Shares of pet food company Freshpet Inc ( FRPT ) were trading lower in premarket on Monday after the first-quarter FY25 earnings.

The company reported a first-quarter revenue increase of 17.6% year over year to $263.25 million, beating the analyst consensus estimate of $260.12 million.

The increase in net sales was primarily driven by volume gains of 14.9% and favorable price/mix of 2.7%.

Gross profit increased 17.6% year over year to $103.8 million, with the margin consistent at 39.4% for both periods. The benefit from lower input costs and reduced quality costs was fully offset by reduced leverage on plant expenses.

Selling, general and administrative expenses rose 44.6% to $115.3 million. The company reported an operating loss of $(11.5) million for the quarter compared to an operating income of $8.5 million last year.

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Adjusted EBITDA was $35.5 million, compared to $30.6 million last year. EPS loss of $(0.26) missed the consensus estimate of $0.10.

As of March 31, 2025, the company held $243.7 million in cash and equivalents. The operating cash flow for the quarter was $4.8 million.

“Despite the recent macro-economic headwinds, we believe Freshpet ( FRPT ) remains a structurally advantaged business with a long runway for growth in a category with long-term tailwinds,” said CEO Billy Cyr. “However, our growth year-to-date has not been as robust as we had anticipated so we are adapting our growth plans to the current economic challenges that our consumers are facing while continuing to drive the operational improvements that are essential to our long-term success.”

Outlook: Freshpet ( FRPT ) lowered its FY25 sales outlook from $1.18 billion—$1.21 billion to $1.12 billion—$1.15 billion, compared to an estimate of $1.18 billion.

The company expects adjusted EBITDA of $190 million—$210 million, and FRPT expects capital expenditures of ~$225 million.

Price Action: FRPT shares traded lower by 2.83% at $74.20 in premarket at last check Monday.

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