Simply Good Foods Reports 10.6% Revenue Growth In Q1, CEO Highlights Rise In Popularity Of Nutritional Snacking

Benzinga01-09 02:14

The Simply Good Foods Company (NASDAQ:SMPL) shares are trading lower on Wednesday.

The company reported first quarter adjusted earnings per share of 49 cents, beating the street view of 47 cents.

Quarterly revenues of $341.268 million (+10.6%) missed the analyst consensus estimate of $347.367 million.

“We continue to see increased relevance and “mainstreaming” of nutritional snacking products as consumers seek high protein, low-sugar, low-carb foods,” said Geoff Tanner, President and Chief Executive Officer of Simply Good Foods.

Legacy net sales in the first quarter were about the same as the year-ago period and affected by the timing of shipments that occurred subsequent to the end of the first quarter.

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Gross profit was $130.5 million, an increase of $15.4 million year over year, driven by favorable legacy input costs and the inclusion of OWYN. Gross margin was 38.2%, a 90 basis points increase from last year.

“We have strong marketing plans in place to support all our brands in the upcoming “New Year, New You” season that should result in solid overall volume driven growth,” Tanner added.

At the end of the first quarter, the company had cash of $121.8 million. During the quarter, the company repaid $50.0 million of its term loan debt, and the outstanding principal balance was $350.0 million at the end of the quarter.

Outlook reaffirmed: For FY25, the company expects net sales to grow by 8.5% to 10.5% in fiscal year 2025, with OWYN’s net sales between $135-145 million. Adjusted EBITDA is expected to rise by 4% to 6%.

Assuming comparable OWYN results and the exclusion of the fifty-third week in fiscal year 2024, fiscal year 2025 is expected to align with the company’s long-term plan, with net sales growth of 4% – 6% and adjusted EBITDA growth slightly higher than sales growth.

Price Action: SMPL shares are trading lower by 2.30% to $35.92 at last check Wednesday.

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