Simply Good Foods (NASDAQ: SMPL) reported Q1 EPS of $0.22, $0.02 better than the analyst estimate of $0.20. Revenue for the quarter came in at $152.2 million versus the consensus estimate of $161.75 million.

First Quarter 2019 Financial Highlights vs. First Quarter 2018

• Net sales increased 25.8%, or $31.2 million, to $152.2 million
• Gross profit margin of 40.9%, a decrease of 200 basis points
  • Includes a non-cash $2.4 million inventory purchase accounting step-up adjustment related to the Quest acquisition
• Income tax benefit was $1.7 million versus expense of $4.6 million
• Net loss of $4.8 million vs. Net income of $15.3 million
• Adjusted EBITDA(1) increased 19.1% to $31.8 million
• Earnings (loss) per diluted share (“EPS”), $(0.05), a decrease of $0.23 per fully diluted share
• Adjusted Diluted EPS (1) of $0.22, the same as the year ago period

“Simply Good Foods, first quarter results represent a good start to fiscal 2020 as we build on our strong 2019 performance,” said Joseph E. Scalzo, President and Chief Executive Officer of Simply Good Foods. “Our legacy Atkins sales and profit growth were in line with our expectations and positions us nicely to deliver on our financial commitments. We are particularly pleased with our Atkins® brand retail takeaway performance for the thirteen weeks ended December 1, 2019, which increased 10.7% in the U.S. measured channels despite a very difficult comparison in the same period a year ago. In addition to our legacy Atkins growth, Quest contributed to the increased sales and earnings and is a valuable addition to our nutritional snacking portfolio.”

"The Quest acquisition is an exciting milestone for Simply Good Foods and strengthens our leadership within the nutritional snacking category. Quest gives us valuable customer and supplier scale while also providing us with a unique brand promise and consumer target. Our branded portfolio capitalizes on the growing consumer mega-trends that include growing snacking incidence and consumer desire for health and wellness, convenience and meal replacement products. We will continue to invest in our brands and are confident in our short and long term plans to drive growth through superior brand marketing and programs, expanded distribution and new products. We remain confident in our business growth opportunities moving forward and our ability to execute against our strategic initiatives to create value for our stockholders.”

GUIDANCE:

Simply Good Foods sees FY2020 EPS of $0.90-$0.95, versus the consensus of $0.75.

“We are pleased with our start to the year and the progress we are making against our strategic initiatives that build on our existing capabilities and strengthen our brands. Of course, one of our key goals in 2020 is the integration of Quest. I'm pleased to report that this work is well underway and progressing as planned. Collaboration of both leadership teams is excellent and gives us confidence that we will deliver on our integration plans. We have good marketplace momentum across the business and are confident in achieving our fiscal 2020 financial commitments,” Scalzo concluded.

For the full year fiscal 2020, the Company updated its outlook for the acquisition of Quest and anticipates full-year net sales of $850-870 million and Adjusted EBITDA1,4 of $154-158 million. The outlook for legacy Atkins net sales and Adjusted EBITDA1,4 growth remains unchanged from guidance provided on October 29, 2019. Recall, the Company expects legacy Atkins net sales growth for the fifty-two weeks ended August 29, 2020, to be at the high end of its long-term net sales growth target of 4% to 6% versus the fifty-three weeks ended August 31, 2019. Legacy Atkins Adjusted EBITDA1,4 is expect to grow at a somewhat higher rate than its expectation for net sales. Additionally, the Company estimates that the extra week included in fiscal year 2019 is a headwind to year-over-year comparisons of reported legacy Atkins net sales growth in fiscal 2020 of about 2%.

For earnings history and earnings-related data on Simply Good Foods (SMPL) click here.