Freshpet (FRPT) Stock Tanks on Disappointing Earnings, Analyst Downgrade

Freshpet (FRPT) stock is plummeting on Thursday after the maker of treats for dogs and cats reported third quarter 2015 financial results that came in under analysts' expectations.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Freshpet (FRPT) - Get Report  stock is plummeting 24.49% to $6.32 on Thursday after the maker of treats for dogs and cats on Wednesday reported third quarter 2015 financial results after the closing bell that came in under analysts' expectations. 

For the latest quarter ended September 30, the company reported a loss of 5 cents a share on sales of $30.6 million.

Analysts had expected the company to report a loss of 4 cents a share on revenue of $32.56 million. 

In the same period the year before, the company reported a loss of $1.19 cents a share on revenue of $22.5 million. 

During the recent quarter, the company said it experienced lower-than-expected Freshpet Fridge growth and that its gross margin was negatively impacted by manufacturing inefficiencies from new product innovation. 

Due to these headwinds, the company cut its full-year revenue outlook. It now predicts sales to be between the range of $115.5 million and $117 million, down from its prior outlook of $117 million to $119.5 million. 

"Going forward, we will further improve our manufacturing costs and processes, drive greater leverage across our business model and in turn, enhance long-term shareholder value," CEO Richard Thompson stated.

However, sales grew 35% year-over-year, helped by increased velocity across all channels, the company noted. 

Following these results, Credit Suisse this morning downgraded Freshpet to "neutral" from "outperform" and cut its price target to $9 from $19. 

Analysts added that "gross margin and EBITDA missed badly."

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