After burning through more than $34.7 million in cash in the latest quarter, Freshpet (FRPT), a maker of all natural and fresh dog and cat food, announces a common stock offering that sent shares down nearly 8%. Even worse for investors was news revealed in the company’s latest quarterly report suggesting the relatively affluent pet owners Freshpet targets are showing signs of price sensitivity.

Freshpet raised prices in the fourth quarter of 2021 and again during the first quarter of 2022. The company blamed the price hikes for causing household penetration growth to be below the historical rate of growth. Freshpet suggests the initial shock of customers seeing higher prices on the shelf is fleeting and believes penetration will “turn positive through product distribution and media.”

If the first two price increases caused cash flush customers to turn away, it’s difficult to understand why Freshpet believes the third recent price increase currently being considered will increase demand by the end of 2022 as the company projects.