The Simply Goods Group (SMPL) PT Raised to $26 at Citi After Beating 3Q Expectations

Citi analyst Wendy Nicholson raised the price target on The Simply Goods Group (NASDAQ: SMPL) to $26.00 (from $22.00) after the company beat 3Q20 estimates due to strong cost controls and a shift in the timing of trade promotions. The company introduced guidance for 2020 of net sales of $790-800 mm, adjusted EBITDA of $145-150 mm, and adjusted EPS of $0.86-0.90.

The analyst reiterated a Buy rating, stating "the trade promotion shift increased SMPL’s net price realization by 110 bps in Q3, which should largely reverse in Q4 as retailers resume their previously scheduled promotions (which in turn will pressure gross margins in Q4). We now expect sales FY20 sales to be $796 mm (we had modeled $815 mm previously), with legacy Atkins sales down ~6% (we had modeled down ~3% previously but are now more cautious about the timing of a return to normal shopping patterns)".

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