SOVO - Sovos Brands stock surges on earnings beat strong sales guidance

2023-03-09 10:46:17 ET

Sovos Brands ( NASDAQ: SOVO ) stock surged to a double-digit gain on Thursday after reporting its pasta sauce is flying off the shelves.

For the fourth quarter, the Colorado-based parent of Rao’s pasta sauce posted $0.19 in earnings per share for the fourth quarter. Meanwhile, a 38.5% rise in revenue to $262.1M beat estimates by $30.61M. Rao’s sales rose 56% year over year to $187.7M in the quarter. Organic net sales growth of 28.4% was driven by 16.0% volume and 12.4% price increases.

“I am pleased to report an exceptional finish to the year as Sovos Brands generated nearly 30% Organic Net Sales and 40% Adjusted EBITDA growth in the fourth quarter,” CEO Todd Lachman commented. “In 2022, we delivered another year of sector-leading growth driven by both volume and price, reflecting a uniquely balanced growth profile relative to most of our peers.”

The company also noted that its divestment of the Birch Benders brand in January has increased focus on the Rao’s brand and the goal of growing the brang to $1B in annual net sales over time.

For fiscal year 2023, the company expects net sales in the range of $900M to $925 million, well above the $887.88M consensus expectation. Adjusted EBITDA is expected to range from $130M to $135 for 2023.

Shares of Sovos Brands ( SOVO ) rose 10.11% on Thursday.

Read more on the details of the earnings results .

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