Why Freshpet Stock Was Falling Today
Shares of Freshpet (NASDAQ: FRPT) were pulling back today after the fresh pet-food company missed earnings estimates significantly in its second-quarter earnings report as inflation ate into its margins. As a result, the stock was down 11.1% as of 10:28 a.m. ET.
Top-line performance remained strong for Freshpet with revenue up 34.4% to $146 million, though that was slightly below estimates of $147 million. However, gross margin fell from 39.7% in the quarter a year ago to 35.8%, due to rising costs for ingredients and labor, as well as quality issues. Selling, general, and administrative expenses rose from 45.6% of revenue to 48.2% of revenue, due to an increase in marketing spending.
Rising costs weighed on the bottom line. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell from $10.9 million to $3.9 million. Freshpet reported a GAAP loss per share of $0.45, down from a $0.17 loss in the quarter a year ago and much worse than expectations of a per-share loss of $0.14.
Source Fool.com
