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Simply Good Foods Company (NASDAQ:SMPL) rallied on Thursday after investors looked favorably at the company's FQ1 earnings report. While revenue was down 2.6% year-over-year to $308.7M, the company narrowly topped adjusted EBIDA and profit estimates. SMPL's sales performance was driven by Quest volume growth which more than offset Atkins softness. North America sales rose 2.6% and international sales were up 0.7% compared to last year. Gross margin was 37.3% of sales in the vs. 36.9% last year. The improvement in gross margin was primarily due to lower ingredient and packaging costs.
Simply Good Foods (SMPL) also reaffirmed guidance for sales to increase at the high end of the Denver-based food seller's long-term algorithm of 4% to 6%, including the benefit of a fifty-third week. "We continue to anticipate solid gross margin expansion during the year and meaningful investments in marketing and growth initiatives, as well as organizational capabilities," noted CEO Geoff Tanner. Adjusted EBITDA is expected to increase slightly higher than the net sales growth rate in the new fiscal year.
Weighing in on the report, Jefferies said SMPL is set up well for accelerating results in coming quarters due to the higher level of shipments and expanding margins.
Shares of Simply Good Foods (SMPL) were up 8.22% at 3:46 p.m. and carved out a new 52-week high of $42.99.
More on Simply Good Foods
- The Simply Good Foods Company (SMPL) Q1 2024 Earnings Call Transcript
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- Simply Good Foods: Attractive Company, Tight Valuation
- Simply Good Foods Non-GAAP EPS of $0.43 beats by $0.01, revenue of $308.7M misses by $0.58M
- Simply Good Foods Q1 2024 Earnings Preview