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The Simply Good Foods Company (SMPL) has released its financial results for the third quarter of fiscal 2025, showcasing a strong performance driven by strategic acquisitions and robust brand growth. This article provides an analysis of the current quarter’s performance against expectations and offers insights into the company’s future guidance.

Simply Good Foods Reports Net Sales of $381 Million for Q3
 

In the third quarter of fiscal 2025, Simply Good Foods reported net sales of $381.0 million, surpassing the expected $380.08 million. This marks a 13.8% increase compared to the same period last year, largely attributed to the acquisition of Only What You Need, Inc. (OWYN), which contributed $33.6 million to the net sales growth. The company’s organic net sales also saw a 3.8% increase, driven by the Quest brand.

Despite the strong sales performance, the company’s net income slightly decreased to $41.1 million from $41.3 million in the previous year. Earnings per diluted share (EPS) came in at $0.40, slightly below last year’s $0.41. However, the adjusted diluted EPS met expectations at $0.51, reflecting a slight improvement from $0.50 in the previous year. The adjusted EBITDA also showed positive growth, increasing by 2.8% to $73.9 million compared to the previous year’s $71.9 million.

The company’s gross profit increased by 3.7% to $138.5 million, despite facing inflationary pressures. This growth was driven by the inclusion of OWYN and modest productivity and pricing benefits. However, the gross margin decreased by 350 basis points to 36.4%, primarily due to inflation and the impact of OWYN. Operating expenses rose by $4.3 million to $79.2 million, with significant contributions from general and administrative expenses, which increased due to the integration of OWYN.

Simply Good Foods Updates Fiscal Year 2025 Outlook
 

Looking ahead, Simply Good Foods has updated its fiscal year 2025 outlook, anticipating net sales to increase by 8.5% to 9.5%. The company expects adjusted EBITDA to grow by 4% to 5%, despite the headwind posed by an additional week in fiscal 2024, which impacts both net sales and adjusted EBITDA growth by approximately 2 percentage points. The inclusion of OWYN is expected to contribute significantly, with net sales projected at $145 million, aligning with previous guidance.

The company remains optimistic about its growth strategy, focusing on innovation, expanding product availability, and leveraging effective marketing to increase brand awareness. Despite the challenges posed by inflation and tariffs, Simply Good Foods is committed to offsetting these pressures through productivity improvements and cost-saving measures. The company also emphasizes the importance of integrating OWYN successfully to enhance its product portfolio and drive long-term growth.

Simply Good Foods’ fiscal year 2025 guidance assumes stable economic conditions and consistent consumer purchasing behavior. The company aims to maintain its leadership position in the nutritional snacking category by capitalizing on the growing demand for high-protein, low-sugar, and low-carb products. By continuing to innovate and invest in growth-driving initiatives, Simply Good Foods is well-positioned to deliver meaningful shareholder value in the coming years.

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