Freshpet Inc (FRPT)
Profitability ratios
Return on sales
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 40.09% | 39.95% | 37.50% | 35.66% | 34.28% | 32.12% | 30.95% | 29.98% | 30.64% | 31.45% | 33.51% | 35.83% | 36.74% | 38.11% | 38.43% | 39.54% | 40.17% | 41.69% | 44.21% | 45.07% |
| Operating profit margin | 1.79% | 3.92% | 3.65% | 1.70% | -0.03% | -3.96% | -6.44% | -8.24% | -8.94% | -8.53% | -10.55% | -8.47% | -6.64% | -5.80% | -5.11% | -4.19% | -2.58% | -0.63% | 1.99% | 2.05% |
| Pretax margin | 1.61% | 4.87% | 4.77% | 2.88% | 1.32% | -4.11% | -6.80% | -8.86% | -9.99% | -9.32% | -11.32% | -9.13% | -7.13% | -6.47% | -5.72% | -4.71% | -2.98% | -0.98% | 1.63% | 1.57% |
| Net profit margin | 1.54% | 4.81% | 4.75% | 2.86% | 1.19% | -4.26% | -6.98% | -9.04% | -10.04% | -9.37% | -11.53% | -9.46% | -7.55% | -6.98% | -6.02% | -4.89% | -3.07% | -1.00% | 1.58% | 1.52% |
The profitability ratios for Freshpet Inc. over the analyzed period reveal a historic pattern of declining margins followed by notable recent improvements.
Gross Profit Margin:
From June 30, 2020, through September 30, 2023, the gross profit margin exhibited a consistent downward trend, decreasing from 45.07% to approximately 30.95%. This downward trend indicates increasing cost of goods sold (COGS) or pricing pressures that have eroded the company's gross margins over this period. However, starting in December 2023, the gross margin began to rise, reaching 32.12%, and continued an upward trajectory through March 2025, ultimately reaching approximately 40.09%. This turnaround suggests that Freshpet has successfully implemented strategies to improve gross profitability, possibly through cost reductions or higher-margin product offerings.
Operating Profit Margin:
The operating profit margin appears significantly impacted by ongoing operational challenges, with negative margins persisting from June 30, 2020, through September 30, 2023. During this timeframe, the operating margin moved from marginal positive figures to as low as -10.55%, indicating operational inefficiencies or high operating expenses relative to revenues. Nonetheless, recent data signals an improvement: the margin progressed from its nadir toward positive territory, reaching 1.79% as of March 31, 2025. This suggests that Freshpet is beginning to achieve operational efficiencies, turning around its earlier losses into modest profits.
Pretax Profit Margin:
The pretax margin followed a similar trajectory, remaining negative for a prolonged period, reflecting challenges at the pre-tax profitability level. It reached as low as -11.32% in September 2022. However, recent data indicates a recovery trajectory, with pretax margins turning positive in the latest periods, reaching approximately 1.61% by March 31, 2025. This improvement aligns with the enhancements observed in operating performance and gross profit margins.
Net Profit Margin:
The net profit margin was negative throughout most of the observed timeline, falling to -11.53% in September 2022. Yet, it demonstrated a positive trend commencing in December 2023, with margins turning positive again at 1.19%. By March 31, 2025, net margin increased to approximately 1.54%, reflecting recent profitability achievements at the net income level. The transition from consistent losses to modest profits signifies a pivotal turnaround, driven likely by improvements across gross, operating, and pretax margins.
Summary:
Overall, Freshpet Inc.'s profitability ratios initially demonstrated sustained deterioration, with margins declining significantly from mid-2020 through 2023. In recent periods, there is evidence of a tangible recovery, with all key margins turning positive or trending upward, indicating improved operational efficiency, cost management, and profitability enhancements. The recent upward trend in gross, operating, pretax, and net margins suggests a positive shift in the company's profitability trajectory, although margins remain relatively modest, highlighting ongoing challenges and opportunities for continued margin expansion.
Return on investment
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.17% | 2.43% | 2.21% | 0.99% | -0.02% | -2.07% | -3.20% | -3.90% | -4.03% | -4.51% | -4.94% | -3.62% | -3.61% | -3.14% | -2.65% | -1.98% | -1.14% | -0.46% | 1.40% | 1.40% |
| Return on assets (ROA) | 1.00% | 2.98% | 2.88% | 1.66% | 0.66% | -2.23% | -3.47% | -4.28% | -4.52% | -4.95% | -5.39% | -4.04% | -4.11% | -3.79% | -3.13% | -2.31% | -1.35% | -0.73% | 1.11% | 1.04% |
| Return on total capital | 2.04% | 4.36% | 4.90% | 3.24% | 2.18% | -0.82% | -2.87% | -4.23% | -4.79% | -3.96% | -5.60% | -4.15% | -4.36% | -3.42% | -2.78% | -1.90% | -0.74% | 0.39% | 2.44% | 1.97% |
| Return on equity (ROE) | 1.49% | 4.45% | 4.32% | 2.51% | 1.00% | -3.42% | -5.34% | -6.44% | -6.67% | -5.41% | -6.10% | -4.59% | -4.95% | -4.13% | -3.28% | -2.52% | -1.45% | -0.81% | 1.20% | 1.11% |
The profitability ratios of Freshpet Inc. demonstrate a notable transition from negative to positive figures over the analyzed period, indicating an improving ability to generate earnings relative to assets, capital, and equity.
Operating Return on Assets (Operating ROA):
Initially, during mid-2020, the Operating ROA was positive at 1.40%, but it declined sharply into negative territory by the end of 2020, reaching -0.46%, and continued to deteriorate through 2021 and 2022, with the lowest point of -4.94% in September 2022. This persistent negative trend suggests operational challenges impacting the company's core profitability. However, starting in 2023, there was a consistent upward trajectory, culminating in positive territory at 2.43% by the end of 2024, and further improving to 1.17% as of March 2025. This recovery indicates an enhancement in operational efficiency and profitability.
Return on Assets (ROA):
Similar to Operating ROA, the company's ROA was marginally positive at 1.04% in June 2020 but dipped into losses thereafter, reaching a low of -5.39% in September 2022. The ongoing negative figures reflect decreased overall asset efficiency in generating net income. Nonetheless, from early 2024 onward, ROA shifted into positive values, achieving 2.98% by the end of 2024, and slightly decreasing to around 1.00% in March 2025, signifying improvements in net profitability.
Return on Total Capital:
This ratio followed a similar pattern, beginning at 1.97% in mid-2020 and declining into negative territory, bottoming at -5.60% in September 2022. Starting in 2023, the company experienced a notable turnaround, with ratios increasing to 4.36% by the end of 2024 and maintaining a positive trend through early 2025. The upward movement underscores better utilization of both debt and equity financing to generate earnings.
Return on Equity (ROE):
Initially modest at around 1.11% in June 2020, the ROE declined further and remained negative throughout most of 2021 and 2022, with lows of -6.67% in March 2023. However, a distinct upward trend began in 2024, reaching 4.45% by the end of that year and maintaining positive figures into early 2025. The positive ROE values in recent periods suggest an improved ability to generate shareholder returns, aligned with the recovery in overall profitability.
Overall Analysis:
Freshpet’s profitability ratios exhibit a transition from significant losses to more sustainable profit levels. The period from 2020 through 2022 was characterized by consistent negative margins across all profitability ratios, reflecting operational and possibly strategic challenges. Starting in 2023, there is clear evidence of improvement, with ratios turning positive and trending upward into 2024 and early 2025. This recovery may be attributable to operational enhancements, new product strategies, or market expansion efforts. Nevertheless, the company’s profitability remains sensitive to various factors, and continued positive performance will be essential to sustain and strengthen these gains.