Simply Good Foods Q4 revenue beats estimates; cuts guidance

Overview

• U.S. nutritional snacking firm's Q4 revenue fell 10% but beat analyst expectations

• Adjusted EPS for Q4 beat analyst expectations

• Company cites weaker retail takeaway and distribution pressure for sales decline

Outlook

• Company expects FY27 net sales to decline 13%-17% year-over-year

• Gross margin for FY27 expected to rise 250-300 basis points year-over-year

• Adjusted EBITDA for FY27 expected to decline 9%-14% year-over-year

Result Drivers

• RETAIL TAKEAWAY AND DISTRIBUTION PRESSURE - Co said Q4 sales decline was driven by weaker retail takeaway and velocity-related distribution pressure

• HIGHER INPUT COSTS AND RESTRUCTURING - Co attributed lower gross profit to volume declines, higher input costs and restructuring costs

• COST STRUCTURE AND MARKETING RESET - Co said it accelerated cost structure improvements and overhauled marketing approach across brands

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for The Simply Good Foods Company is $14.00, about 38.8% above its October 26 closing price of $10.09

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• Oct 26 - Medifast Q3 revenue falls on fewer active earning coaches

• Oct 27 - Smithfield Foods Q3 sales miss on lower pork commodity markets

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)