Simply Good Foods Q4 2022 Earnings Report
Key Takeaways
Simply Good Foods reported a 5.5% increase in net sales for the fourth quarter of fiscal year 2022, with net income rising to $30.1 million and earnings per diluted share reaching $0.30. The company's adjusted EBITDA also saw an increase, and they provided a positive outlook for fiscal year 2023, expecting continued growth.
Net sales increased by 5.5% to $274.2 million.
Net income was reported at $30.1 million, compared to $18.2 million in the previous year.
Earnings per diluted share (EPS) increased to $0.30, up from $0.19.
Adjusted EBITDA increased to $51.0 million, a rise from $48.5 million year-over-year.
Simply Good Foods
Simply Good Foods
Forward Guidance
The Company anticipates net sales to increase slightly greater than the 4-6% long-term algorithm and Adjusted EBITDA to increase in line with the net sales growth rate in fiscal 2023.
Positive Outlook
- Net sales are expected to increase slightly greater than the 4-6% long-term algorithm.
- Cost savings initiatives are in place to mostly mitigate projected higher supply chain costs.
- Significant marketing and organizational investments are expected to continue resulting in consumer base growth.
- Distribution and market share gains are anticipated.
- Adjusted EBITDA is expected to increase in line with the net sales growth rate.
Challenges Ahead
- Net sales outlook includes a headwind of almost 1 percentage point related to the licensing of the Quest frozen pizza business.
- Gross margin is expected to decline versus last year, although at a lower rate than fiscal 2022.
- Most of the gross margin decline will occur in the fiscal first quarter of 2023 due to prior year comparison.
- Supply chain costs are expected to be higher.
- Higher interest expense is expected from an increase in the variable interest rate related to its term loan debt.