Core Viewpoint - Simply Good Foods (SMPL) is expected to report a year-over-year decline in earnings despite higher revenues for the quarter ended February 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1][3]. Earnings Expectations - The upcoming earnings report is anticipated to show earnings of $0.39 per share, reflecting a -2.5% change year-over-year, while revenues are projected to be $353.48 million, an increase of 13.2% from the previous year [3]. - The stock price may increase if the actual earnings exceed expectations, while a miss could lead to a decline in stock price [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.31% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +0.52% suggests that analysts have recently become more optimistic about the company's earnings prospects, although the stock carries a Zacks Rank of 4, complicating predictions of an earnings beat [10][11]. Earnings Surprise History - In the last reported quarter, Simply Good Foods exceeded the expected earnings of $0.46 per share by delivering $0.49, resulting in a surprise of +6.52% [12]. - The company has beaten consensus EPS estimates in the last four quarters [13]. Conclusion - While the company does not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].

Company Overview - The Simply Good Foods Company is a developer, marketer, and seller of branded nutritional foods and snacking products, headquartered in Denver, Colorado [4] - The company's product portfolio includes protein bars, ready-to-drink shakes, sweet and salty snacks, and confectionery products marketed under the Atkins™, Quest™, and OWYN™ brands [4] - The company aims to lead the nutritious snacking movement and plans to expand its healthy lifestyle platform through innovation, organic growth, and investment opportunities in the snacking space [4] Financial Results Announcement - The company will report financial results for the 13-week fiscal second quarter ended March 1, 2025, on April 9, 2025, before market open [1] - A conference call will be held to discuss these results, featuring comments from the President and CEO, Geoff Tanner, and the CFO, Shaun Mara [1] Conference Call Details - The conference call is scheduled to begin at 6:30 a.m. Mountain time (8:30 a.m. Eastern time) on April 9, 2025 [2] - 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 over the Internet on the company's website, with a telephone replay available approximately two hours after the call concludes [3]

Core Insights - Quest Nutrition has launched its new Protein Milkshakes, featuring an industry-leading 45 grams of protein per bottle, while keeping sugar and carbohydrates low [1][3] - This launch follows the introduction of Overload Bars in February, which also emphasizes protein content with added flavors [1][2] Product Details - Quest Protein Milkshakes contain 45 grams of high bioavailability complete protein sourced from ultrafiltered milk, with only 2 grams of sugar and 4 grams or less of net carbs [8] - The shakes are available in Chocolate, Vanilla, and Strawberry flavors, providing a rich, indulgent taste [8] - Quest Overload Bars feature 20 grams of protein, 1 gram of sugar, and 4 grams or less of net carbs, with mix-ins like sprinkles and chocolatey chips, available in flavors such as Sundae Funday and Chocolate Explosion [8] Company Positioning - Quest Nutrition aims to lead the protein-forward product market by continuously innovating and expanding its offerings, as demonstrated by the recent product launches [2][3] - The Simply Good Foods Company, which owns Quest, focuses on nutritious snacking and aims to elevate the standards of food products through innovation and investment opportunities [5]

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines factor analysis with classic fundamental analysis to uncover the true story of companies and their stocks, highlighting the importance of future potential over past data [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, which are foundational to modern Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, conducting numerous seminars on the topic [1]

Core Viewpoint - The Simply Good Foods Company has announced a succession plan for its Chief Financial Officer, with Shaun P. Mara set to retire on July 3, 2025, and Christopher J. Bealer expected to succeed him [1][2]. Company Overview - Simply Good Foods is a developer, marketer, and seller of branded nutritional products under the Quest, Atkins, and OWYN brands, aiming to lead the nutritious snacking movement [1][5]. - The company is headquartered in Denver, Colorado, and focuses on innovative products in the consumer packaged food and beverage sector [5]. CFO Transition Details - Shaun P. Mara has been with the company since 2017 and has served as CFO since 2022 [2]. - Christopher J. Bealer will join the company on April 1, 2025, as Senior Vice President of Finance and is expected to take over as CFO upon Mara's retirement [2][4]. - Bealer brings nearly 23 years of experience in consumer packaged goods and has held significant roles at Reckitt Benckiser Group PLC and Whirlpool Corporation [3]. Leadership Insights - CEO Geoff E. Tanner expressed gratitude for Mara's contributions and confidence in Bealer's capabilities to drive future success [4]. - The Board of Directors emphasized the importance of a thoughtful succession planning process and expressed excitement about Bealer's role in the company's growth [4].

Group 1 - The Simply Good Foods Company (NASDAQ: SMPL) focuses on providing healthier snack options through well-known brands like Atkins and Quest [1] - Atkins is recognized for its low-carb lifestyle approach, while Quest offers a variety of protein-rich snacks [1] Group 2 - Grassroots Trading emphasizes objective and unbiased research, particularly targeting small- to mid-cap companies [1] - The company aims to identify overlooked investment opportunities and occasionally highlights potential in larger companies [1]

Financial Performance - Net sales increased to $341.3 million for the thirteen weeks ended November 30, 2024, compared to $308.7 million for the same period in 2023, representing a 10.4% increase in North America net sales [107]. - Gross profit rose by $15.4 million, or 13.3%, to $130.5 million, with a gross profit margin of 38.2%, up from 37.3% in the prior year [109]. - Net income for the thirteen weeks ended November 30, 2024, was $38.1 million, an increase of $2.6 million compared to $35.6 million in the prior year [114]. - Adjusted EBITDA increased by $8.1 million, or 13.1%, driven primarily by higher gross profit, reaching $70.1 million [115]. - EBITDA for the same period was $59.8 million, up 3.7% from $57.7 million year-over-year [118]. - Adjusted EBITDA increased to $70.1 million, compared to $62.0 million in the prior year, reflecting a growth of 12.5% [118]. - Income from operations increased by $2.8 million to $54.6 million for the thirteen weeks ended November 30, 2024, compared to $51.8 million in the prior year [138]. Expenses and Costs - Operating expenses increased by $12.6 million, or 19.8%, primarily due to higher general and administrative costs related to the OWYN Acquisition [110]. - Cost of goods sold increased by $17.2 million, or 8.9%, primarily due to higher sales volumes from the OWYN Acquisition [108]. - General and administrative expenses rose by 41.2%, largely due to integration costs associated with the OWYN Acquisition [116]. - Interest expense increased by $1.8 million due to incremental borrowing related to the OWYN Acquisition [111]. Acquisition Impact - The OWYN Acquisition contributed significantly to the overall sales growth and improved gross margins due to lower ingredient and packaging costs [101]. - The OWYN Acquisition was completed for approximately $281.9 million, funded through $250.0 million in incremental borrowings and cash on hand [133]. Cash Flow and Liquidity - Cash provided by operating activities decreased by $15.5 million to $32.0 million, primarily due to changes in working capital [138]. - The company had $121.8 million in cash as of November 30, 2024, indicating sufficient liquidity for operations and growth strategy for at least the next twelve months [120]. - The outstanding balance of the Term Facility was $350.0 million, with no principal payments required over the next twelve months [132]. - Net cash used in financing activities was $42.3 million, significantly higher than $13.1 million in the prior year, primarily due to principal payments on the Term Facility [140]. - The company did not repurchase any shares during the thirteen weeks ended November 30, 2024, with approximately $71.5 million remaining available under the stock repurchase program [136]. Future Outlook - The company expects continued growth in fiscal year 2025 driven by volume, advertising, marketing, and innovation strategies [101]. Market Risk - No material changes in market risk exposure during the thirteen-week period ended November 30, 2024 [143].

Financial Data and Key Metrics - The company issued its earnings release at approximately 7 a m Eastern Time, with the release and accompanying presentation available on the Investor section of the company's website [3] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - No specific information on company strategy or industry competition was provided in the content Management Commentary on Operating Environment and Future Outlook - Management will make forward-looking statements during the call, which are subject to various risks and uncertainties that may cause actual results to differ materially [4] Other Important Information - The call is being webcast, and an archive of today's remarks will be available on the company's website [3] Q&A Session Summary - No specific questions or answers from the Q&A session were provided in the content

Financial Performance - Net sales increased by 10.6% to $341.3 million, driven by the OWYN acquisition[10, 26] - Gross margin was 38.2%, exceeding estimates[10] - Adjusted EBITDA grew by 13.1%[10] - Net income was $38.1 million, compared to $35.6 million in the previous year[10] Brand Performance - Total Simply Good Foods Q1 retail takeaway increased approximately 8%[9] - Quest Q1 retail takeaway increased 10%, with Snacks and Bars increasing about 19% and 1% respectively[11] - Atkins Q1 retail takeaway declined 4%, an improvement from the previous quarter's 5% decline[14] - OWYN's retail takeaway increased by 67%, with measured channels growing by 39% and unmeasured channels by 81%[17] Outlook and Strategy - The company reaffirms its fiscal year 2025 outlook, expecting net sales growth in the 4-6% range and Adjusted EBITDA growth slightly greater than the net sales increase[10] - The company anticipates fiscal year 2025 combined interest income and GAAP interest expense of approximately $23-25 million[32] - The company expects higher ingredient and packaging costs to pressure gross margin in fiscal year 2025[35]

Company Performance - Simply Good Foods reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and up from $0.43 per share a year ago, representing an earnings surprise of 6.52% [1] - The company posted revenues of $341.27 million for the quarter ended November 2024, which missed the Zacks Consensus Estimate by 1.95%, compared to $308.68 million in the same quarter last year [2] - Over the last four quarters, Simply Good Foods has surpassed consensus EPS estimates four times but has topped consensus revenue estimates only once [2] Stock Performance and Outlook - Simply Good Foods shares have declined approximately 5.7% since the beginning of the year, while the S&P 500 has gained 0.5% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at $0.41 for the coming quarter and $1.90 for the current fiscal year, with revenues expected to be $353.07 million and $1.46 billion respectively [7] Industry Context - The Food - Confectionery industry, to which Simply Good Foods belongs, is currently ranked in the bottom 4% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Simply Good Foods' stock performance [5]