Simply Good Foods (SMPL) Earnings Beat in Q4, Sales Rise Y/Y
The Simply Good Foods Company SMPL posted mixed results in the second quarter of 2023, wherein the top line met the Zacks Consensus Estimate while the bottom line beat the same. Sales and earnings increased from the year-ago period.
The company’s shares have gained 7.9% in the past three months against the industry’s 15% decline.
Q4 Insights
This Zacks Rank #1 (Strong Buy) company posted adjusted earnings of 45 cents a share compared with the Zacks Consensus Estimate of 42 cents. Also, the bottom-line figure increased from the 36 cents reported in the year-earlier quarter.
The Simply Good Foods Company Price, Consensus and EPS Surprise
The Simply Good Foods Company price-consensus-eps-surprise-chart | The Simply Good Foods Company Quote
Net sales of $320.4 million rose 16.9% year over year on higher sales across the segments. North American net sales grew 17% and International sales rose 11.7% year over year. Volume was a 13.4 percentage point contribution to net sales and pricing was a 3.5 percentage point benefit. The sales figure met the Zacks Consensus Estimate.
In the fourth quarter of fiscal 2023, total Simply Good Foods along with measured and unmeasured channel U.S. retail takeaway rose 11%. Quest retail takeaway in the combined U.S. measured and unmeasured channels jumped 24% and Atkins was down about 4%.
Gross profit was $120.5 million for the fiscal fourth quarter, which increased from $18.6 million in the prior-year period. The gross margin rose 50 basis points to 37.6% on lower ingredient and packaging costs. Adjusted EBITDA was $67.3 million, up from $51 million delivered in the year-ago period.
Other Financials
In fiscal 2023, cash flow from operations was $171.1 million, up 55% from the last year. The company repaid $121.5 million of its term loan debt during the fiscal year and had an outstanding principal balance of $285 million at the end of fiscal 2023. As of Aug 26, 2023, it had cash of $87.7 million.
During fiscal 2023, Simply Good Foods repurchased $16.4 million of the common stock for an average price of $30.11 a share. Nearly $71.5 million remains available under its stock repurchase authorization.
Outlook
During fiscal 2024, management projects sales growth to be backed by volume. The company has sturdy advertising and marketing plans along with innovation, merchandising and promotions, which will boost the overall financial and marketplace results.
It anticipates lower supply-chain costs in fiscal 2024, which will result in solid gross margin and provide it with flexibility to invest in marketing efforts and the latest organizational capabilities.
Net sales are likely to increase at the high end of the company's long-term goal of 4-6%, including gains from the fifty-third week. Adjusted EBITDA is expected to increase slightly greater than net sales growth.
Other Key Picks
Inter Parfums IPAR, which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales indicates 19.7% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9% on average.
Helen of Troy HELE, a provider of several consumer products, presently has a Zacks Rank #2 (Buy). HELE’s expected earnings per share growth rate for three to five years is 8%.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales suggests a decline of 2.9% from the year-ago reported numbers. HELE has a trailing four-quarter earnings surprise of 8.1%, on average.
Ingredion Incorporated INGR, a producer and distributor of sweeteners, nutrition ingredients and biomaterial solutions, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for INGR’s current financial-year earnings per share is expected to rise 23.9% from the corresponding year-ago reported figure.
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