TD says Freshpet addressed competing product from Costco

TD Cowen says that at a sell-side meeting today, Freshpet (FRPT) management addressed Costco’s (COST) new Kirkland branded product, which looks very much like Freshpet’s. The product is a six pound bag of chicken-based fresh product in pellet form, priced 14% cheaper on a per-pound basis than Freshpet’s, the analyst tells investors in a research note. TD adds that many new entrants in the space, including Walmart (WMT) several years ago, have failed to gain traction by competing against Freshet on price. The firm believes the benefit to Freshpet from Costco placing the fridges into its remaining stores will more than offset the cannibalization from the Kirkland products. It keeps a Hold rating on the shares. The stock closed Tuesday down 11%, or $7.95, to $67.42.