Freshpet Inc (FRPT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 40.60% | 32.71% | 31.25% | 38.11% | 41.69% |
| Operating profit margin | 3.90% | -3.97% | -8.73% | -5.79% | -0.60% |
| Pretax margin | 4.87% | -4.11% | -9.32% | -6.47% | -0.98% |
| Net profit margin | 4.81% | -4.38% | -9.37% | -6.51% | -1.00% |
The profitability ratios for Freshpet Inc. from December 31, 2020, to December 31, 2024, reveal significant fluctuations indicative of a period of transition towards improved financial performance.
The gross profit margin demonstrates variability over this period. Starting at 41.69% in 2020, it declined markedly to 38.11% in 2021 and further to 31.25% in 2022, reflecting increased cost pressures or changes in sales mix. However, there is an upward correction thereafter, with the margin rising to 32.71% in 2023 followed by a notable increase to 40.60% in 2024, suggesting improvements in cost management or pricing strategies.
Operating profit margins, which incorporate operating expenses, were negative throughout most of the period, indicating operational losses. The margin deteriorated from -0.60% in 2020 to -8.73% in 2022, reflecting increased operating costs or challenges in scaling profitability. Nonetheless, a positive shift is observed in 2024 where the operating margin turns to 3.90%, signaling operational efficiency gains or revenue growth that outweighs operating expenses.
Pretax margins follow a similar pattern, remaining negative for the majority of the period, declining from -0.98% in 2020 to -9.32% in 2022, before improving to 4.87% in 2024. The net profit margin aligns closely, starting at -1.00% in 2020, reaching a low of -9.37% in 2022, and then reversing course to attain 4.81% in 2024. This trend indicates a significant turnaround in profitability performance over the period, culminating in positive net margins in 2024.
Overall, the financial ratios suggest that Freshpet Inc. experienced a challenging period with operational losses and shrinking margins during 2020–2022, followed by a strategic or operational recovery culminating in profitability in 2024. The recent improvements imply enhanced efficiency, margin management, and potentially favorable market conditions or operational restructuring.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.41% | -2.08% | -4.62% | -3.14% | -0.44% |
| Return on assets (ROA) | 2.98% | -2.30% | -4.96% | -3.53% | -0.73% |
| Return on total capital | 5.66% | -1.83% | -4.87% | -3.42% | -0.48% |
| Return on equity (ROE) | 4.45% | -3.53% | -5.41% | -3.85% | -0.81% |
The profitability ratios of Freshpet Inc. over the period from December 2020 to December 2024 exhibit notable changes, indicating a progressive shift in the company's financial performance.
The Operating Return on Assets (Operating ROA) demonstrates a significant decline from -0.44% in 2020 to -4.62% in 2022, reflecting worsening efficiency in generating operating income from its assets during that period. However, there is a marked improvement in 2023, with this ratio rising to -2.08%, and a positive turnaround in 2024 to 2.41%, signaling a return to profitability at the operational level.
Similarly, the Return on Assets (ROA) shows a consistent negative trend, declining from -0.73% in 2020 to -4.96% in 2022, emphasizing the company's challenges in generating net income relative to its asset base during that timeframe. The improvement in 2023, with ROA reaching -2.30%, coupled with a positive leap to 2.98% in 2024, indicates a substantial recovery and enhancement in overall asset profitability.
The Return on Total Capital mirrors these patterns, declining from -0.48% in 2020 to -4.87% in 2022, before improving marginally in 2023 to -1.83%, and ultimately turning positive at 5.66% in 2024. This shift suggests that the company's efficiency in generating returns from both equity and debt capital has significantly improved, especially in the latest year.
Return on Equity (ROE) follows a similar trajectory, declining from -0.81% in 2020 to -5.41% in 2022, indicating underwhelming shareholder returns during that period. The subsequent years show improvement, with the ratio reaching -3.53% in 2023 and transforming into a positive 4.45% in 2024, reflecting enhanced profitability attributable to shareholders.
Overall, the data indicates that Freshpet Inc. experienced a period of contraction and losses through 2022, followed by a notable recovery starting in 2023, culminating in positive profitability ratios in 2024. This trend suggests improvements in operational efficiency, asset utilization, and overall financial performance in recent periods.