Simply Good Q1 Profit Down, But Beats Estimates; Raises FY22 Outlook

(RTTNews) - The Simply Good Foods Company (SMPL), a maker of branded nutritional foods and snacking products, on Wednesday posted a decline in net income for the first quarter, particularly reflecting a re-measurement of the company's private warrant liabilities and a rise in expenses. However, the firm's adjusted earnings and revenue beat the Street view.

Following a rise in revenue and a rise in consumer demand, the Denver-headquartered company raised its guidance for the fiscal 2022.

For the three-month period to November, the food company reported a net income of $21.2 million or $0.22 per share, versus $43 million or $0.23 per share, reported for the same period a year ago. "The change in EPS reflects the re-measurement of private warrant liabilities consistent with the Warrant Accounting Treatment," the company said in a statement.

The company's adjusted EPS rose to $0.43, from last year's $0.29. Twelve analysts, on average, polled by Thomson-Reuters were estimating the firm to report earnings per share at $0.34. Analysts' estimates typically exclude one-time items.

For the thirteen-week period ended in November, owing to a rise in consumer momentum, Simply Good's income from operations rose to $58 million, versus $54.85 million, reported for the previous year quarter.

It also recorded a rise in its adjusted EBITDA by 34.7 percent, to $65.6 million, for first quarter of 2022, compared with the same period, last year.

Net sales of the company registered a steep rise to $281.26 million as against $231.15 million posted, a year ago. Analysts', on average, had projected the company report a revenue of $266.25 million.

With an expectation for a solid sales growth and higher consumer demand, the company has raised its outlook for the current fiscal. Accordingly, for the FY22, it expects a year-over-year a net sales growth to be in the range of 12 percent -14 percent, against its previous projection of 8 percent to 10 percent.

For the year 2022, the business expects its adjusted EBITDA to increase slightly less than the net sales growth rate, versus its previous outlook for adjusted EBITDA to increase slightly greater than the net sales growth rate.