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Nov 27, 2021
Simply Good Foods Q1 2022 Earnings Report
Reported fiscal first quarter 2022 financial results and updated full fiscal year 2022 outlook.
Key Takeaways
Simply Good Foods reported a strong start to fiscal year 2022, with net sales increasing by 21.7% driven by solid performance from both Atkins and Quest brands. The company's gross profit margin improved, and adjusted EBITDA increased significantly. Management raised full year net sales and Adjusted EBITDA outlook.
Net sales increased 21.7% driven by strong Atkins and Quest performance.
Gross profit margin of 41.4%, an increase of 70 basis points.
Adjusted Diluted EPS of $0.43 versus $0.29.
Adjusted EBITDA increased 34.7% to $65.6 million.
Forward Guidance
The Company anticipates that it will build on its momentum and generate solid net sales and Adjusted EBITDA growth in fiscal 2022.
Positive Outlook
- Net sales to increase 12-14% versus last year.
- Marketing expense will increase versus last year, although less than the net sales growth rate
- G&A leverage will be significant.
- Adjusted EBITDA to increase slightly less than the net sales growth rate.
- Adjusted Diluted EPS will increase greater than the Adjusted EBITDA growth rate.
Challenges Ahead
- Gross margin contraction of about 250 basis points versus last year.
- Supply chain costs remain at elevated levels
- Inflation, primarily due to higher ingredient costs, will result in gross margin contraction greater than our previous outlook.
- About a 1 percentage point headwind related to the European business exit that was completed in the fourth quarter of fiscal 2021.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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