DENVER: The Simply Good Foods Company (Nasdaq: SMPL) on Thursday reported a 13.8% year-over-year increase in net sales for its fiscal third quarter, driven by strong contributions from its OWYN acquisition and continued momentum for Quest-branded products. The company also narrowed its full-year financial outlook following a solid year-to-date performance.
For the thirteen weeks ended May 31, net sales rose to $381.0 million, up from $334.8 million a year earlier. Adjusted EBITDA increased 2.8% to $73.9 million, while adjusted diluted EPS climbed to $0.51 from $0.50. Net income declined slightly to $41.1 million from $41.3 million.
CEO Geoff Tanner highlighted 14% total net sales growth, including approximately 4% organic sales growth. “Consumption increased double-digits again for both Quest and OWYN, which now represent about 70% of net sales,” Tanner said.
The acquisition of Only What You Need, Inc. (OWYN), completed June 13, 2024, added $33.6 million to quarterly net sales. Atkins, a legacy brand, continued to face headwinds with a 13% decline in retail takeaway.
Gross margin fell 350 basis points to 36.4% due to inflation and acquisition-related impacts. Operating expenses increased 5.7% to $79.2 million, with OWYN integration costs contributing to the rise.
Year-to-date net sales were $1.08 billion, a 13.2% increase. Adjusted EBITDA rose 10.6% to $211.9 million, and adjusted diluted EPS reached $1.46, up 9.8% from the prior year.
The company expects FY25 net sales to grow 8.5%–9.5%, while adjusted EBITDA is projected to increase 4%–5%, despite a 53-week year-over-year comparison headwind.