SECAUCUS, N.J. — Fresh dog food company Freshpet reported another strong quarter Feb. 26, showing significant increases in net sales, household penetration and e-commerce. The company’s full year 2018 earnings also demonstrated the company is on track to meet its goal of $300 million in net sales by 2020.

Billy Cyr, CEO of Freshpet, said the company earned $51.6 million in net sales, a 29.7% year-over-year increase, in the fourth quarter of 2018. Household penetration increased 17% overall, and the company’s core dog business, which includes dog food rolls, roasted meals and Fresh From the Kitchen main meal items, drove a 31% year-over-year increase in household penetration.

Freshpet’s e-commerce business grew by 89%, according to Cyr, and now accounts for 1.7% of the overall business. More than 80% of e-commerce sales utilized the company’s in-store fridge infrastructure, up 10% from Freshpet’s third quarter results. Additionally, the buying rate broke $100 for the first time for the company in the fourth quarter 2018.

As for its full-year 2018 earnings, increased operational capacity, innovations, marketing investments and distribution gains drove a net sales growth of 26.8% from full-year 2017, totaling $193.2 million and exceeding its previous end-of-2018 guidance by $3.2 million. The company implemented a seven-day manufacturing schedule, increased its retail presence to 19,499 stores and upgraded 805 of its company-owned, in-store refrigerators during 2018.

“In summary, we believe that 2018 was a very successful year and puts us on track to deliver the 2020 goals we laid out as part of our Feed the Growth plan two years ago,” Cyr concluded.

Looking forward, Freshpet plans to “dig deeper” and sustain growth through five key strategies: expand the consumer franchise; strengthen retail presence; strengthen gross margin and adjusted EBITDA margin; continue measured development in Canada and the United Kingdom; and support accelerated, longer-term capacity expansion.

Freshpet Homestyle Creations, Custom Dog MealsJust days before presenting its fourth quarter and full-year earnings, Freshpet released its new Homestyle Creations, a line of USDA-certified chicken and beef patties and Healthy Mixers for dogs that can be mixed-and-matched by pet owners to create custom meals. The new product will be available in select Target and Meijer stores across the US. So far, there are three variations of Healthy Mixers, including cranberries, carrots and green beans; bananas, cranberries and blueberries; and brown rice, pumpkin, carrots and green beans.

"Food is a key way for us to bond with our pets and with Homestyle Creations we've taken that a step further giving pet parents the ability to build a customized meal, but in a simple and convenient way. It will change the way pet parents feed their pets to ensure top quality while not missing out on any nutrition,” said Jake Trainor, director of marketing for Freshpet.

The company also rolled out a multi-protein roll, formulated with chicken, beef and salmon, as part of its innovations to drive its consumer franchise.

Cyr also said the company plans to set aside at least 11% of sales, equal to about $27 million, to invest in advertising campaigns in the US, as well as a $2 million incremental investment in advertising for the Canadian and United Kingdom markets.

Freshpet expects to add between 1,500 and 1,600 new retail locations, upgrade 500 stores to larger fridges and add a second fridge in 800 stores in 2019. Finally, Cyr said the company hopes to break ground on its Kitchen 2.0 project in the next couple of months and reassured investors the kitchens are on track to be operational in the second-half of 2020. These two efforts will support Freshpet’s strategy to expand its capacity over the next year.

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