The Simply Good Foods stock holds Buy rating at Stifel after Q3 results

Investing.com - The Simply Good Foods (NASDAQ:SMPL) maintained its Buy rating at Stifel, with the firm reiterating a $38.00 price target following the company’s third-quarter fiscal 2025 results. According to InvestingPro data, the company maintains strong financial health with a GOOD overall rating and robust liquidity metrics.

The company reported quarterly EBITDA of $73.9 million, representing nearly 3% growth and exceeding Stifel’s estimate by $0.7 million. Retail takeaway increased 3% across the portfolio, with Quest and OWYN brands showing strong performance with 11% and 24% growth respectively, while Atkins declined 13%.

Organic sales grew 3.8%, driven by 15% growth in the Quest brand, offset by a 13% decline in Atkins and an 8% drop in international sales. Gross margin contracted by 350 basis points, aligning with Stifel’s expectations.

The Simply Good Foods lowered the high end of its fiscal year 2025 guidance, now projecting 8.5% to 9.5% sales growth, down from the previous 8.5% to 10.5% range. The company also adjusted its EBITDA growth forecast to 4% to 5%, compared to the earlier 4% to 6% projection.

The company noted that lapping an extra week from the previous fiscal year creates approximately a 2% drag on both reported sales and EBITDA growth for the current fiscal year.

In other recent news, The Simply Good Foods Group is preparing to release its third-quarter 2025 financial results on July 10. Analysts from Stifel and Citi have adjusted their price targets for the company, with Stifel lowering its target to $38 and Citi reducing it to $40, both maintaining a Buy rating. Stifel’s adjustment reflects concerns about weakening consumption trends and potential losses in Atkins distribution, while Citi anticipates a slight sales miss for the quarter. DA Davidson also revised its price target to $38, citing challenges such as cost inflation and tariff impacts, maintaining a Neutral rating.

In corporate governance updates, Simply Good Foods has appointed Christopher J. Bealer as the new Chief Financial Officer, effective July 3, 2025. Bealer brings extensive experience from previous roles at Reckitt Benckiser (LON:RKT) Group and Whirlpool Corporation (NYSE:WHR). Additionally, the company has amended its Executive Severance Plan, adjusting cash severance rates for certain executives in the event of a Qualifying Termination linked to a Change in Control.

UBS has initiated coverage on Simply Good Foods with a Neutral rating and a price target of $41, highlighting the company’s potential for mid-single-digit organic growth. The analysts at UBS see the company well-positioned to capitalize on consumer trends, although they note that the expected growth is already factored into market expectations. These developments collectively reflect the ongoing strategic adjustments and market evaluations surrounding Simply Good Foods.

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