Simply Good Foods Reports Q1 Earnings Slightly Above Street View

The Simply Good Foods Company SMPL reported first-quarter FY23 sales growth of 7% year-on-year to $300.88 million, beating the consensus of $300.57 million.
Gross profit was $111 million, with a gross margin contracting 450 basis points Y/Y to 36.9%.
Operating expenses remained flat at $58.5 million. Operating margin was 17.4%.
Adjusted EBITDA decreased 7.3% Y/Y to $60.8 million.
Net income jumped to $35.8 million from $21.1 million last year. Adjusted EPS of $0.42 beats the consensus of $0.40.
The company generated $8.7 million operating cash flow during the quarter and ended Q1 with cash and equivalents totaling $54.1 million.
Outlook: SMPL continues to expect net sales to increase slightly greater than its long-term algorithm of 4-6%, including a headwind of almost 1% related to the frozen pizza licensing.
Adjusted EBITDA is expected to increase in line with the net sales growth rate, while Adjusted EPS is expected to increase less than the Adjusted EBITDA growth rate.
"While early, we are seeing signs of an improving outlook related to ingredient and packaging costs in the second half of fiscal year 2023, as such, there is no change to our full year fiscal 2023 gross margin outlook," said CEO Joseph E. Scalzo.
Price Action: SMPL shares are trading lower by 4.45% at $36.50 in premarket on the last check Thursday.