Canopy Growth stock tumbles after announcing $200 million share sale plan
Investing.com -- Simply Good Foods Co (NASDAQ:SMPL) saw its shares slide more than 3% in premarket trading Thursday after the company narrowed its full-year outlook and reported a slight miss in Q3 revenue.
The company posted third-quarter earnings of $0.51 per share, narrowly topping the consensus estimate of $0.50. Revenue for the period came in at $381 million, just below the analyst expectations of $382.39 million.
Gross margin declined by 350 basis points year-over-year to 36.4%, reflecting ongoing cost pressures.
“I am pleased with the continued momentum on our business, with net sales up 14% highlighted by approximately 4% organic net sales growth. 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," said Geoff Tanner, President and CEO of Simply Good Foods.
For fiscal 2025, the company narrowed its full-year guidance. It expects net sales to grow between 8.5% and 9.5%, with OWYN contributing $145 million—at the midpoint of its prior range.
Adjusted EBITDA is projected to rise 4% to 5%. The outlook accounts for a 53rd week in fiscal 2024, which presents a roughly 2-percentage point headwind to growth in the current year.
"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 continued.
"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."
Gross margin is still seen declining about 200 basis points due to inflation and tariff-related costs, though the company anticipates some offset from productivity gains and pricing actions.