Simply Good Foods beats Q3 adjusted EPS estimates

Overview

• Simply Good Foods fiscal Q3 revenue just misses analyst expectations, per LSEG data

• Adjusted EPS for fiscal Q3 beats consensus, indicating strong operational performance, per LSEG data

• OWYN acquisition contributed significantly to sales growth, organic growth driven by Quest

Outlook

• Simply Good Foods expects FY 2025 net sales to increase 8.5% to 9.5%.

• Company anticipates FY 2025 adjusted EBITDA growth of 4% to 5%.

• OWYN net sales projected at $145 mln for FY 2025.

• Inflation and tariffs expected to impact gross margin by 200 basis points.

Result Drivers

• OWYN ACQUISITION - Contributed $33.6 million to net sales growth, significantly boosting overall revenue

• ORGANIC GROWTH - Driven by Quest brand, organic net sales grew 3.8%, despite a decline in Atkins sales

• GROSS MARGIN DECLINE - Decreased by 350 basis points due to inflationary pressures and OWYN integration

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "hold."

• Wall Street's median 12-month price target for Simply Good Foods Co is $38.00, about 14.9% above its July 9 closing price of $32.34

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nGNX2ZTGTV