Amplify Snack Brands (BETR) Tyrells and Oats Offsets Paqui Weakness - Piper Jaffray
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Piper Jaffray analyst, Sean Naughton, reiterated his Overweight rating on shares of Amplify Snack Brands (NYSE: BETR) after the company announced Q2 earnings that were largely in-line with expectations as well as the acquisition of Tyrrells, a leader in the better-for-you UK snack category. The acquisition offers BETR two things:
1) Tyrrells is just under half the size of the current Amplify portfolio at $111M in sales and should provide Amplify a solid international platform to grow both Tyrrells and its own portfolio of brands.
2) it provides an entrance for BETR into the better-for-you chip category as well as product/customer diversification.
In the quarter, Paqui was a weak point. While distribution, acceptance with retailers, and repurchase rates have all been very good for Paqui, the initial trial ramp has not progressed as originally planned. The company has amped up the marketing behind the brand via in-store trial demonstrations as well as improved the packaging with images of the product which has been well received by consumers and retailers alike. Despite the slightly worse ramp for Paqui, Oatmega has been solid and is offsetting this weakness.
No change to the price target of $19.
Shares of Amplify Snack Brands closed at $14.26 yesterday.
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