SMPL - Simply Good Foods leans on higher pricing to offset cost inflation

Simply Good Foods Company ( NASDAQ: SMPL ) reported a 7.0% increase in FQ1 sales to $301M. Net price realization was about a 9.8 percentage point contribution to net sales growth for the quarter and volume was off about 1.7 percentage points.

The Denver-based food company's North America net sales increased 7.8% in FQ1 driven by Quest and the international business declined 16.5% due to lower velocities, the timing of shipments and foreign exchange. Total Simply Good Foods combined measured and unmeasured channel U.S. retail takeaway increased about 14%.

Gross margin fell 450 basis points year-over-year to 36.9% of sales during the quarter. Ingredient and packaging cost inflation, as well as trade investment, was in line with expectations while logistics and contract manufacturer costs were greater than estimates.

Net income was reported at $35.9M vs $21.2M a year ago.

Looking ahead, SMPL sees sales increasing in FY23 slightly greater than the 4% to 6% long-term algorithm.

Shares of Simpky Good Foods ( SMPL ) fell 0.52% premarket to $38.00 vs. the 52-week trading range of $29.21 to $45.77.

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