The Simply Good Foods Company (NASDAQ:SMPL) reported fiscal third-quarter 2024 adjusted earnings per share of 50 cents, which beat the analyst consensus of 48 cents.
It registered third-quarter revenues of $334.76 million, missing the street view of $336.749 million.
North America net sales increased by 3.2%, and International net sales declined by 2.4% versus the year-ago period.
Quarterly adjusted EBITDA stood at $71.9 million versus $66.6 million in the year-ago period.
Gross profit was $133.6 million for the third quarter of fiscal 2024, an increase of $14.4 million from the year ago period.
Gross margin was 39.9% in the third quarter of fiscal 2024 versus 36.7% last year, an increase of 320 basis points. The improvement in gross margin was primarily due to lower ingredient and packaging costs.
In the third quarter of fiscal 2024, the company incurred costs related to the OWYN acquisition of $2.7 million.
At the end of the third quarter, the company had cash of $208.7 million. The company expects to pay down a portion of the $490 million in total term loan debt during the balance of fiscal year 2024 and is targeting a net debt to Adjusted EBITDA ratio of around 1.25x by fiscal year-end August 2024.
Outlook: For FY24, the company expects net sales to increase around the midpoint of its long-term algorithm of 4%- 6%, including the benefit of a fifty-third week (reiterated).
OWYN net sales are expected to be in the $25 million – $30 million range for the balance of the fiscal year 2024.
The company expects Adjusted EBITDA, including OWYN, to increase about 8% compared to last year and versus a previous estimate of 6-8%.
Price Action: SMPL shares are trading lower by 0.83% to $35.86 at last check Thursday.