The Simply Good Foods Company (NASDAQ:SMPL) reported first-quarter earnings that beat expectations despite a revenue miss and reaffirmed its full-year outlook, sending its shares higher in early Thursday trade.
The nutritional foods and snacking products provider posted a 2.6% increase in sales to $308.7 million, just shy of analysts’ consensus estimates of $309.2 million.
Adjusted diluted earnings per share rose a cent to $0.43, above the $0.38 expected by analysts polled by Zacks Investment Research.
"Our first quarter marketplace results are a positive start to the year and, while early, the second quarter is off to a good start,” CEO Geoff Tanner commented in a statement.
"Additionally, we have strong marketing and merchandising plans in place for ‘New Year, New You’ season which started this week and will run through the second quarter of fiscal 2024.”
The company has guided investors to expect full-year net sales to increase at the high end of its long-term algorithm of 4% to 6%, including the benefit of a fifty-third week.
Adjusted underlying earnings (EBITDA) are expected to increase slightly greater than the net sales growth rate.
Analysts at Jefferies said the results were in line, and guidance of "towards the high end" is where the Street (and buy side) were.
“Importantly, volume drove growth — a key focus area in Staples for ’24,” the analysts wrote in client note.
“We see even better results in the coming quarters due to higher shipments and expanding margins, shifting guidance upward. FCF (free cash flow) delivery and deleverage were better than estimated.”
Jefferies has a 'Hold' recommendation on Simply Good Foods with a $37 price target.
The company's shares were up 3.9% at $41.13 by mid-morning in New York.