FRPT - Earnings call 4 2023

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Operator

Greetings. Welcome to Freshpet's Fourth Quarter and Fiscal Year 2023 Earnings Call. [Operator Instructions]

Please note, this conference is being recorded. At this time, I'll now turn the conference over to Rachel Ulsh, Vice President of Investor Relations. Ms. begin now may you your presentation. Ulsh,

Rachel Perkins-Ulsh

Good and Fiscal you. morning, and and Quarter Fourth Freshpet's to Year welcome Webcast. Thank XXXX Call Earnings

and Officer, will are Chief be available Financial On Bill also Scott Todd Q&A. Officer; Officer; Operating call Chief Cunfer, Chief today's Morris, for our bils Executive Cyr,

to statements. and during include please will cause data. management's Reform for long-term of this guidance, those the these may, our Securities project, from course Litigation associated call, statements with These similar within management beliefs goals, we begin, exact and achieving forward-looking Words technologies could, are the forward-looking intend, statements in statements or current as accuracies meaning to including Before may risks results based such those of could growth and and on third-party that the expressions described These and uncertainties these XXXX. Act related remember and that XXXX believe, are in involve focus of expectations conditional make forward-looking materially new estimate, strategy, differ guidance. statements and Private actual XXXX face intended identify prospects such to goals, statements,

expressed on Form cause actual and results Please refer the press implied the that could filed for any of or risks those company's in made annual today. Commission a with to the today to materially Securities and issued XX-K report forward-looking Exchange release company's the detailed statements from discussion differ

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

to the considered with in for substitute presented the isolation for these useful most believes or useful, as intended measures refer measures measures measures. management prepared non-GAAP the with to management press information non-GAAP with associated such reconciliation be provide measures, company in today's and information While why not a investors, comparable financial financial limitations to accordance Please of the presentation is GAAP non-GAAP such measures defines are GAAP. the accordance believes information in a for such the how of release non-GAAP non-GAAP financial

many presentation company's Finally, a will That summary not results found the company the can on that call. be it produced the key website. rather, they discuss that will be specifically on a discussed Management's this commentary the is presentation the of presentation the metrics through investor walk on of and guidance will call, today. has contains

Chief would over Officer. I With like Bill Cyr, call to that, the to Executive turn

William Cyr

us, would you our with continue Rachel, from Thank significant an prove you, I value. comes like we everyone. profitability our business did as if to will out journey in way market towards metrics market. away we nearly food delivering we but Freshpet to frozen believe today's not progress And set we execute a on one on XXXX, shareholder message also and from expect call increased take is corner profitability on deliver. only all profitability you've XXXX, We increase we that turn, leader. In as segment in of in to come sizable, we flow towards but and inflection growth cash the kind and and to made would the to on a of The emerging expect scale are delivered that becoming a profitable reached turned good fresh the morning, strong the point its has the pet

Freshpet Freshpet our competitors business, entered that Growth, XXXX, we a Feed first-mover strategy, it beliefs was driven was and scale-driven before maximize that is in market. food food our also important dual which and Our the the implemented to by advantage

to advantage belief year pivot such last to scale where point we can the the sufficient plan future that fresh a we first-mover have that begin scale. should achieved at come that to with transition delivering reflected and Our our that profitability are we

results initial drive is a and believe of profitability, further that significant there the opportunity going we Our ability show profit to our improvement indications forward. XXXX to drive

through full highlights me year. for fourth some walk quarter and the Now, you let

First, and a year growth growth This quarter inventory was with strong X% The last to of mix. year-over-year, sales strong with growth and XX% net XX% million, of driven refill. by had fourth the advertising strong exceeded year we ended gains when expectations by quarter accelerated significant that primarily throughout is growth the very volume compared presence up $XXX.X sales very trade a household strong our penetration supported quarter. we price net and

continue the XX.X% period. quarter X.X% third the net in in to in the X.X% costs XX% our in third prior prior sequential including and quarter period, came we gross plans were Fourth year and margin, EBITDA. adjusted sales, adjusted gross the Logistics of from improvements designed to down XX.X% X.X% strong was the operational costs and improvement in quarter. in adjusted drive, at future compared margin fresh Second, see to logistics year

was million, on XX% Xx what in above $XX.X was delivered year-over-year sales $XX.X Fourth adjusted was the sales Fiscal million, targeted third consecutive up in net and XX% the $XXX.X growth year. quarter quarter our expectations. year million high with year to $XX.X sixth year-over-year. year our compared our Full XXXX up greater of with adjusted we million and more of end range the previous EBITDA than EBITDA XX% than

financial I'm our able results real what These momentum, been accomplish. capability of plans the you've and incredibly of proud to team. demonstrate our of the potency

to in financial increasingly those in retail our the they to addition increase ability In presence, significant saw partners we delivered them. retail became our as supply highlights, confident it

or fridge of retail fridges, cubic a of XX,XXX second including Specifically, new total and XXXX, placements X,XXX or fridges record bringing in third X.X upgrades than at to retail million us stores, space. of more a feet

continued Freshpet now These by note. strong than supported that As more in multiple which store XX,XXX of be rates and the growth could a fill in fridge in found fridges XX, the of high XXXX, were ended December XX% have stores, U.S. placements quarter

retail increased also fastest-growing define you desktop, time strong have a previously collect, food. XX% According very $XXX existing store are digital our year-over-year, order we online click as segment and buy and today The at this Amazon. In in be our fridge of so I our in sales on built over this are also a XXXX, e-commerce million network leverages of XXXX. cat of addition point, business. any we strong in digital or up business, orders the In and pickup is to dog anything ] or our includes digital orders, to Instacart, pickup to and which as a in phone Digital orders digital pick e-commerce NielsenIQ, sales [ from online, net retail. which referred vast Chewy to to majority we projecting

today, for which includes presentation and food the to business that a XXXX, which in Fresh people $XX that the vast to and majority it simply and more use us e-commerce and believe leaves more. recall to according we be market intensity total and conference have us mainstream making as created segment only we ICR will hearing food: has category. quickly. our as mainstream profitable idea is is within about creates the we same concentration a which Within X% a Nielsen At little January, scale to the billion a may component, We're data, share, food growing $XX meal pet runway the a business this is have that food refer the talk time, main main of new and pet the meal, of as more billion Omnichannel you growth. December allow and our Freshpet of of category, During which is direct-to-consumer, XX, dog into pet deeper mainstream, a Frozen gained main I'll plans, getting more brand profitable. Diving

Fresh market the has in channels, measured Within Freshpet a subcategory Frozen share. XX%

a more of is products to stage the pet's since have range better income goal mainstream dogs. we each needs our groups, to even larger products growing make for a wide of meet life Our portfolio to and of our are fresh appeal

over and household our at million up XX% Our year-end year-over-year growth. penetration household XX.XXX penetration XX% towards target was accelerating of households,

households Z groups. saw growth pet-owning and income HIPPOHs a up or Household versus grown penetration for has faster, short, even consumers, year ago. across all fastest we Gen younger high-profit Our grew XX% with

on XX by households million meet XXXX. to pace of are our target We

with gains going retail distribution ACV in ] continued forward. year-end [ availability at to grow, of continued see upside Overall we XX%, and

We will second just with continue depth, focus too, third and about breadth, earlier. not on spoke of percentage to increasing stores I fridges the

in HIPPOHs buyers represented is with XXXX. a Freshpet Focusing that of our use users huge the and percentage meal, meal, we on sales and increase HIPPOHs. this XX% their there opportunity our component the Freshpet pet's to XX% of product are as of significantly main even they of of the concept XX% main know

We on as to and products item concept main users toppers recipes. focusing buy healthy into food, expanding pet of are points The the using price meal to at advertising year-end. parents meal was a increase rate, converting which at Freshpet drive specialized offering $XX.XX by will main variety of feed

do increased SKUs year currently from of to us wider Based this advertising. SKUs drives mega-channel X value per main is an Freshpet our to XX.X on up help for amplifying can and consumers -- as item. average drive to store, Broadening using visibility we brand, our of of the also data, third have items XX.X the range enables a and that, Adding fridges availability meal of convert a more second ago.

more play business and and we and Turning scale increased to in concentration more, profitable, through seeing main efficiency, leveraging out part We of our improved believe are efficiency. intensity that and enhancing margins the operating more already. drive will and are performance we margins increased

prior EBITDA percent sales up gross adjusted year to the year-over-year and a in of to quarter XX.X%, XX.X% Fourth period. compared XX.X% adjusted basis was net XXX margin was points as

for we Three now down period. we And key logistics input improved prior XXX by and X.X% the with logistics been quality. quarter, XXX year. we've total, In points from areas of X most full improved QX this focused in points past the X on areas basis have in and net X.X% have only sales year, year basis those costs, in all been the fourth

where We about high December January the all-time in good fill time are of the driving we across strong record. very rates an production lines And today. Focusing the loss the today. X XXs now despite start-up feel the for December site production topped on first system All record operating total system the of was capacity. the in that X accounts track roll for are and end and for the today, XXXX. first of of production, line our of on quarter construction XX% by is as third phase of Phase Ennis holidays, the

capacity our expansion evolve plans greater to to drive continued capital We've efficiency.

focused to throughput. by the an excellence operational our increase on very of designed are in output first, existing investing lines maximizing We program

on just program Bethlehem, progress Ennis. that in good making in plan are and We the started

seventh avoid the to infrastructure can the believe also to additional cost lines line maximizing two South, our means This an we We way of plans We've overhead. lines and existing a ways X for a into finding high to X more get we Ennis. incremental found sites. get to announced in get Bethlehem. add sites the of ways are Kitchens line in Second, in capacity of more or that so already and looking each

Third, on technologies working this been generate some share line developing foot are time. more We've and and per throughput at per to new good details are not time that this progress, square ready but for making of any space.

net the ahead goals to what either XX% our confidence those exceed of had our meet deliver or XXXX gave us ability needed The in us ahead the in sales of goals. projected. we put was XXXX to strong year pace increased growth Overall, and

we we capability. very do of growth into head to ahead intend manage we or capacity so closely XXXX, get that organization the As not

balance. the generation want balance very well generating far too at get right ourselves to our net growth spending targets. sales cash deliver and ahead upset works XX% do that and not model financial of of over Our We capital to time,

even margin We ended goal. our long-term an our gross with in our margin more year the the gross pace higher at both giving of adjusted XXXX XX.X%, about and a quarter even when XX% target recovered of deliver XXX basis encouragement ahead points the fourth we of hit to us target our ability needed to margin adjusted gross adjusted

well to at sales, logistics the will delivering long-term improve target lower ahead in have the an are below the rate is of We and year of likely target well of that the new we X our opportunity years target target. X.X% early further in a a net ending clear set logistics It future. and

million $XX our not in to [indiscernible] and of was plan debt. cash our with Operating no ahead needing our of confidence fund ability flow even our need new also growth and increases any for potentially

of cusp and year, good very on with efficiency profitability due intensity are a and we and increased had capital we concentration management. we summary, believe disciplined to greater In the and scale business

QX it details Todd? turn over of our let the results walk to through Now, guidance the XXXX. and Todd for to me

Todd Cunfer

you, Thank and good Billy, morning, everyone.

had fourth year. an Billy we and quarter As excellent mentioned, strong a very

Now, color and financials for I'll give you more our guidance on the some year.

net XX% broad-based XX% with in was million, dollar Fourth up saw over versus and Specialty, XXX% channels. sales growth growth in consumption were XX% channels. across growth quarter XX% growth $XXX.X year xAOC, Nielsen Pet the measured period year-over-year. We in unmeasured prior a

net XX% XXXX across and up Fiscal Nielsen again, growth in all Pet XX% were growth was growth unmeasured approximately dollar sales versus prior with in xAOC, with XX% measured channels, Specialty, $XXX.X channels. XX% million, in year-over-year. the XX% broad-based year, growth consumption

our on across up plant key XXXX points XX.X% adjusted up driven was areas, gross progress to as on by adjusted margin year-over-year. improvement gross including plan. year-over-year Fiscal by as costs. XXX margin basis quarter quality XX.X%, focus well was XXX This operational improvements points costs our leverage basis Fourth was driven

$XX X.X% SG&A of to from XX.X% adjusted year us sales of help We up media the costs, period. sales compared year quarter decrease basis on was the to approximately last logistics start improvement to quarter, continued compared QX million in in saw a points to XX.X% net net prior off XXXX. in X.X% to period. spent prior Fourth a We net fast of XXX year sales, in down get of the

XX.X% prior net of XX.X% Fiscal year. slightly prior spend XXX point up year XXXX costs in the prior down was was were XX.X% the from improvement SG&A sales, for from of sales, a XX.X% year net adjusted down net to year. Logistics Media X.X% over period. of the the from basis sales,

XXXX was This or was sales EBITDA and and adjusted of million better-than-expected of compared period. adjusted EBITDA Capital $XX was XX.X% the expectations million our to net and XXXX guidance we improvement prior net sold goods $XX.X net our sales. flow hand cost year the Operating XX.X% and year-over-year million, net more $XXX.X had million by in exceeded cash cash $XX.X quarter strong of million driven at in of of was and Fourth than on fiscal sales year. X.X% million for to performance tripled logistics. Fiscal and of the with $XXX sales $XX.X or line expectations. spending operating or end

and fund We cash in have that positive we growth free we cash continue our be to will adequate XXXX. flow believe fully to through XXXX,

also believe in we to access will forms capital We it that have traditional if XXXX non-dilutive of gap to bridge occurs. a

XXXX. Now, for to turning guidance

net million by $XXX be of expect of $XXX We EBITDA at $XXX sales and to million million. driven adjusted in the volume, range least to

installation XXXX, expect in further approximately million capacity placements expenditures We fridge to of ordinary to of support the meet demand maintenance. capital and $XXX

capacity. impacts understand that to It growth the is rate to need capital directly to important spend build our we

expectations our not of We spend is We target sales at We our of carefully why build are closely exceeded net and ahead media expanding profitability. managing get capacity capacity our putting increasing and growth are want in very to sales place. our least cash XXXX, for disciplined we managing below rate growth XX%. while do balance, which that slightly long-term of is XX% the in being the

highest In momentum cadence, expect the year-over-year. from we to fast XXXX, based being terms growth QX year of sales with rate net the strong percentage on the start

growth our the progress sales growth net right growth as to about see throughout lower rates investment between We the as and year balance earlier. talked we sequentially we capital manage expect as deliver we to

is slowing, that imply construed should the This not opposite. the quite to be business

the the within required plans cash we investments managing can live so to capacity. and and growth our regulate manage advertising timing capacity pace rigorously are carefully build to We that our of the

to as target net we ahead so want expansion. deliver to of our far sales growth We too get over long-term time XX% of close that don't capacity our

year half adjusted a least at percentage gross expect the be points, the half. in first slightly expansion of We of absolute second and XXX the higher margin margin gross to basis versus

we have locked we costs line QX. back XX% We line will of about in in have to necessary growth. costs additional as media the commodity this in some modest with line on Ennis will in fourth currently for in in third QX, sales on and start pull and control deflation expect anticipate costs Ennis and to grow the At year in point, our We the XXXX. start-up sales,

Lastly, we adjusted improvement EBITDA. expect sequential quarterly in

Overall, we XXXX. in momentum so are and proud to a we our with guidance deliver strong of believe our XXXX on our are results in far position

in look that or and believe plan future will that truly of it expect having a category, leading goals. taken for inflection demand emerging to actions year from an delivering be continued market was would segment a ability remain in With be high-growth strong way and apparent the XXXX profits on XXXX our products, from fresh deliver point share in we its that for when We the in and Freshpet market. we've that an back frozen now, confident our on fresh to our two Freshpet and we a leader kinds will one the

concludes That overview. our

be We your to now questions. will glad answer

please we As the your on the reminder, Operator? ask and a focus company's you questions the operations. that guidance quarter,

Operator

Rupesh first today Our Instructions] with the Oppenheimer. coming from line of question [Operator is Parikh

Rupesh Parikh

quarter. strong a on congrats Also

a start maybe performance very XXX guiding point gross in just sounds on QX, this and basis you line, So like it improvement the for margin guys year. strong to are at out, least

takes just So year? maybe, through Todd, the that walk see if you the margin for the gross puts on you and can line

Todd Cunfer

Are 'XX? you about talking

Rupesh Parikh

correct. Yes, Yes.

Todd Cunfer

Yes.

fortunate nice opening our rates expectation deflation, of right amount inflation So enough in commodities. to a commodities. in our our obviously have Really remarks, will are as of right a in we're we and see We on some now the now. overhead. to mentioned going that's fair I little But labor lock bit

input costs. in So we our see will a reduction

'XX. progress in which made We great we've costs, anticipate on quality

any continue main to for they're We not overhead in of to some drivers. a see fixed of more out of a lines cost, Ennis, new in the in labor still lower and 'XX, we're it's and will the 'XX, building we're -- that's are 'XX, kind because improved input improvements costs to progress see probably become really going going 'XX there, quality couple

Rupesh Parikh

follow-up maybe Great. then just And X question.

to the going Is algorithm the what you top end is way for and are expect a there help frame to by sounds your manage capacity you your like end today it of the line. to So to guys where year? longer-term

William Cyr

Yes, Rupesh. of be this but overall also just form. of we is not capacity The way be capacity, by think we to that to mindful, have about would mindful

this in is so And first X Ennis line roll line. case, we're the managing to what really is Phase a

tightness we sustain bags, of far the roll roll the up each so want So -- on of on the come end growth really us to it we've in we're to guide anything we're we're and that well up short roll We're capacity the of until between these line tight we'll on working a get growth and capacity. to that ahead the prior business. being we enough ourselves the comes to we find and capacity up ourselves. to but pretty too trying managing [indiscernible] runway roll we don't good and the we've bag 'XX, be ourselves we able drive so literally the line shipping got, side bag But don't will side, segment can really to make flip have on doing bags, got. the rate that on [indiscernible] when accommodate have around side Once projects, will sometime that until sure the to coming diligently that that's place, in very so

Todd Cunfer

Yes.

back have then billion more Billy the a as now, And get back of But of the to get above we into little as mismatch. 'XX. got versus rolls. the billion a about capacity. mentioned, on there's need right side obviously, in We've So we $X we well total bit $X

rolls So of causing -- us it's a right issue. little really the it's the an back bit now,

Operator

with line Davidson. is from Brian the question of D.A. next Holland Our

Brian Holland

so the communicated Number what higher in for quarter. media. came QX, that little higher assuming planned on I'm had and Quickly was a than maybe it you was I than in maybe to prior projecting bit

that to an QX? you look just So And sort of opportunity increase then number to extent to just the that can horizon that out pull spend also, anything understand speak you just on you if respect as you that curious Or saw? the logic want to needed? in that back there's there what with any fiscal media spend we the as of variability with 'XX, to time behind can

Todd Cunfer

I'll and I'll So off start let answer. Scott

internally we for a kind kind sure come costs weren't the for number hedged of We So while. the where that of would planned year. the little bets our We bit. media, a

kept gross the We we So some dry margins very, very kind sales back. back, in that well money. released the some as kind But do really saw, of powder and of we all QX.

planned But that externally, bit. internally, a bets we our we So amount. little hedged

Scott Morris

especially had unusual that than small on your in changes a XX QX. it's We penetration we I much is far ended within would kind momentum bit little more of or pounds. And us we that can also spend where part consumer QX, and that we That through in into so how in we We about We're question make is say, year typically in overall we days. seeing good have top out But adjustments significant think that second more XX how it. days was and growth, capacity can historically. both manage units actually your a media. can in this come line we spending and of then out QX up gave how make, modifications,

Brian Holland

for of that. guess is to the a just for a we've sort a about effect? to now. trends that? ultimately ability catch quite follow-up to you? pet the then people And it your behind be Does might what there in a up Is been I asking And premium food seeing while of lot question counter on that lag reason the

spending the around another in to guess, fresh of or if roughly the is more. I going big you're I So believe space visible north $XXX media million be space, spend. not the same, at, frozen about competitor of

And an can for anecdotal sort -- to if for are about curious I'm we're seeing you redefining XXXX points and or that if refer of whether sort frozen you this of anything you just subsegment data at for and might of business. point is wondering inflection I'm an any the premium. been crystallize that it's fresh being there's food inflection And talked point

So what I'm you or that curious you've seen just speak what can to end.

Scott Morris

Well, X the let me -- the kind in answer sections. of

The first a there category. would in overall like one, been, has say, I change the

we're We have any have come seen in impact consumers the consumers been not impact It's on And penetration like around behavior. media HIPPOHs, with you our category trade growth of down. others signs consistently. as the seen really seeing and in see it your We're the not consumers not that it slowing is on media productive. be growth, productivity. in penetration changing buying start see first also seeing their you We're see you the extraordinary. very one to Like seeing and

having significant 'XX, think 'XX. of the of the of I And those changes think honestly. in any you're that than less those seeing rest any I affected has not impact course over the I that anticipate we're mean, the think going that to see I quite category. impact them through of we're I of worst don't over So most year, this

people people And category forms for standpoint? healthier and and more question process many, you And set from food and for years fresher, where set. hear The believe things feed tap that's I and that's something they about second they should diet. we dry inflection -- part what a that to point wet be A that is less these one an been of in into we've been tried is, around and how what of consumer know is I it. we're foods. this a your many a are processed decade mean, about eating more think the they moving

themselves they thing. not, for or that's do whether Now, it one

they of into kids that we right? seeing do be talk And concept. a strategic we're will the their aware doing and everything of hearing and us more and change. to you're make willing turning And mainstream are a about it Now, for people standpoint, more this become that from pets," more "their

curve about that get majority even So [indiscernible] halfway we group. still we're innovation how that. into time and early majority, starting that we but not kind We're to talked think about through through over pressing of early

small like So a we kind the dog making on in there's in the to in was end there We fridge, a think aisle. And were at food. aisle that That's a people make for do we believe where a really to nuts that pet of do when used the kind statement of is at going the of change look retail. multiple in starts way, I us an statement. now fridges it be

advertising Our about is statement to being our communications the consumer I idea. more the statement. and broad, it think makes And makes talking from a availability way we're it a that this a mainstream

years. an been for happening it's it's inflection So believe and we many, many do point,

Operator

JPMorgan. is question with of the from Ken line Goldman next Our

Kenneth Goldman

I know longer a year maybe you've guided capacity just and million kind think target addressed I guess, of get of I 'XX to you'd I now rough and sort CAGNY maybe [ in sort of and term how XXXX? of 'XX, demand think the whether of 'XX. of a million -- since factor I'm this I to better in, of sense missed certain year or if plants of and between year, $XXX you if bit to or little wanted numbers to of don't CapEx light or -- efficiencies a kind ] sense as to created, get of if you've of trying $XXX are rollout have, the better kind previously, in updated think your numbers officially those sorry, those I just some of have it. you so.

Todd Cunfer

Yes.

consistently be we're fluid. putting So the and of Look, the spending numbers the and investment. timing continue it how all we where we're optimize to to try

officially. given think we updates I right not have now,

be way I to it's think years. I is over the going next several think the it of

$XXX in decisions million million But some to is. is the point. that $XXX this still with range per at estimate that Somewhere $XXX I number talk to too probably 'XX We're to exactly there. million early pretty think about year. a making what final million good $XXX still

Kenneth Goldman

just All And then right. follow-up. a

Brian's was question on media it think I spend.

it right? wasn't. sort the a the on this also capacity, me building if products. brand long getting organizational and the to not get year, had And capacity maximum your Forgive flexibility sense the to you produce of But wanted capacity desire actually better to balance I of over term you yourself of ahead and have between that

of about not the want dollars? to number that of minimum spend it? really for there terms in a kind is Is media to the Or think way you'd year right

William Cyr

to typically increasing we so media with in sales. Ken, guided line

is long-term sales. ultimately be to Our X% of target at

foresee X% So our X%. running can in the below we little as meter need case. circumstance quickly we sort year really XX% see where we the don't this get next in. within where would I towards year to guidepost, I or how it's level. don't see that back, the growth But being sort situations we is trading is to we're that that's to ourselves to heading X% a would see drop of that of range a and manage we capacity, hot X% where

Operator

Baird. Our is of line the from next question Peter with Benedict

Peter Benedict

on the back consumer Maybe, behavior. you Scott, to

that within you innovation, at products change per consumers store. maybe Now, the little a that to to additional you seen are your maybe how But said you of much the bit, have, pull hadn't back responding all. alluded you SKUs to guys portfolio

to But That's about about about how you -- think you Just curious my mix as pricing do on you mainly kind how, is volume. XXXX? growth that year's next more pricing know, be of and question. and going first think

Scott Morris

Yes.

impacts trading shift the been private products. category very has of it little there overall. period label think has some moving people Peter, to where have I more in a a quoted portfolio a in in around And people people the been industry the interesting changes down, and bit So

at We really have not seen that all.

We that. in any haven't business around significant seen our whatsoever effect

So model and I plans mean, kind been planned, -- I our I mix and say, that how not in consistent have changes. set and out amazingly performing. we those everything know we've that just seen of overall are topical. is very with line But it's it's We would the

I what product our of from day, spectrum quite new is things per mean end products new effective that we per both them And feed highest performing things of well. feed day, the On are we cost the of product and that both cost to front, kind some by have on of have of ends on growing the are and more the standpoint.

different are we're on margin Like products we're for formats more seeing on some little neutral good on them bit -- again, growth but of end. a the than better very that performing mass, growth are more also And are internally. the seeing of that in the others. in of products. high And Some us cost-effective some

we're what that's and that, behavior encouraging super consumers point. and that's it's this think the seeing we're seeing, I dynamic from that at So

Peter Benedict

been have out, lot of of maybe folks fresh No, of coming of measured think dynamics, just category out for next good of the various levels kind That's over expect of the to seen sure. a where I they growth color. category. the XX% few are frozen be then broader success. guys cycle start And question us that broader the may of sense category. But And the that you guys a today? and there's you then mean, we've you would on a years? just category in give What competitive the

just So kind curious view broad of category. the of your

Todd Cunfer

a really to decade that Freshpet time do over well over ago, this Look, set we we -- think set out ago out I build a long to food.

a in coming of lot that that of us. have are been there kind behind I people think

piece on we and when a And And we they've model building pieces, very a at million, XX model that it's but think we a think nice of the TAM I we a We're really a we offering. long think to job opportunity. that there's not direct-to-consumer fortunate That's piece. ability nice Obviously, very business. talked at and know continue of it and total has currently that We -- in frozen that's household. done about where way to we've households. million we're those grow. think opportunity around look go to lot XX.X and the million how a inhibited our have know penetration XX.X there to of constructed our different long, of our very, business that constructed is is, It's sold almost the way brick-and-mortar XX% I a the fresh still in different

time, we've I the buy -- we of an of it's a before, have our what I time. probably we kind buy over covered think long Within rate, buy of opportunity there's we as the had that's long period XXXX, think over On period over literally, and rate, in. a to $XXX double think rate, penciled

So that's going number. plan. of $XXX been our type kind like towards Today, XX, we're at we're and that

HIPPOH really what buyer into are to been consumers lot and that's I our or is heavies to starting the to over focus. heavy think you're think continue about a we rate coming that there improve our the time. the is super talked opportunity business, We see

is think see pieces, there's on be on next I been time, So lot category it and of fronts, plays opportunity. a think out. couple of I how The I a will interesting to a really changing. It's both both fascinating years it think

Operator

of is question Stifel. from Astrachan Mark Next with the line

Mark Astrachan

growth. that you the That's those especially category? under become household and exceeded opportunity HIPPOH, a it's drop if of my the accelerate you I versus you about cycle the HIPPOH category the the think 'XX, guess, conversion penetration kind adoption? or of really the that firstly, those today? in first on the right, of using bring Sort do those are more need last overall what off? million. just into of in those that of brand I casually first guess, nearly how question. to penetration consumers you that and talk years, around see HIPPOHs to life Can $XX now, Do do household about consumers couple XX% is maybe consumption and I HIPPOH from of guess, from math

Scott Morris

Yes.

for -- that it's thanks question. So

million about you of added. last our increase If look X.X at it consumers households year, we that was total

grew On XXX,XXX. that group not by HIPPOHs, over the we

consumer computer in and and type -- you the innovation availability great kind people accessible a So quoted when order being becoming and an consumer category, can for literally couple year, really just on are had fundamentals it online there. amount, facilitate making being consistently, I and over ways incredible the consistently it's trouble of versus go rate on like which experiences, of where XX% by Mark, we've And your also huge us, consumers, bring so in think, broader anymore, phone to last do growth make growing correct, significant more piece not having stock a a our great But in easier continuing those you're all best HIPPOHs. perspective, of business. the developing or XX% the their by or to from or number literally, being getting stock it of years, e-commerce we available but and prior easier quality,

Now, see come them we from parts. X

X them -- become they of in immediately that's One their They've consumers months. and changed just groups come is of food. HIPPOHs some to there's and within X that literally dog

those don't mix can dry. wet are where it see in as meal. mix, fresh, that what and HIPPOHs and the feed and moving a more, it it we the different use top that a your you a And and more, wet category, up and main and people they mix in mix become because group people food Well, fresh. with and literally other replacing it mix a of as exclusively, of topper down people use The come behavior with the fresh use it's start more, core are was dry on and mindset lot

having will help we correct different is I kind explaining believe that groups. to HIPPOHs X So it from seeding thought And fundamentals of people, see that the that, the what our coming time. over and just

Mark Astrachan

helpful. I That's a of yield. don't surprised the the guidance ago, going back mix the leading was it's question. and previously Ken's X and a adding it. existing Todd, years maybe sort have a at it now planned think question, to, to line. -- guess, the I then But for And I of of CapEx you new the was lot site, remaining the I maximizing talked the Got same of sort think output about lines you capacity few existing Bethlehem was example,

technologies. You're more efficient also developing new,

the So costly? that you're said, guess please? mean, originally all is kind spending CapEx? And you are that going more being that of output same it I I of than the expected? on maybe Or me, still I bridge why to is for less have you answer guess,

William Cyr

Billy. this is Mark, Yes,

a timing there's all, a difference bit of first of So here. little

really the So that 'XX, in levels has impact we're the and have spending capital 'XX, 'XX that 'XX. on sales 'XX, doing between 'XX we'll

So there's timing little here. of bit a lag a

technology Second we that is alluded to. the

assumed we bullish it, plan. We long-term from are benefit very any have that but our not on in

higher it, for get. throughput there we and going guarantee spending of the that efficiency have the but have we we're get level necessarily So the to we

effectiveness. It's been going then in going benefits the same bullish We're If that's we're be the we talking work And improvement said done. And could on to us. that economics. operating we the to improved if are do, going to -- [indiscernible] we we're very it's get the of be have about, time, the do growth that's through. net make better planning We're to push benefits they But the cautious forward. more a out. those come benefit to to very we do, CapEx capacity want enough about just just the ramp capacity If not to at same being did us. that or were the going assumption

Operator

with of Andersen Our the Jon next line William Blair. question is from

Jon Andersen

about growth or haven't expectations we your largely the different couple referenced apologize the of fridge how on outlook -- Should growth, I for XX% placement if You least mix you question should ways? it. really XXXX. We if about volume-driven. think talked sales at Quick growth, did, for I we store a missed

could bit there you expectations about your fridge a distribution growth little talk for If placements. additional through

Is grew a from that to in measured then expect a you in perspective, substantially And and would XXXX persist channel why? than non-measured dynamic as faster 'XX. that well,

Scott Morris

Yes.

me brief, perspective for I sure think interesting. a at but I second just touch this, me from And might it's to and it. and this Billy But a Let I'll try look grocery standpoint. Today, a lot, talk about let on I'm first. be add

brands right? we're standpoint, that XX% ACV, we're by [ other and the an #X And #X in from ACV the that's feet. and grocery, X in typically the ] So are All brand. far in 'XXs

double coolers, grocery, double X,XXX stores So X,XXX X,XXX with have we coolers, coolers. across

add mean about that's extraordinary sitting the have front wider in grocery, in So we you the ACV, presence a I -- that, brand on when That stores. And that, pretty of and aisle. most that us opportunity SKUs, in brand we feet opportunity gives increased leading add but upside in with in in us. in do the of dollar X variety there's start we especially about upside have like because double to only thinking are total, cooler total sales leading right, standpoint, think

So it's pretty amazing.

Like total mass, across double to In coolers and have Walmart second. XXX we now, for mass switch Target. a that's

amazing, opportunity too. the there is pretty So

we So coolers. have But mass. have double around distribution few very XX% we in

ACV aisle. So think that the products. more the but cooler that broader gives variety we not side, It in of the gives double visibility us only us on is opportunity TDPs, on side, more of

And of holding SKUs, can over the stock. And some they're a add lot more on some our other power because of weekend, of more these importantly to in key constantly out those. us a stores, of course allows especially holding that's power thing have second the of we a on fridge, it if

an feel developing which ago, opportunity, with cetera, touched that about few et Canada pretty being the ACV's online, we all terrific opportunity add [indiscernible]. U.K. a minutes the from So on years -- we it's behind

like said, of existing [ coolers. driven see growth sales stores, being same-store all ] model is low sales. to Now our majority typically up existing We and that XX the high teens same-store by with

core driven an ACV advertising, a but it. so growth much standpoint. It's of that's upside So from there's cooler from by a and the the

Jon Andersen

But you talked about...

William Cyr

on Actually just -- unmeasured Jon, X the measured. other thing versus

strong at point. of of second we as the the at we It as that growth point lack I unmeasured store expecting the second was first see the fourth be in the to awful this in that Costcos half X XXXX, about lot can have year of obviously would you least 'XX. than that, We're continue in in the We performance half. It quite it quarter, of had growth won't to are the heavier as in half call add see. particularly We'll X benefit an points. in

Operator

next with of of question the Brian The is America. from Spillane line Bank

Bryan Spillane

X up follow point. So just on wanted quick to

key terms mentioned on levels key the is, on right? on on to a are sort guess, now stocks And periods where Can you basis? impacting response on just update I'm in table I really the of stand it to think what last growth, because in regular trying still out of Meaning, SKUs? in-stock sales just stock you some just question, you out drive at are on I us SKUs. in of you you're out-of-stocks key leaving of still

William Cyr

Brian, that of if at the high keep out stocked the it's store's to adequate Yes. a function in store fridge retail, an of velocity there are the at stocks and inability level.

the the Our fourth last since actually, actual been of XX%, the quarter running rates shipments we've part back year, customers, very of XX% consistently in our year. fill in to beginning even the of this last

customers. And matter so how of fridges. supplying the issue of there's really with an to well the not or the a It's shipments on the replenishment our stores execute

Operator

from the is of with Bill question next Our Securities. Truist line Chappell

William Chappell

another you but existing, mainstream, about at stepping going or get conservative year aren't households we if even different being back guess of Coast thought just IPO, West original been inflection talking this going And the the kind more we're kind aren't about then you the why Scott, mean, now as future? to Billy, somebody I Coast Midwest, how way, X the going another to we're up? asking things next gets and be XX on and Bethlehem, a X? to or point, going and inflection we just understand West build you've of why million it isn't I an could more talking out year point, the CapEx be and or before then the there. how add talked about was, we to things going more you're an And I U.K. Canada. demand in facility facility add on the and we'll over on Why greater maybe to the we're

William Cyr

a it's good question. Bill,

described existing we're our doing of all, as X prepared the the First we throughput comments, maximize the things on in to that footprint.

existing the ]. on the So first lines, is OEs [ drive up

to ways and central more as in so we lines part to them having The construct infrastructure. each that docks facility, second utilities, loading of on our all whatnot. wastewater the avoid treatment find of is Think sites, get

third part technologies. And new is in investing the

allow growth if know within we've almost out our we got goals technologies our infrastructure this us growth what all we it, at, on maintain until call way can the planned assessment rate. we Our based today the XXXX normal that meet point the at is have that that, XX% to

The grow we little ahead well were start our might found, and we growth staffing, executional been, of hire and capability, And question on why ability wouldn't at people. of in level, to you if execute very ourselves XX% even have to get and then rate bit we to construct be the faster? engineering, a we rate, an around design, we want go faster And has train trouble. think at facilities, that organizational could comment meaning the push

rate. we prefer stay so And to at that

need form needs, if that believe, rate, until And meet footprint -- we -- another so our some which if point technology had if at would we other look stay of we site other another at haven't to we existing our intervention. will about any XXXX some change at or

William Chappell

in just it. still I on there's opportunity needs in you Got And that does going other put existing be foreseeable your of somewhat I know, the like capacity backburner Canada guess Europe. meet constrained to the future? you're Because kind and to and But U.S. the in of related, places kind for the feel international U.K.

the be I starting should if kind tick? you So Or way saw be international the additional looking of is at would to it? that some there CapEx

William Cyr

good North American an last the But reliable. from is the focused We've It the was of more that It's a Bill, business that. very really All years of a our issue. and wasn't robust U.S. cost most put very should very supplying couple business. not issue. have on asterisk business over European the that I the opportunity. Yes. behind a it's concluded reliability was

us to alternatives We we a with. So in been that, on not be clear But reliable greenfield it partner do would very if on part. source do we a own that would supply development find were we that would have of Europe. coming our operation more that out of give a are to

capital would want we than are suffice much U.S. lighter down what on to to if saying greenfield the don't that. any to we that out doing path, the build say, in so go But it to operations And get were much, than further be it we

Operator

Michael the Lavery from of question Next line with is Sandler. Piper

Michael Lavery

on touched how run longer at And from have adding if a be sense way Is something how the ways just of the or stuffing that within reach could some changeovers? But you're You've how in anywhere much can technology us you place achievable could that lines times give you for of looking have. you better there opportunity could efficiency and a having to reduce impact? so, also and an be? that that can

William Cyr

of more line second pretty second the Ennis, that we of And that it's lineup much, fourth that now quarter already run Yes. we Ennis, when is interesting bag changeovers, lines point which line in use run and much a not do the forces we runs, have to now get of X you a Michael, we at expecting and them see benefit we're to have long on the start a high-speed We're and really lots -- line running we describing line, to don't that productive. of see running benefit the time, lines full rolls up similar benefit and of rate. but up produce it's in at you're the Pennsylvania, last a product and Pennsylvania the because starting in started changeovers. and very entire deep smaller lots judiciously, we lines lots the some single year, it's because in good in bags a because second

in we build site more so is specialized, we going It into be seeing we're lines the very forecast are the bag start-up of on modeled that. going is a from belief of our indications the Ennis. think and so enough to we could that benefit forward, And second already we significant as that early out not but based Ennis our get we more see line and

Todd Cunfer

Yes.

X up operations, So Bethlehem, we just X in South Ennis, in in Kitchen that. XX to X our in have follow Michael, facility. on Today, lines

XX fast over of -- couple forward years, You have a lines. we'll

we're that there's X just point, off Billy's be amount there's certain to come. mix SKUs that we that, of get at to under of the sure they're having believe the will And make looking portfolio as imagine you think the some there'll early to literally. the And be will dedicated of X the to on SKU and to can But seeing or not put we lines efficiency we're tremendous benefit constantly then that extra just upside. optimizing facilities. more burdened of a well we signs So capacity,

Michael Lavery

a targets is haven't any And of in given you've or you how you going said that that benefit forward? your in, modeled of terms as

Todd Cunfer

No. yet. Not

Michael Lavery

follow essence update on on that's is And that's of complete the you up then us just nutrition it and launch. playing you just going? an And how to had of a give expected? Can And how role just kind that grafting. hoped

Scott Morris

Yes, done actually. little actually we anticipated a than better it's bit

to consumers. around us. product the neutral that, to I is So accessible, proud in more the something we a little to put last want going work some great make what portfolio bit in order do was wanted again, incredibly were formulation to bit little we're a of. margin that react that We year But market. affordable we provide say to And more able on to for in to

dog that In I fact, night. last my fed

sales in, and bring well. we've able they're of consumers to been know coming It's really into what it was been seeing seeing in trying that nice that and new exactly We're we quite see the franchise. also to product. amount consumers on designed do, it, done it's -- And nice we're new

do, that to it's point done might So over around is and else it's on performing we're portfolio consider there continue we the even designed where well do we'll to -- anything the what to time. it we've

to asked, decreasing the we're actually of it down our the over -- months. to and next actually, be But we more the number tail clean are SKUs we question bring as efficient up our end to going that of of so XX production. can was we the things, in our adding We're last XX are kind

Operator

is the with Robert Moskow question Cowen. from line next Our of TD

Robert Moskow

things. quick Two

your XX rate you're but $XX the increase? bumping target, that your pretty a really internally mean now year you're it And year this a have needs And you've Is the penetration this up I then buy -- at household against increase number. you have the to in this I needs number quick go? will ways, that assuming rate to year if like And rate where at mentioned to as think where buying to answered is and have XX follow-up. a You is and buying different doesn't that target's XX. the substantially really do

William Cyr

that said rate. of XX%, is growth sort here always the rates We've range, then XX% and algorithm X% range, have penetration growth to call [indiscernible] that up the the, X%, in gets rate in Yes. long-term and you it, XX%, the that you be buy

right, to you're we So grow. do need that see

back share part because big whole the earlier, that pulled of the comments up. increase in They're pull but of the of smaller obviously do number Going HIPPOHs portfolio portfolio the to from the total that a obviously up. is business, a they

rate will rate see growing franchise. so do But the mid-single-digit the And we are addition as we increase go to of in who it, up right, call buy to the, the buy the number consumers range. you're need the in in HIPPOHs,

Robert Moskow

the this didn't then looks sure mention repeat lot a great. was And year it Okay. today. trial. of where I is is, any But of hear I'm follow-up a there data

a advertising You're lot.

that your are of who would the competitors this hope at first for rate was One repeating make that trying sure you advertising they you the are to What lot. at internally it do a data people look the that would? time

William Cyr

higher. strong it's a say, that's the the source, to in lot at the metric comfortable to we're of But rates be maybe and seeing to us change haven't talked at, get need that it's either past, we are we're that, on data a to in Suffice the [indiscernible] new line X to Rob, we has different with metric, source ourselves looking which of and is are was that been just repeat the reason available no and there's it -- been predictable. growing. consistent sources about different the sources. are part continuing there they've where matter lately in rates confusing we Yes. kind look just data repeat data It's a

Todd Cunfer

you was weren't strong, if definitely see if And -- would they it that.

see wouldn't are. they You the growing like HIPPOHs

Operator

question Our with next Gajrawala the is from Kaumil of line Jefferies.

Kaumil Gajrawala

where about Lots practically? that Is few you seems terms, spend. dealing you how do that practical like with like how talk number. do to of your in one it growth asked what But just Obviously, maybe you media seems is given the a is? conversation that been do you times demand XX% on -- it demand Can managing are. around commitments are -- thing how that's retailers,

Just -- nuts of bolts and that that generally of pulling managing the figure? sort

William Cyr

growth driver biggest the [indiscernible] rate Yes. the is thing do By growth to to far, [indiscernible]. the rate media we manage our to the have of and that

we quarter, so year on of on basis a when And through. of the down this and fourth because like year, literally we and growth, we're in is go fourth they purchase that journey sort quarter, we in that it saw money start but acquire month-by-month the looking in penetration felt the while in consumer consumer particularly some the basis because we that looking quarter-by-quarter a did of across out at first benefit household the spend they're that quarter the the impact know real

manage we that in literally line and short spending our ourselves to media new that really do X, our have a in to in QX we basis up and going to we're think line to a manage gets shipping. on basis. for example, to it quarterly position capacity, make Phase before we the QX don't as at rolls monthly order So QX, and look the Ennis rolls trying we in have a And sure get on about

part time That's customers take driver. put both our long really on plans because part. don't do what their we biggest those regulate really We in our and a to with the place

is do really our the manage we so And with media demand rather investments.

Operator

of Our with Tom Citi. Palmer next question is from line the

Thomas Palmer

to And last the than mentioned of it's target? how logistics we long-term kind into guidance you Wanted guess, to know I reversion side, quarter, ask is do as roll we on the assumed. embedded been XXXX, long-term running about in think this lower progressing? more of kind XXXX I But outlook a your of favorability.

Todd Cunfer

decline year-over-year, our of in will cost logistics. structure have we Well, the a No.

from from huge obviously, what looks opening that's fill Billy everyone obviously rates, efficient that benefiting more lower which well. DC, mean, rates, paying benefits. our us are Texas future. lane So makes the and second we're that miles, obviously our like less mentioned a I wildcard lower full, diesel is and always benefiting, in as and trucks is

steady with there's think But favorability rates, to the some market still we go.

some be very little impacts we're forward. will rates that term, going around than will bit. those point, that inflationary better at road, sure I'm can the there long confident do whether this So we a the very, down move X.X%, But

Peter Benedict

asking to And Maybe bit are capacity way, volume progression. on different growth. right? then to I a You wanted up Okay. just it a of your ramping follow

I assume see over a absolute just might point would quarter increases of sales that Is So of from a on a another? point the sequentially scale the course we there bigger in year. capacity given level versus sequential step-up rolling X the just

William Cyr

the understand -- we've our what so question the real with focus is rolls here correctly, match mean if capacity. capacity And I sales the managing -- But capacity our that normal I to the are. guided up patterns the we're

the Our portfolio. business across grows evenly quite whole

a of And as the little that have start the is start first very we you I difference for the the unfolds pull year, hot, year hot the X a going cadence line. rolls It's limit very just cadence spent the but that we're bit this going quarter to we in live media -- the is quarter. normal the that we're the we down about to because think And think fourth so in as to to capacity on have within year cadence.

Is cadence. that's going? question of asking, think is sort the where the you're I that you're

Thomas Palmer

Yes. Yes. That's helpful.

Todd Cunfer

higher. quarter, sequentially, just quarters rates be growth will sequentially, the slow will the it absolute dollars based way rates see increase. on. growth we the now, it amount, The right go as on every the now, will dollar Yes. capacity, the we differ. And right will believe But

Operator

Research. Edge Consumer with Rattigan Connor of line the from is question Next

Connor Rattigan

users and then to meal you've to to increase mentioned, convert So one, users. penetration, toppers household convert HIPPOHs main

rather the to user? adding So about see if I but where incremental all above, where pick HIPPOH? what opportunity? user I greatest or were consumer and greatest to the it stepping be you'd see? a could us main meal just a to thinking guess So a user? help I you a guess, converting the see forced back would know Would maybe you you you say Converting love you just of an understand rank opportunity, Or LTV, topper to

William Cyr

Connor. Yes,

I the way we to households when adding we media. our of many developing believe on be about focus you the still focused innings households, really you're that's the that bulk think this of going then a So the and you early of is is are, as as category really as in adding can,

stages But early is as driver. toward and development, business. you important this will And of the rate. got, increasing households. the the the time over happening and the at turn your those for rate of into us it, more we we've further on right to presence naturally is most driver many assortments buying whatnot. that second we'll As households get today, attention into time, on that biggest But is you migrate still within the focus now get and that household penetration fresh then And based believe category product buying #X the fridges

Connor Rattigan

touch digital I sense. Got as it. Makes commentary to well. then on on the orders wanted And

you Bill, online. expected noted think million XXXX sales about I and in $XXX So

who sales? missed of digital representative And if I quantify some I consumers? your So you migration it, also, wondering, right, is the I cannibalization too, I'm sure consumers just that is are, not expectation but guess, the expected I'm continued guess, current digital did the adding of just size online? to orders from growth in Or digital-only I guess, incremental there is or, brick-and-mortar

Scott Morris

main however you as the buy usage. So products. to make main it and to that to think to is you're consumers about as it how possible available as I overall penetration, less make but be And to increase everyday -- friction, want -- to going want think easier way kind our also when that, available we of increase going you're to you the

shopping shop is are are that and piece like add we of definitely following we're grocery are what And how the as fresh and ordering as digital, So frozen that. -- their fresh And just for it overall, kind orders making for buying opens from up trip, around seeing biggest people that we're we're when of is that easy those consumers and and us. opportunity that local more we're shopping. consumers the their included way, that's in really what whether when stores, sales basically we food to getting they're making more more

around a basically bit to basically makes us. for it more So it little convenient for shop consumers

I both of on it's it back mainstream -- more and So a this to it we're meal. think the main goes also the turns into helping

real digital opportunity. think I is piece a

Operator

line the question next is with Our Salera from Jim of Stephens.

James Salera

offerings? ago. second percentage count I around XX% could the stores have was start Billy Scott. fridges. sense get to XX year In have XX% and think, SKU a highlighted, I that for third Billy, it's your to to you you presentation, question and then you think continue how the or guys a a from as mentioned ramp off, to big for And third script, second you of fridge Maybe combo Do up in

the SKUs what be, to third that Can detail those you continue maybe increase and some us give again, typically and fridges? you are could think SKU what incremental on number as you X second

Scott Morris

second honestly, like at and there Every most year, this, feel we greater opportunity when look greater we a stores. fridges, quite is and to have

grocery, ACV grocery. for XX% a XX%, grocery X,XXX on I you we're I'll double in earlier, I XX% And talking were or we know, of an So ACV. mentioned average second, in pick we that think fridges have

wet at -- even I XX X why typically or no we single There's XXs, is is couldn't we look you stores store some reason in has is total. or of new in mean, tight a over because of you reason fair think couldn't in XX% and we this -- amount most category about the wet, this ACV section -- a or the why into maybe if period segment. every fridges dry have And feet. it's there then and space. a new it you in is, time, way every what no be And grocery, look XX%, a basically second

wouldn't there in be that why So over fresh time?

to into have to that's teens. earlier, that we Exactly go And out time. our plays our it will that consumer. in the awareness, over lots it how we we do biggest And get is definitely of back growth number So great want we touch lots sales driving like more using people, always educate same-store and to single vision. have when, believe we mean, penetration, kind to projections The media I the is and that's opportunity. there around and of think a high longer-term I -- of but mentioned that's But I ideas a mid- tremendous. can And opportunity creating XXs. And driving I it.

really when additional guess, the So from. creates that's core of a power, products really growth holding we SKUs visibility, create to want that you have over it second it have, make the additional where an sure of SKU. I And portfolio and want it consumers our comes to basically We coolers, creates SKUs. add that right We does those don't to appreciate.

don't So over to want SKU. we

kind would I enough see than the to we XX even average fridges, holding in no store So have make would in more sure of I power. SKUs double see the

James Salera

could Todd, question then, for sneak in And Great. I if a Okay. you.

front, the midpoint margin of I really is a if XXXX a about have EBITDA still target XX% X at lot to XXXX, guys XX%, implied between On numbers. a this progress, ton But kind chop made you wood for to the job those year. good did of the compared think we of think margin margin

margins to cadence expect when goal, annual getting the inflect XX% to where about that more of now? think are to we we compared should significantly As we see

Todd Cunfer

Yes. just we need I do XX you mean, if the points. look, math, another

line So X below given, below then on least get XXX the up about well. X as at and we've based and top or we'll gross XXX so in margin guidance the

little before, we're be. as to -- we up next XX% at cadence to which there. if the honest, years, over If the up first I'm of to what is gross points a or several to an if because that but margin numbers. a at we margin, this think pays time, better. we're said know to do pick from exciting basis or getting And hundred a look, points the exactly that But upside disappointing kind there's XXXX I've So going in some can XXX basis those get of potential be we'll XXX Not ] double we potential that upside. think little pick a couple EBITDA line, XXX work and is year not pick or bit of is a XX% the we basis can off, point, margin [ we're a that so do smart efficiency -- points be going for or more us. Don't I digits every to And there hit bit it'll there's for enough, that couple EBITDA X up than I of if target. promising of we're obviously doing

Operator

Our question John from next comes Company. of line the with Lawrence Benchmark

John Lawrence

be of -- lot same-store it you what as we be Walmart Can What units, determines quickly, continues continue growth retail you expands not that? would to you of speak build partners, retailer and you proved Or model sales. a out, at mass the and are this whether Does to to Just or objection? obviously, about new when to facilities? part grocery. -- they at market I old their go works, would mean, those what -- be point, talk go?

Scott Morris

order all then And pretty say talk think, for how of really, in serious. is this that often. And but I feedback to the It's love John, category with segment, the amount we today, rejected a I and interesting to category we're on a get And talk I worthwhile. lot. makes for them, period important we're very too. I'm And make sure working also a we're would you're of constructing partnerships appreciated. yes, I question for that, them, team. long, actually XXXX, our for being really time, get meet long with XXXX, how retailers when that thank sales often, is to a it you building, the that team XXXX, retailers it the because productive I I in this sales the

say a different few has very -- everyone they're think that So it's I it. would I And objections. at pace going just there's

they set do or reset? easy. major couple in So when We're do they category not -- item items a pulling in out. like do of and an when That's a

a in. You shelf store, involved or really lot And thousands X off stores, it a complicated. there's just hundreds not gets In fly it's in it putting fridge complicated. in that of

drop what then to and an gradually. want is around So just in and There do when doing store. go, don't year do seen same if they when go because to fridge drop times ahead you've do the where store a to a line whole the and around to things moving typically the do and resets And or it, major they in, want they're are category changes and literally months have going it they're they to have thing we're electrical things later, want again. other X move those

hear we good part. nice but very long retailers. we I -- really we're don't time, think that few a very, really hear most I a for just there's the and stream I mean, them we to heard So -- it's cadence continuing for with very today. out a roll don't objections steady

John Lawrence

from is question final of Wells with Marc Fargo. Our Torrente the line

Marc Torrente

'XX. the real flow good free media and in maybe throughout on growth of progress thinking working best Building leverage talk discussion, the effectiveness, flow Just levels this cash the you targets? through what's here towards saw quick. plan media then longer-term you about some and strategy operating and efficiencies 'XX cash year? are And the progress How about

Scott Morris

is we lots interesting. it it different the and targeting obviously we've I is find we do different And call be media, consumer to try consistently lot a a -- really and productive cycled of to media lot do through It's that mass thing So of of groups. -- the and but that do. and won't effective most lots And we

because see demographic our you target to most not target and literally, a but about a XX up women b, ago, male done only, on, So kind it original were XX past was not of a, the months start And on football, part. for not what probably you because see for is we expensive, was in into example. was focused the younger probably expanding a the also started started we conservative it kind was to show to We which male of demographic. it had it

of commercial these watch other and and some different football, text they and see has day one we hadn't were that golf I And And women good we football, we The it, really productivity, them, -- continually -- commercial." into golf." again, "Oh, of on we're seen had types months, been we we a "Hey, did, it type I are said, Now new But to expand. said, people. a of they some what from got for it's to but this got we saw X consumer obviously. I was someone of to continue seen commercials, -- were running reaching means when new new able which hitting consumers groups. literally, expanded your I message the

TV, it's use #X we mass of productive lot been So most a our piece.

also -- a that We very, and of to it do OTT our the team have an the media incredible high with would internally, honestly. second And is connected TV. I we very hold also partnership we analytics level do We buying. work with does say that standard. but in CPG, an [indiscernible] external behind And quite

We're digital. going you're kind and do expanding in We're into social. We more more. see more next too. XX to to PR XX more months, social. the expanding and And lot do a do also of us We definitely over

to literally, able to and media needs So the be want organization productivity that we And X we're we're it, how delivering, at months the going going being deliver grow. the areas. to be anywhere and to test by test we're we're on our between I the to that we're goal messages we to we're this I to in end And of to there we so the it year, going before to get mean know definitely -- continue know is, forward pushing those of is XX what be types what into executing.

kind very, very planned we and really, and from media So around investment doing be, we're a and like, really try of media professional and and thoughtful what standpoint. out spending

Todd Cunfer

had beyond back XXXX we strong was but thrilled to million. about bit cash had there. EBITDA, was also some some than little issues in a got in with of line. cash look, kind flow in the how the a We we a XXXX of We flow capital capital when 'XX, up gain that From working perspective, ERP. have, benefit back that operating are would Obviously, went working in $XX was we higher normally Yes. we that onetime live

into the we'll around going going again, probably benefit spend I be $XXX million CapEx. to That capital. operating million year an million cash the end from implies I And cash is end we this of year, to $XXX that the almost of have flow in working balance million $XX from think about as not because around have cash for where will $XXX-ish we're we're going said, year.

puts So beyond. us for in it position a 'XX great

Operator

Thank you. for question-and-answer remarks. of end At the Bill now over reached closing turn session. Cyr the I this time, call to the we've

William Cyr

your This you which Helen thought. to guilt Great. your cannot no attempt feel from leave it. you dog you your disappear is much. lunch. your I'll as the so Everyone, you To guilty interest. A fast make I Freshpet. very dog would add, that well-trained as Thank thank will enjoy Thompson. for all make very this will Freshpet, just much feed and share It will

Operator

conference. concludes This today's

Thank may your a have time. at You participation, your lines day. this for and you wonderful disconnect

Freshpet (FRPT) 26 Feb 242023 Q4 Earnings call transcript