.1 million in net sales, up 12.8% year over year. Volume rose 13.3%, partly offset by an unfavorable 0.5% price-and-mix impact. Gross profit reached $390.7 million, or 42.4% of sales, compared with 39.9% in the same period last year. Nine-month net income declined 7.2% to $97.7 million.
The report also describes a concentrated customer base. Freshpet’s highest-value segment, called Most Valuable Pet Parents, increased household penetration by 8% in the 12 months to September 27, 2026. These households represented 17% of Freshpet households and accounted for 72% of sales. The company reported an average annual buy rate of $522 for those households, compared with $41 for non-MVP households.
As of September 30, Freshpet had 40,523 retail fridges across 31,164 stores in the United States and Canada. About three-quarters of the stores had one fridge, while the remainder had more than one. The company’s longer-term fiscal 2027 targets remain net sales growth well above the category rate, adjusted gross margin of at least 49%, and adjusted EBITDA margin of 20%–22%.
“The third quarter results “demonstrate the strength and durability” of the Freshpet business model.”
— Freshpet CEO Billy Cyr, speaking to investors
Inflation and Profit Drivers Remain Open
The supplied report does not detail why third-quarter net income fell 71% despite higher sales and gross profit, nor does it provide a breakdown of the factors behind the year-over-year earnings comparison. The extent and timing of any further cost increases are also unclear.
Freshpet said that without a significant improvement in inflation, it expects adjusted EBITDA margin to fall in the lower half of its target range. The report does not quantify the inflation improvement needed or specify which costs are expected to have the greatest effect. The full-year sales and EBITDA figures remain guidance, and actual results may differ.
Full-Year Results Will Test Guidance
Freshpet’s next key measure will be whether sales growth holds through the rest of fiscal 2026 and whether its margins support the revised outlook. The company’s current forecast calls for 12%–13% sales growth and adjusted EBITDA of $215 million to $220 million for the year.
Investors will also be watching the company’s comments on inflation, operating costs and adjusted EBITDA margins, alongside quarterly sales and earnings. Freshpet has confirmed its fiscal 2027 targets, but the supplied report does not give a timetable for further updates or identify a specific date for its next results announcement.
Key Questions
What drove Freshpet’s third-quarter sales growth?
Freshpet said net sales increased 10% to $317.8 million and that the increase was driven by a 10% rise in sales volume.
Why did Freshpet raise its 2026 sales forecast?
After reporting higher third-quarter sales and volume, the company raised its expected full-year net sales growth to 12%–13%, from 10%–12%. The report does not provide a more detailed forecast rationale.
Did Freshpet’s earnings rise in the quarter?
No. Freshpet reported third-quarter net income of $29.7 million, down 71% from $101.7 million a year earlier, even as sales and gross profit increased.
What risk did Freshpet identify for its outlook?
CFO John O’Connor said the cost environment had become more challenging. Freshpet expects to finish in the lower half of its adjusted EBITDA margin target range if inflation does not improve significantly.
Source: globalpetindustry.com
