Core Viewpoint - Simply Good Foods (SMPL) has consistently surpassed earnings estimates and is well-positioned for future earnings reports, making it a strong candidate for investors in the Zacks Food - Confectionery industry [1]. Earnings Performance - In the last reported quarter, Simply Good Foods achieved earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.39 per share by 17.95% [2]. - In the previous quarter, the company was expected to post earnings of $0.46 per share but delivered $0.49 per share, resulting in a surprise of 6.52% [2]. Earnings Estimates and Predictions - Recent estimates for Simply Good Foods have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time [6]. Earnings ESP Analysis - Simply Good Foods currently has an Earnings ESP of +0.79%, suggesting that analysts are optimistic about the company's earnings prospects [8]. - The next earnings report for the company is expected to be released on July 10, 2025 [8].

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst holds certifications as FMVA and FPWMP, which provide skills in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst graduated with a CGPA of 3.6 in Finance from Alexandria University in 2024, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Core Insights - Simply Good Foods Company will report financial results for the thirteen-week period ended May 31, 2025, on July 10, 2025, before market open [1] - A conference call will be held to discuss these results, featuring CEO Geoff Tanner and incoming CFO Chris Bealer [1] Financial Reporting - The financial results will cover a thirteen-week period ending on May 31, 2025 [1] - The conference call is scheduled for 6:30 a.m. Mountain time (8:30 a.m. Eastern time) on July 10, 2025 [2] Participation Details - Investors can participate in the live call by dialing 1-877-407-0792 from the U.S. or 1-201-689-8263 from international locations [2] - The call will be broadcast live on the Company's website, with a replay available two hours after the call [3] Company Overview - Simply Good Foods Company is a consumer-packaged food and beverage company based in Denver, Colorado, focusing on nutritious snacking [4] - The product portfolio includes protein bars, ready-to-drink shakes, snacks, and confectionery products under brands like Atkins™, Quest™, and OWYN™ [4] - The company aims to lead the nutritious snacking movement through innovation and growth opportunities [4]

Transaction Overview - The enterprise value of the transaction is $856 million, representing a multiple of 116x CY'17E EBITDA of $74 million[35] - The selling shareholders will receive $628 million in cash consideration and approximately 10 million rollover shares at $1000 per share at closing[35] - A common stock private placement will occur in the amount of 10 million shares at $1000 per share, totaling $100 million[35] Atkins Business & Financials - Atkins is estimated to have calendar year 2017E net sales of $411 million and EBITDA of $74 million[21] - The Atkins brand has approximately $600 million in retail sales[22] - Atkins U S snacking point-of-sale takeaway growth has had a compound annual growth rate of 16% from 2008 to 2016[27] - Atkins has attractive margins, with a gross margin of approximately 47% and an EBITDA margin of approximately 18%[25] Market Position & Growth Strategy - Atkins holds a leadership position in its section of the store, with approximately 40% share-of-shelf[25] - The company sees an opportunity to expand its target audience by 4x[25] - Atkins is the category leader in total nutritional snacking with 117% market share[45]

Company Overview - Conyers Park Acquisition Corp merged with Atkins to become The Simply Good Foods Company on July 7th[9] - Atkins' Adjusted EBITDA margins are approaching 20%[9] - The company expects to deliver 2017 Adjusted EBITDA target of $72 million[13] Growth & Strategy - The company is heading to a 9th straight year of consumption growth in the US[14] - The company aims to expand its target consumer base from 8 million low-carb program dieters to include 31 million self-directed consumers[17] - E-commerce gross sales are expected to reach $10 million in FY 2017, up from approximately $4 million in TTM August 2015[37] Financial Performance - Q3 2017 Pro Forma Adjusted Net Sales reached $97 million, a 7% year-over-year growth[41] - Q3 2017 Pro Forma Adjusted Gross Profit reached $44 million, an 8% year-over-year growth[41] - Q3 2017 Pro Forma Adjusted EBITDA reached $15 million, a 20% year-over-year growth[41] - For the 9 months of fiscal year 2017, Pro Forma Adjusted Net Sales reached $299 million, a 6% year-over-year growth[44]

Core Insights - CT Realty has successfully leased an 805,000 square foot industrial facility to Simply Good Foods for a seven-year term, enhancing its presence in a growing logistics hub in Mount Comfort, Indiana [1][4] - The facility features Class A specifications, including a 40-foot clear height and ample parking, supporting Simply Good Foods' supply chain and distribution needs [2][3] - This lease brings CT Realty's Mount Comfort project to 100% occupancy, following a previous successful lease to Walmart in Whitestown, Indiana [4] Company Overview - CT Realty is a national real estate and investment company with over 30 years of experience, having completed more than 300 transactions valued at over $8 billion [5] - The company focuses on Class A industrial logistics developments across the U.S. and has acquired thousands of acres of industrial land since 2010 [5] - Simply Good Foods, headquartered in Denver, Colorado, is a consumer packaged food and beverage company known for its protein bars and shakes, aiming to lead the nutritious snacking movement [5]

The Simply Good Foods Company (SMPL) reported solid second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.The company’s strong performance reflected solid execution across distribution, innovation and brand-building efforts. Continued consumer demand, favorable input costs and disciplined cost management supported profitability. With growing interest in high-protein, low-sugar and low-carb products, the company believes its brand ...

Financial Performance - Net sales increased by 15.2% to $359.7 million for the thirteen weeks ended March 1, 2025, compared to $312.2 million for the same period in 2024, driven primarily by Quest volume growth and the OWYN Acquisition[109]. - Gross profit increased by 11.4% to $130.1 million, with a gross margin of 36.2%, a decrease of 120 basis points from the previous year, primarily due to lower margins from the OWYN business[111]. - Net income for the thirteen weeks ended March 1, 2025, was $36.7 million, an increase of $3.6 million compared to $33.1 million for the same period in 2024[117]. - Adjusted EBITDA rose by 17.6% to $68.0 million, driven by higher gross profit[118]. - Net sales increased by $80.0 million, or 12.9%, to $700.9 million for the twenty-six weeks ended March 1, 2025, driven primarily by Quest volume growth and the OWYN Acquisition[120]. - Gross profit increased by $28.6 million, or 12.3%, to $260.6 million, with a gross profit margin of 37.2%, a decrease of 20 basis points from the previous year[122]. - Net income for the twenty-six weeks ended March 1, 2025, was $74.9 million, an increase of $6.2 million compared to $68.7 million for the same period last year[127]. - Adjusted EBITDA increased by $18.3 million, or 15.2%, to $138.1 million, driven primarily by higher net gross profit[128]. Costs and Expenses - Cost of goods sold rose by 17.5% to $229.5 million, influenced by higher sales volumes and a non-cash inventory step-up charge related to the OWYN Acquisition[110]. - Operating expenses grew by 9.6% to $75.4 million, reflecting increased selling and marketing costs as well as general and administrative expenses[113]. - Cost of goods sold rose by $51.4 million, or 13.2%, to $440.3 million for the same period, attributed to higher sales volumes and a non-cash $1.4 million inventory step-up charge related to the OWYN Acquisition[121]. - Operating expenses increased by $19.2 million, or 14.5%, to $151.3 million, with general and administrative expenses rising by $17.2 million, or 30.2%[129]. - Selling and marketing expenses increased by $1.4 million, or 2.2%, primarily due to the OWYN Acquisition[123]. - Interest expense rose by $2.6 million, primarily due to incremental borrowing associated with the OWYN Acquisition[125]. Acquisition Details - The OWYN Acquisition was completed for approximately $280.0 million, enhancing the company's product portfolio in the plant-based protein segment[99]. - The Company completed the OWYN Acquisition on June 13, 2024, acquiring 100% of equity interests for a cash purchase price of approximately $281.9 million[146]. - The OWYN Acquisition was funded through $250.0 million in incremental borrowings and cash on hand, resulting in a total net consideration paid of $280.2 million as of March 1, 2025[147]. - Business transaction costs related to the OWYN Acquisition amounted to $0.8 million for the twenty-six weeks ended March 1, 2025[129]. Cash Flow and Financing - The Company had $103.7 million in cash as of March 1, 2025, sufficient to finance operations and growth strategy for at least the next twelve months[133]. - Net cash provided by operating activities decreased by $30.7 million to $63.3 million for the twenty-six weeks ended March 1, 2025, compared to $94.0 million for the same period in 2024[151]. - Net cash used in financing activities was $92.4 million for the twenty-six weeks ended March 1, 2025, primarily due to $100.0 million in principal payments on the Term Facility[153]. - Approximately $71.5 million remained available for repurchases under the $150.0 million stock repurchase program as of March 1, 2025[149]. Future Outlook - The company anticipates continued growth in fiscal year 2025, supported by strong advertising, marketing plans, and product innovation[101]. - The company is monitoring macroeconomic trends, including ingredient inflation and tariffs, which may impact future profitability[102]. Debt and Compliance - As of March 1, 2025, the outstanding balance of the Term Facility was $300.0 million, with no principal payments required over the next twelve months[145]. - The Revolving Credit Facility has a maximum total net leverage ratio of 6.00:1.00, and the Company was in compliance with all covenants as of March 1, 2025[144]. - The Company entered into a "2023 Repricing Amendment" on April 25, 2023, reducing the interest rate on Initial Term Loans and extending the maturity date from July 7, 2024, to March 17, 2027[139]. - The Company expensed $0.7 million of non-deferrable third-party costs related to the 2025 Repricing Amendment[142].

Core Insights - Simply Good Foods (SMPL) reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing an increase from $0.40 per share a year ago, resulting in an earnings surprise of 17.95% [1] - The company achieved revenues of $359.66 million for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 1.86% and up from $312.2 million year-over-year [2] - The stock has experienced a decline of approximately 14.9% since the beginning of the year, compared to the S&P 500's decline of 15.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $381.79 million, and for the current fiscal year, it is $1.91 on revenues of $1.46 billion [7] - The estimate revisions trend for Simply Good Foods is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Food - Confectionery industry, to which Simply Good Foods belongs, is currently ranked in the bottom 3% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Hershey (HSY), is expected to report quarterly earnings of $1.96 per share, reflecting a year-over-year decline of 36.2%, with revenues anticipated to be $2.83 billion, down 13.1% from the previous year [9][10]

Financial Data and Key Metrics Changes - Total net sales for Simply Good Foods in Q2 2025 reached $359.7 million, reflecting a 15.2% increase year-over-year, driven by the contribution from Owen and organic growth [44][45] - Adjusted EBITDA increased by 17.6% to $68 million, with net income growing by 10.9% to $36.7 million [48][49] - Gross margin was reported at 36.2%, a decline of 120 basis points compared to the previous year, influenced by the inclusion of Owen and inflationary pressures [46][54] Business Line Data and Key Metrics Changes - Quest's net sales grew by 16.5% in Q2, representing 60% of the company's net sales, while Atkins saw a decline of 11.5% due to lower consumption and lost distribution [44][28] - Owen experienced a retail takeaway increase of 52%, with ready-to-drink shakes growing by 53% [36][44] Market Data and Key Metrics Changes - The nutritional snacking category grew by 12% in Q2, marking the 16th consecutive quarter of growth [16] - Quest's retail takeaway increased by 13%, while Atkins faced a decline in consumption [22][28] Company Strategy and Development Direction - The company aims to lead the nutritional snacking category by focusing on innovation, expanding physical availability, and increasing brand awareness [19][20][41] - The strategy includes shifting focus from Atkins to faster-growing brands like Quest and Owen, with plans to optimize SKU distribution [30][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic and uncertain consumer environment but expressed confidence in the company's positioning within the high-protein, low-sugar market [41][42] - The outlook for fiscal year 2025 includes a projected net sales increase of 8.5% to 10.5%, with adjusted EBITDA expected to grow by 4% to 6% [54][56] Other Important Information - The company is undergoing a leadership transition with the retirement of CFO Sean Mara and the appointment of Chris Beeler as his successor [10][12] - The integration of Owen is progressing well, with expectations for synergy capture starting in fiscal 2026 [40] Q&A Session Summary Question: What is driving the reduction in sales guidance for Atkins? - Management noted that the reduction is due to lost display space and distribution at a key customer, which was anticipated [60][64] Question: What prompted the relaunch of Quest shakes? - The relaunch was driven by the need to meet consumer demand for indulgent, high-protein options, with a focus on flipping the macros of traditional shakes [71][75] Question: How does the company plan to build awareness for Owen? - The initial focus will be on expanding distribution, with marketing efforts to follow once a solid distribution footprint is established [120] Question: What are the expectations for the bar category, specifically for Quest? - Management acknowledged the need for continuous innovation in the bar category and expressed optimism about upcoming product launches [124][125]