The Simply Good Foods Company (NASDAQ: SMPL) has released its financial results for the fiscal third quarter of 2024, which ended on May 25, 2024. The company reported net sales of $334.8 million, compared to $324.8 million in the same period last year, reflecting a 3.1% increase. Net income for the quarter was $41.3 million, up from $35.4 million in the prior year's quarter. Earnings per diluted share (EPS) also saw a rise, reaching $0.41 compared to $0.35 in the same quarter of the previous year.
The company's adjusted diluted EPS was $0.50, a significant improvement from $0.44 in the third quarter of the previous fiscal year. Additionally, adjusted EBITDA for the quarter was $71.9 million, up from $66.6 million in the comparable period.
For the full fiscal year 2024, Simply Good Foods reaffirmed its outlook for net sales to increase around the mid-point of the company’s long-term algorithm of 4-6%, excluding the impact of the recently acquired brand, OWYN. The company also updated its total adjusted EBITDA, now expected to increase about 8%, higher than the previous estimate of 6-8%.
Geoff Tanner, President, and CEO of Simply Good Foods, highlighted that the third quarter results were driven by continued Quest growth and improving Atkins marketplace trends, as well as strong gross margin performance. Quest retail takeaway in the combined U.S. measured and unmeasured channels increased about 13%, while Atkins was down about 5%.
In the year-to-date third quarter of 2024, net sales were $955.6 million, up from $922.3 million in the same period of the previous year, representing a 3.6% increase. Gross profit for the period was $365.6 million, compared to $333.0 million in the prior year. Net income for the year-to-date third quarter was $110.0 million, up from $96.9 million in the comparable period of 2023.
The company's cash position at the end of the third quarter of fiscal 2024 was $208.7 million, and cash provided by operating activities for the year-to-date third quarter fiscal 2024 was $166.8 million, showing a 50% increase compared to the prior year.
Moreover, Simply Good Foods completed the acquisition of OWYN on June 13, 2024, and funded the cash purchase price of $280 million through a combination of cash on its balance sheet and an incremental borrowing of $250 million under its outstanding credit facility.
Looking ahead, the company is targeting a net debt to adjusted EBITDA ratio of around 1.25x by fiscal year-end August 2024. It also reaffirmed its net sales outlook for the full fiscal year and expects OWYN net sales to be in the $25-30 million range for the balance of fiscal year 2024.
The company's confidence in its strategy and execution is reflected in its sustained profitable growth. With a solid year-to-date performance, Simply Good Foods expects total adjusted EBITDA, including OWYN, to increase about 8% versus the previous estimate of 6-8%.
The Simply Good Foods Company is a consumer packaged food and beverage company headquartered in Denver, Colorado, and operates with the Atkins, Quest, and OWYN brands.
Today the company's shares have moved -1.6% to a price of $35.58. For more information, read the company's full 8-K submission here.
