FRPT - Earnings call transcript Q2 2018

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Operator

Greetings and welcome to the Freshpet, Inc., Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Katie Turner for opening remarks.

Katie Turner

you. Thank welcome quarter and call earnings Freshpet's webcast. and to afternoon, XXXX second conference Good are Chief Billy Dick call today's On Cyr, Financial Kassar, Executive Officer. Chief and Officer; also Scott available Officer, Chief will Morris, for Operating Q&A. be

actual management to securities risks remember expectations please on results and management's today. forward-looking XX-K Exchange those cause from to materially the the this statements. press statements begin, a that we and statements those could made Please the described implied results refer or the expressed may the are cause actual that of and forward-looking with Company's release federal any Before make of current and involve to Quarterly uncertainties These from course Securities differ that discussion beliefs during forward-looking these differ Report today of statements and for risks call, detailed Form materially laws. the issued in Company's meaning on within filed the Commission, based could in

please others. Finally, as EBITDA today's adjusted refer will and EBITDA measures management among non-GAAP call, financial to such that note, on

most While presentation the as is the this of Please refer information these release a measures Company non-GAAP intended press provide isolation in for comparable not the of in be prepared presented reconciliation to the considered information accordance accordance a for investors, with measures substitute financial with GAAP. useful or measures information believes for in the GAAP. financial non-GAAP to to today's financial

Billy Chief like I Executive turn to Officer. to would Cyr, the over call Now

Billy Cyr

And guidance highlights results on an good and To and provide greater financial overview financial detail our will then our and I will everyone. provide Thank Katie, updated XXXX. afternoon, Dick you, recent for business performance. our of begin,

that accelerate with pets providing I and to all Recall, QX with results. Plan doing significant rate natural pleased pet In relationships us to and their for expect good with mission to Feed committed we're that our will the answer to in of of value enrich planet. so that more Scott for our pets, of very fulfill lives is deliver pursuit are enabling Dick, the their we foods mission, our be and designed our Growth Freshpet's to growth, questions. their shareholders. ways our people to We're your parents. available Finally, And for fresh

We will leverage pets. manufacturing increased financial increasing investment we increased can returns further in a scale to increased to cycle, use we use long-term this accomplish capacity. and efficiency, can by enabling creating our advertising that produce and and will serve where drives that drive better to greater drive us more This organizational virtuous distribution, utilization profitability, growth

to is to in XX%-plus revenue a in an is of goal to financial growth Our delivering EBITDA key deliver $XXX those with soon goals One rate as margin. accelerating XXXX. adjusted million as deliver XXXX

Our deliver accelerated results rate are we that growth target. second our towards quarter confirm in this we on longer-term are track and to progressing XXXX

acceleration versus than product quarter was consumption in XX% in in up us quarter. growth in investment Fresh up was classes was XX.X% XX%, trade have with last year-ago year's an XX%. up than specialty including of the growth which growth up more and to was our The broad-based more Grocery an QX's business fiscal and from in mass year consistent consumption was increased strong XXXX the all cycle with more Freshpet's pet innovation, focused versus consumption improvements XX% advertising, Our XX%. conjunction XX% up category, enabled acceleration the deliver distribution in than consumption rate.

at were driven From greater Roasted growth key new by the than double-digit Kitchen, All Rolls, rates forms meals products. Meals successful on Roasted Fresh of our strong product particularly grew and our

prioritize we the growth. Core at fresh XX% revenue also over cat as core dog our ahead items. of food Further, at dog items business grew penetration for gains for Our XX% velocity dog rate rate accounted shelf or household We face fastest X.X space than store X.X%, significant of grew more years. new across in a Mega we points stores. grew Nielsen Channel have distribution more by even And of of the of net about closures, fastest in than the total XXX XX,XXX three ACV with now stores. the

between about the XXX very Net quarter. in XX% strong stores rate a We quarter timing the point, last of the growth the The also the holiday. growth upgraded a of holidays versus net ago. baked sales XX.X% rate of and to year, were accelerate Last week about is and the some of customers due to gap a in unmeasured up to into to around customer June points, X fridges the of channels. sales July shipments consumption year a business avoid three orders larger XX% discontinuation one chose difference small

foreshadowed With possibility for guidance initial this a the the provided we move this holiday back year, did Wednesday when We customers fewer that. our year. to

will balance a also are to We have momentum clearly rates expect update QX year. strong of We to very the continue. good start an growth on strong provide topline. Dick our guidance our on see and off on for the the

down and in we year. more in $X.X financial is year. versus a $X.X in the million did invested entirely get adjusted was improvements long-term consumer plan is advertising and are same will quarter focused Further, believe below outstanding that $XXX,XXX is We our primary is that and it near our and the the service. goals. year innovation due QX we the of QX period, to advertising and prior capabilities million. growth we and the the that are year EBITDA We only for enable in in in later investment $X.X planned those customer us in was in that also retail sustainable and result driver to ago, EBITDA return availability, While benefiting growth, product for deliver continued the Adjusted Well delivering will consistent increase with from quarter smart and that the strong period. million marketing

We also the adjusted our profitability that structural is and quarter. G&A gross absorption margin improved in

yield With in points XX.X%. partially where expect versus we than XXX basis back long-term in margin continual basis and structural scale staffing in gross In to and to are our margin. adjusted and some ended QX improved from the by the benefits improve year some continue throughput quarter and commodity most points of Our the the we gross that manufacturing G&A we by basis make. staffing for representative a from The operation. year It plan adjusted into behind Those QX. XXXX. item some by points ago coming points XXX offset calls associated coming absorption help versus structure and that profitability improving QX, freight plan industry-wide increased points gains balance by peak ago in inflation. the seven-day the adjusted G&A basis reflects to grow increased progress The significant XXX amount with the bounced organization issues versus XXX up our healthy seven-day basis of issues, improvements the as was one-time is absorbed such gross we temporary margin to convert now versus new and operation. XX more as from We've to are

into going Feed cycle last margin, We are our to I year Growth bit on our the gross in staffing. adjusted second year. a we that working strong results quarter encouraged the we've believe is we closing, by and will added but lumpy be validate forward results its continue progress grow can In made second growth the the as the plan generated

good are both unique robust an it to the model built all-natural incredibly to in sizable increase is and seeing food that founders pets strengthen their business ability of that its the delivering planet. results confidence its that very doing relationship the pets, and for we that Freshpet people fresh pet benefit become in industry, consumer parents, the The a foods their our lives enrich in attractive fulfill that Our pet merit and ways and with strategic mission and brand their has delivers. are

that expansion I this accomplish online of rapid outline our plans you like extending a will that XXXX. advantage we the turn At we by be time, of bring benefits Freshpet On that that will project. plan over to turn associated The results with further Before that require later with to our to Kitchens Wednesday, share in detail. now how I'll new to mid-to-late announcing and week. would brand over more this costs Dick, manufacturing details will discuss let capacity expertise it I X.X. Dick Freshpet we we will our the timing, know growth we the to in capacity

Dick Kassar

afternoon, good and Billy, everyone. you, Thank

net the fresh under ago recognition quarter items, in adopted net remind standards, sales the Billy were As XX% two you the standards I million, versus $XX.X new were quarter the $XX.X we period. the year million XX% up revenue indicated, prior the quarter. baked new discontinued year would excluding were sales like this so in to up net that year in sales

As told you believe because in significant year-on-year the the of movement year, and be of two due quarter that the the ramp the of comparison, at we consumption to we beginning our period. toughest would up the holidays year-ago

by the are more quarter encouraged results sales consumption encouraged growth. we by strong even the So net and in the accelerating

fresh net versus As or the than business. plus XX% we year-ago greater guidance XX% our a sales and are to for core plus our million $XXX result, raising year on

year trade to remain benefit all throughout We from is increased balance to expect the advertising the that penetration across consumption and our of strong delivering. trends of investment classes the the

our from over the basis in We a up the Despite holidays. approximate XX%. changes have we profit sales. XX basis in period-to-period XX.X%, points of quarter. basis our the from million XXX costs basis XX.X% would of Adjusted XX one. costs versus coming $XX margin commodity includes transition. in only increase closely meaningful or year-ago. year-ago seven-day patterns was inventory been trends up quarter expenses quarter from marketing trends $X.X shipment [indiscernible] selling SG&A time, absorbed Without labor behind around mirror approximately higher million temporary net and That adjusted and will points of consumption the these absorbing seasonal variation, the versus points quarter Adjusted the in was or period year-ago trade, expect gross and production XXX the costs, that but points gross Further, for

accounted media of Billy increase. bulk our for a As indicated that spending

in $XXX,XXX us expect by G&A was Excluding EBITDA expenses, This of the Adjusted the with made we increase costs down selling in XXXX. track versus investment. points year-ago. the point period, $X.X G&A XXX million, quarter million the puts marketing on basis basis improvement driven pick good to fixed the we up $X.X on a achieve and as on from by the year-ago to XXX entirely progress marketing

the of towards the heavier resulting waited half will year media second back in we half in year, year. a our to in net the to half accelerate be the of and significantly past, expect the As sales, the the the EBITDA the spending year for due first of

EBITDA strength from our reiterating the utilization expect improved effective of we as year from gross million see media year, and than and sales half net margins of are increased in in continuing and improvements guidance adjusted the for through put. of the impact greater We back in less to the investment capacity continued $XX more yield

cash. net raising are our we adjusted though in $X increased quarter. in costs particularly million and some $X at of of We on to as sales We expectations end committed the quarter quarter, not remain the the had ended guidance drawn freight. debt and of we the We EBITDA commodities for also growth revolver much despite paid $X.X investing back our million higher million with the so

and to annual very To efforts cash year. we might free reiterate, of positive that's flow the expect from sales impact our to sales net year, guidance. track greater operations achieve annual in particularly to growth progress undertake are debt encouraged capacity up our remain far any the and to so later $XXX the adjusted this produce the by than million year EBITDA guidance have expansion our and taken with we on continue strong We excluding net

to long-term goals. deliver are our financial confident, We our also ability

year, to back to of our accelerate bottom ability and the take to scale profitability. half That capture the will the our overview. our some the We added our concludes line. demonstrate we scale in of have ability benefits structural that growth to In the proven

your questions. We will glad to take now Operator? be

Operator

Moskow At of the your be a this question. session. will Please from Robert with [Operator Suisse. we Credit first comes Our question-and-answer conducting time, line proceed question from Instructions]

Robert Moskow

things of the you XXX hire XXXX? you. why thank One two can do going me to of - of is you a time. margin same once what's questions. for guess big going be people I plan are Hi, it's through or hard lot you to to there's kind - that and points guess be going the with - at capacity as those have well Can I reconcile that two to expansion expansion basis at remind a are how capacity coming expansion

Billy Cyr

So new facility products the those coming is costs Rob, the the expansion will way the we begin all planning we're until - from the capitalized we'll be do for and of all out have saleable facility. production capacity

end the you that that costs entirely would almost up So you're would - see capitalized.

Robert Moskow

Okay.

that labor So the separate? is labor or includes

Billy Cyr

and associated without project mid-to-late XXXX capital labor of our cost they be will labor testing associated and of while personnel The wouldn't getting part production with which hired to they're part and that planning. No. training all capital be is our

Dick Kassar

and to in bit relatively on the that outlined Wednesday, if it expansion to operation it the the will which to make financials the the of understand a we on modest that easier how suffice will from little of But when see handle say any also unfold. will plan facility Rob XXXX is plan hiring in you'll we XXXX. clearer how be impact there capacity, the it

Robert Moskow

Okay. there to Well guess mean a XXXX, is the this, that backward, expense… for keep I it just on I labor get you doesn't - need there's but mean doesn't that like to when step harping

Billy Cyr

you We on out going why expect see we're is. that. you'll don't lay Wednesday that so, operating understand that when plan We expect don't again, and to the

Robert Moskow

- their you're evidence to rates new Okay. particular? expanding in new on color seeing you good color give is do penetration on if just driving That's Thanks. topline and maybe can so it that household a we have than us very better what And of the thought, is the more helpful. which users existing use franchise, the very to it users little franchise, us the you more what's coming velocity was that maybe more maybe

Billy Cyr

buying into on way, on penetration on to look that and Yes. the also is color this a we're people keep I saying more the detail we like same but we're hate just is you we the the up lot But lot rate it XX% when bringing about people of on headline franchise We've the will give got a it talk Wednesday, and we also at in into household the year. franchise from and the a brought same year-on-year expansion lot that seeing time last it.

be about prospects business continue it's that for there's and that and pool those that been of there can expanding But So recruit at point the are it we've part like penetration and tells high the future. time we a us more quality look at of we this the buying talking to seen this expanding our are that exactly what we've rate. same

Robert Moskow

Billy. you, Thank Take Okay. care.

Billy Cyr

Rob. Thanks

Operator

Chappell question. your question line next Bill of SunTrust. the from Our from comes proceed with Please

William Chappell

afternoon. Good Thanks.

Billy Cyr

Hey there.

William Chappell

the occur Just that one not so actually of the on was really clarification shift, Billy as did holiday that big impact an in or quarter?

Billy Cyr

that the we sit shipped end. as year shipped worried of because than previous last vast on the the and a There LTL, that on We we was We and on around. people But holiday had was the lot and July back our X, front end opted worried shipments of to the a problem. on the of fell all them rather to - Easter. Monday having pull There no end. no what would are related front out orders majority would into week Easter the saw the problem Tuesday the both impacts impact the be have the

the this a because compared to the week a in the we shipments reduction year-ago. quarter when the so last holiday back And year day, those move in of saw

year than happen would year they the little just they way have to should I fall larger a fell last think bit expected. and be this they they

William Chappell

it. Got

we incremental into So the there's third benefit as move no quarter?

Billy Cyr

We're we a - consumption its the of means the year-on-year shipments started It but seeing we strongly that comparison on nicely pattern. other consumption each just match year. means off very middle and normal July, in the in normal

William Chappell

in and process remind in the of terms to it for thing. in you're spend, look the months Have post stepping me back kind posted then of it off me the of type works? marketing or understand kind down three you and how July again still you or it - for now Got we then two we as it. are or half help And of steer started then October

out how going the understand, work are also what's to of now trying Just that any? to off and is if of your expense expectations or the drop deceleration for sales

Billy Cyr

returns but of some the kind of and flattening now versus we've like of responses and in had been handful during a was periods August towards coming in the really digital have we have been records periods October off period. those as we since seeing and that for the growth the gotten straddled the TV front nice seen of We versus we've in even prior much the planned But a off, we'll November prior low nice year. So and steady level. back of about year, rate and so is weekly of the It off this seen like and being on also do we've still of we better growth, six September TV steady We've levels kind end thing have media pace, advertising out and weeks a of a summer lower at period. very great will mix have of even TVD, period, actually a but and we've actually historically and digital. not TV of some into

about happy that. pretty we're So

William Chappell

So just a follow-up.

that off we the So full-year side maybe due for the the to not the believe half? today raising is to thought on I or we're year-to-date drop back revenue guidance the the see of going in

Dick Kassar

of half, be the bullishness but the far a whereas that bit is the it and ahead would reflects reflecting are we're we ahead more on the thought where in back we guidance first of little - half. of as The more fact we

William Chappell

it. Got Thanks much. so

Operator

Holland from Please the with Consumer Our next Brian Edge of Research. proceed question question. comes from line your

Brian Holland

afternoon. Thanks and good

how The it's guidance sort guidance guess, you, that is played just I'm to first out plan any supported and clear. from more guidance sounds the that half first much How indeed EBITDA the are behind freight continuing, - QX like revenue upside that? you focus areas be you that can specifically guide The just about that's If topline much should anticipate distinguish you're back sort we whether et line maintaining? - potentially by that that you in half with but et talked I thinking cetera, just raise, of of to what the and hearing saw question, is of within that reinvest just in of about held, you increased you in it confirm, reinvesting media exactly to decision cetera? EBITDA maybe be and of reinvesting that

Dick Kassar

Yes.

whole Brian. expect what a of the decomposing the beginning is So aren't first XX/XX detail between and split folks What you on half we see lot advertising second to be on tell play the I to half going our of we we told will can out. go the and that, years, at that

We a in about us What because that's that seen on commodity about or million year, that the you close inbound freight have other we're increases decision truckload comes stuff in the freight I'd on also it's side, the cost largely $X so of full for We've full elements the tell quantities. freight. our discussion mix. on marketing is there a EBITDA did about spend guidance. at seeing also commodities, commodities. into to been truckload on cost it higher talking playing and have that's We the the

because our what's expecting higher freight inflation, we're that increasing And savings. had down the scale. On would freight our not but is losing We of scale rates. offsetting outbound, happening increasing a go seeing is we see been we're

it's will involved So be factors all, when the skewed you kind of going towards other side, decompose but as there it to well. commodity be

Brian Holland

my and think coming in what data seeing end. sounds like from is Rob bit from this stronger - it question asked earlier And I'm thanks. than that a your Okay, then response I so little your even

household to going this that the I can up data your maybe increased answers in? the you keep Is see, with guess better? frame engagement. the in is the line? sales was household household because coming to Is that's of the curious new per curious question, getting on picking spend growth mentioned you I'm it but extent of growth penetration I'm penetration to trained which folks thus in just on based bringing if line that far to just as if to expectations. as implies show media increasing it brand it kind primarily along going is sort how continue households you're obviously So what more loyalty could I I better

Billy Cyr

Yes.

you has showed and As spend, match we the we it strong pretty media outlined core before, growth there's continues our and continued June a now. household between and in as dog penetration it that

that on of We when particularly will you and the the this has because that bit getting doing some helped well. as products we share penetration year more be we're able I would a household new to little that update well are But Wednesday. launched that an say added detail on we of benefit

year. getting the we So the this thought I that performance as added performing better launched exactly think we're and new than expected an is products from on bonus media we

Brian Holland

lot. a See thanks you Wednesday. Perfect,

Billy Cyr

Yep.

Operator

the Please proceed with question from of [Operator line comes next from Instructions] Our your Mark Stifel. Astrachan question.

Mark Astrachan

so I is afternoon, timing the good just everyone. for and guess the Hey, this so are thanks question Scott. starting guess XX/XX and spend, the maybe Yes, expectations ad same. on I still

metal this So curious, of I'll the not more the it then kind I question? assume sales something let is Why response? and given you're debating so spend I'm consistent that it between guess - I answer and the seems pedal to mean, is visible. I like thing, amazingly pretty correlation why the is internally, not obviously,

Scott Morris

that consistent come been I for So I really have think around think business, we've see how - this yes, it people results been. to the is have

correlation in see response. they they're of them, pretty impressed the I people I with when think the for think outside spend typically

want can quickly place. to us and obviously to can we make But seeing, thing expansion ourselves that comfortable that grow of the There's is we organization we we're make love sure the consistent want sure pace to keep of lot quite seeing. in we up product we're if - and that that the we'd day it's and we're that at because we keep numbers to We out can quality we don't want one grow to a think I a deliver that consumers. a in number ahead doing and really work to place. to in get strong day with

So I think that's the focus.

In addition, there's to to we're to goes. obviously on on year keep want we as sure financial we're ship committed those metrics that focused and make steady we've that fiscal deliver it this and for continue the and

Mark Astrachan

then guess, usage okay. comment increased on velocity double the it, Got of like question. were a even sort And I

mixing in food And more you is to of So do incremental Freshpet de-ultimate as people you that other within ultimate the that food And your part dry or that the other back I velocity, bringing broader what are how product. they're to Is in? on consumers category cat for switching think guess specific first that food it - were penetration you then of sort categories question, food to ultimate which more of about the market? is consumers of you're do penetration pet dried your thinking related here? penetration products? previously work? your compared who about dog, to the your the Is And now in

Scott Morris

the and kind you in - from the still math data interesting, an at we way look we're The the do of it. of get there's the - think have it's think and standpoint. we're good becoming today the to best many and think We kind really is hard it from look below metrics how really just you and and start it's like changing out traditional that metrics input two we're to penetration it, high you more around well what So like you as that of But - the it quite high to and times that consumer starting doing industry can get opportunity I looks doing numbers in increase and like you more people is healthy the at the tell believe to us we're what We categories. what for beacon. kind we is almost can't of define and great develop more food is continue really play in to that honestly. I

quantitatively, So I times think in of think I a penetration, there is in it Freshpet defining it's this moment But there's yes, I almost seems think the a confident XX we logical in that. XX category multiple is be. five longer and term, question I from years kind and it now, really a could - a mean Mark look years does on share now and category be like it of food like could what from that feel

Mark Astrachan

Right, right.

Okay, thanks.

Scott Morris

a have, ambiguous. feel at answer. had best in strong I that that we know data again beyond Everything show the we think potentially the we The it's we've we we've We that it. super ball clear is but a little potential, share I really the even things there's shared crystal but really got that we confident in But past. - demonstrates don't that. have think I

Mark Astrachan

Billy sales coming into know? the certainly Just the lastly category, discussions be how a I since retailers have that's I accelerate. for evolved and trends it's to more seems of does started? small there's for mean standpoint, maybe people I'm do with accounting what particularly but growth of question penetration though curious like you bigger but percentage Freshpet obviously Yes, category seem helpful. it from still you, the

you two, the retailers penetrate you're fully strokes lot I'm those one, broader a more How So sort where penetrated which not are? is that them. and of of fully just guess curious, discussions I are within evolving to

Billy Cyr

a it. bit in to walk average imagine same-store provide are for you be and that so a that are to show obviously. are growth going right give their sales growth you can little numbers Scott north in you retailers are retailer of now able But on XX% that than metrics I delivering and most overview when color you some a and can as better topline and am you might on struggling more

And years ago two that strategically try compete people's e-commerce, more is they're scale. have we do you a them focused. retailers about You able particularly growth going out, we strong significant to rate, attention to work with long-term obviously think when and fresh we are with are figure as these how also that to area many now get not of an only versus but where

can still think So point have every on they're you where and our can and prevent potential their They of see feet. you gotten stores. engaged leading what But much sort figured the and what with seeing in same obstacles jumping them us from of who many what or those is and I it more conversations the putting are have both see of to understand the that - in what one the is out edge interested. face we're

So means upgrading their that they're fridges.

year where upgraded about a smaller we've there adding already second ones. on completing And to larger many XXX retailers There we're this are fridges some fridge. from about out with So distribution. retailers going are there conversations the

their in XX% of we're So going XX%, to XX%, XX% or of stores are XX% stores.

but continue and retailers getting conversations the remember the for think them challenging in backdrop operating are investments stores. it's particularly to I very most make much more those you to have are backdrop positive, in So that a

incredibly some X% in growing think color five do a I we've see see I for long what consistent consistently operate you pretty see might to that the four measure like And expect but over measured such on and way year lumpy, continue steady. haul at incredibly looks the them that a I'd of see have some also been Scott that. now we stores ACV And can in we leading the big kind our so is ACV, that to distribution is I growth when expect more environment, in you transforming category. but it and that retailers know in get or When years.

Scott Morris

scale a category We've in. job, did maybe got to great mentioned - Billy to we answer Billy share in consistently There the over starting got have in incredible XX, that retailers. We we dog stores who more we're bring milkening XX%, to answering got food bring in. as new is But to retailers in of XX, in We're have growth. leading little frequency from the that consumers the go able little XX%, We're a we build XX% We've that and real traffic demonstrate that. aisle. strong pet been bring on dry like of kind of and that are the question to bit a the category. bit wet we've it margins. a really demonstrate

And playing that at store them we really and think into that's and the the So finally, a to the bring of I solution what becoming we're think category look best then of I the when Freshpet that continue perimeter able into out. bring, more help is the center retailers future. grow really of their recognize to to

the to feel in. So participate it. do the surpass stores starting able we conversations that retailers also be in continued to that we've we've level I but like real have able we're of kind we've the the been to as been it where growth for I rates look do currently they in historically, think of at at change now like a had to size many

I So time. to really it's for us out going play over well think

being we're a partner. I as favor at looked think

Mark Astrachan

guys. thanks Great,

Operator

comes next Please proceed Our question. William line from from of question Andersen the Jon with your Blair.

Jon Andersen

Hey, good everybody. afternoon

Billy Cyr

Hey, Jon.

Dick Kassar

Hey, there.

Jon Andersen

expectations just been and my you And a buy if answer. of you comment talk have room the rate? households, forward? couple questions more and trends about opportunity things level increase kind where among with a Thanks. buy Freshpet but One, the on have existing broadly and of a your internally to you've In improving running I and historically going you know progress answered, conditions. to you there today of the how and seen focus could fridges much there's much could retail little of the been Kind bit is Most comfort the leave what are second I and how your more maybe? of level the are rate lot there then on there

Billy Cyr

lot we seen rate spend have done buy recently consistently mixing becomes then of of it more people over more people in mixing time. of a come continue a their becomes is Freshpet. as in actually and ago for from in third just then of a kind user visual do and more and couple So what a perspective, and - redid we over year behavior more of very they a transition the to we a being then franchise actually that the behavior XXX% Typically even in to and study we've see level bowl years it second light they time

We've So we then we're help the and data. done some different had made and on retail secondarily another around nothing improving this few a would - seven retail product would lot I component love work There's to hold we definitely and of a at areas. too. our they're like that and the definitely conditions. a more line say product our have we that year. brand, of standard kind out conditions, a We that that tells you probably a company tests franchise of not in kind than progress there of our five

do. that on at active continuing in looking we next discussions again what we're and year So to work can on we're

past the have of clean, cetera. shared things we've off, easier greater stock in we've network that fridge of fridges One to that that fleet are in some overall the best-in-class and visibility, in to fridges better are where to there are putting That is we're better to situations shared et merchandise, that we're out renovation and We're and the easier upgrade of the putting not that putting does easier Those standards. retail the improvement the fridges work our conditions take out help up care the in. better there. work

coupled things will to time. presence two over those continue of that improve overall together So kind our retail

Jon Andersen

to Thanks. color, look the the Great, Day. we forward and Investor thanks for

Billy Cyr

you. Great, thank

Operator

end back like reached of and call the I gentlemen, question-and-answer turn for would to the have the management session. we to closing remarks. Ladies And

Billy Cyr

provide what for of performance about in you X.X call and feel very bit say is. on the Obviously, about the detail very quarter more week year. that color looking to good this we'll the the business in we and thank Great, think little we kitchens a balance the referenced questions forward have later more We we much the this obviously potential Freshpet to date interest. business your delivered and we're where and this to

information you we Wednesday. Thank folks with forward for on your that to sharing So look time.

Operator

conference. concludes This today's

time. your You for you this participation. at your Thank lines disconnect may

Freshpet (FRPT) 6 Aug 182018 Q2 Earnings call transcript