Simply Good Foods Shares Break Out Higher on In-Line Results
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Simply Good Foods (NASDAQ:SMPL) reported Q1 FY2024 earnings results in line with expectations, with a 2.6% year-on-year increase in revenue to $308.7 million. The companys non-GAAP earnings per share of $0.43 beat estimates by 3.4%, while its gross margin increased to 37.3%, up from 36.9% in the same quarter last year. Simply Good Foods also reaffirmed its full-year guidance, indicating that the company is on track.
The companys management described the results as in line and noted that revenue and operating margin missed by a bit, but adjusted EBITDA and EPS beat. The free cash flow decreased by 21% from the previous quarter to $46.78 million.
Simply Good Foods is best known for its Atkins brand, which is inspired by the popular diet of the same name and offers healthy eating and weight loss solutions. The packaged food industry is subject to food safety and labeling regulations, but it has remained resilient due to the growing emphasis on health-conscious and sustainable food options.
The companys sales growth has been modest, with a 2.6% year-on-year increase in Q1 FY2024, falling short of Wall Streets estimates. However, Wall Street expects sales to grow 7.4% over the next 12 months, indicating an acceleration from this quarter. Simply Good Foods faces challenges as a small consumer staples company, but it has managed to stay competitive by offering high-quality, reliable, and reasonably priced products.
SMPL shares are up nearly 5% to new 52-week highs off the Thursday premarket release.
$SMPL(SMPL)
