Shares of Simply Good Foods Co (NASDAQ:SMPL) slipped more than 3% in Thursday’s premarket session after the company posted mixed third-quarter results and tightened its full-year guidance for fiscal 2025.
For Q3, the company reported earnings of $0.51 per share, slightly above Wall Street’s estimate of $0.50. However, revenue for the period came in at $381 million, just missing the forecast of $382.39 million.
The company’s gross margin declined by 350 basis points year-over-year to 36.4%, driven largely by persistent cost pressures tied to inflation and tariffs.
“I am pleased with the continued momentum on our business, with net sales up 14% highlighted by approximately 4% organic net sales growth,” said Geoff Tanner, President and CEO. “Consumption increased double-digits again for both Quest and OWYN which, in aggregate, represent about 70% of net sales today, while Atkins remained under pressure, as expected.”
Looking ahead, Simply Good Foods adjusted its fiscal 2025 guidance, projecting net sales growth of 8.5% to 9.5%, with OWYN contributing $145 million—the midpoint of its prior forecast.
The company now anticipates adjusted EBITDA to rise by 4% to 5% for the full year. It also noted that the presence of a 53rd week in fiscal 2024 is expected to shave about 2 percentage points off comparable growth in fiscal 2025.
“Considering our year-to-date performance on the top and bottom line, and trends to begin the fourth quarter, we are narrowing our full-year outlook,” Tanner added. “I want to commend our teams for their tenacity amidst a dynamic operating environment in delivering a year where we expect to generate approximately 3% organic net sales growth and mid-single-digit Adjusted EBITDA growth, as well as to successfully integrate OWYN.”
Despite the lowered forecast, the company sees potential offsets to margin pressure through pricing actions and productivity improvements, although gross margin is still expected to decline around 200 basis points this fiscal year.
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