Simply Good Foods Q3 Highlights: 2.6% Sales Growth, Earnings Beat, Margin Pressure & More
Portfolio Pulse from Nabaparna Bhattacharya
Simply Good Foods Company (NASDAQ:SMPL) reported Q3 FY23 sales of $324.79 million, a 2.6% increase YoY, beating the consensus of $321.38 million. Adjusted EPS of $0.44 also surpassed the consensus of $0.41. However, gross margin contracted 80 basis points YoY to 36.7%. The company reported net income of $35.4 million, down from $38.8 million YoY. The company repaid $40.0 million of its term loan debt and expects FY23 net sales to increase slightly more than its long-term algorithm of 4-6%.
June 29, 2023 | 1:07 pm
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Simply Good Foods reported better than expected Q3 FY23 sales and EPS, but saw a contraction in gross margin and a decrease in net income YoY. The company also repaid $40.0 million of its term loan debt.
While Simply Good Foods beat sales and EPS estimates, the contraction in gross margin and decrease in net income could be concerning to investors. The repayment of debt is a positive sign, indicating the company's strong financial position. However, the overall impact on the stock price is uncertain, hence a neutral score is given.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100