11:29 AM EDT, 09/08/2025 (MT Newswires) -- Freshpet's ( FRPT ) margins remained strong even as sales trends continue to weaken, with velocity falling, household penetration flat, and no material benefit yet from club channel distribution, UBS Securities said in a note Monday.

The brokerage flagged the continued weakness in the broader dog food market, which has been declining for over a year with stagnant household penetration and buy rates.

UBS cautioned that competitive pressures are likely to increase as General Mills rolls out a fresh dog food line in roughly 5,000 coolers by November, on top of existing rivalry from Farmer's Dog and other direct-to-consumer brands.

The firm projects Freshpet ( FRPT ) sales growth of 11% in fiscal 2026 and 9% in fiscal 2027, which it said is 2% and 5% below consensus estimates, respectively.

The brokerage also cautioned that management's long-term margin goals, which assume 15% annual growth, may be difficult to achieve as it now forecasts a compound annual growth rate of just under 10% despite stronger-than-expected profitability to date.

UBS maintained its sell rating on the stock and lowered its price target to $48 from $65.

Shares of the company were down 1.5% in recent trading.

Price: 54.45, Change: -0.82, Percent Change: -1.48