The Simply Good Foods Company Reports Fiscal First Quarter 2025 Financial Results and Reaffirms Fiscal Year 2025 Outlook

Core Insights - The Simply Good Foods Company reported a net sales increase of 10.6% to $341.3 million for the first quarter ended November 30, 2024, primarily driven by the acquisition of OWYN [3][7] - The company reaffirmed its fiscal year 2025 outlook, expecting net sales growth of 8.5$38.1 million, up from $35.6 million in the same period last year [6][7] - Adjusted EBITDA increased by 13.1$70.1 million compared to $62.0 million in the prior year [10][7] - Gross profit rose to$130.5 million, reflecting a gross margin of 38.2%, a 90 basis points increase year-over-year [5][7] Sales and Market Trends - Retail takeaway for Simply Good Foods increased by approximately 8%, with Quest and OWYN brands showing growth rates of about 10% and 67%, respectively [4][2] - Legacy Simply Good Foods' net sales remained stable compared to the previous year, impacted by shipment timing [3] Operating Expenses - Operating expenses totaled $75.9 million, an increase of$12.6 million from the previous year, largely due to the inclusion of OWYN and higher employee-related costs [8][7] - Selling and marketing expenses rose to $33.0 million, while general and administrative expenses increased to$38.1 million [8] Balance Sheet and Cash Flow - As of November 30, 2024, the company had cash of $121.8 million and a net debt to adjusted EBITDA ratio of 0.8x [12][13] - Cash flow from operations was approximately$32.0 million, down from $47.5 million in the prior year, primarily due to higher working capital needs related to the OWYN acquisition [12] Outlook - The company anticipates continued organic sales growth driven by volume and has strong marketing plans in place for the upcoming year [14] - Input cost inflation is expected, but the company aims to offset these costs through productivity and cost-saving initiatives [14]