Simply Good Foods reports Q2 adjusted EPS 40c, consensus 38c

Reports revenue $312.2M, consensus $316.88M. “Simply Good Foods second quarter results were led by continued Quest growth, as well as strong gross margin performance,” said Geoff Tanner, President, and CEO. “Second quarter net sales increased 5.3% driven by volume and, due to the timing of shipments last quarter, outpaced retail takeaway of about 3%. I am very pleased with our gross margin improvement in the quarter, a 280 basis points increase versus last year, which enabled investments in our business and strong Adjusted EBITDA growth. In the second quarter, Quest retail takeaway was on track with our plans, driven by strong salty snacks growth, while Atkins performance was off versus our estimates. As the “New Year, New You” season began there was a meaningful increase in competitive activity in the form of in-store merchandising and programming. The increase in competitive activity impacted the merchandising effectiveness of Atkins and other brands within the nutritional snacking category. We remain confident in the long-term potential of both of our brands. Quest has a long runway of growth that will continue to be driven by advertising, innovation and distribution gains which should result in higher household penetration and increased buy rate. Work is progressing on the Atkins revitalization plan and, as previously discussed, all elements of the plan should be in the marketplace in fiscal 2025. We have accelerated some elements of the plan, specifically innovation, and by the end of fiscal 2024 expect to have new products in the marketplace across all product forms. We are particularly pleased with the upcoming launch of Atkins Strong, a 30g protein shake developed for consumers on a weight-loss drug or shoppers seeking higher levels of protein. Simply Good Foods is uniquely positioned as a U.S. leader in nutritional snacking. The nutritional profile of our products is more relevant today than at any other time as the conversation about health and wellness is increasing. As such, we will continue to execute our strategic priorities focused on doing the right thing for our customers and consumers to enable us to deliver on our growth objectives and ultimately drive increasing shareholder value.”