Benzinga | Jul 1, 2021 03:55PM EDT

Simply Good Foods Beats On Q3 Earnings; Raises FY21 Outlook

* Simple Good Foods Co (NASDAQ:SMPL) reported third-quarter FY21 sales of $284 million, up 32% year-on-year, beating the consensus estimate of $244.29 million.

* The increase in revenue was driven by improved shopper traffic within brick and mortar retailers, particularly in the mass and convenience store channels.

* Gross profit was $121 million, with a gross margin expanding 140 basis points Y/Y to 42.6%.

* Operating expenses were $60.7 million, up 5.5% Y/Y, with an operating margin was 21.2%.

* Adjusted EBITDA increased 55.6% Y/Y to $67.5 million.

* Net income fell 87.7% Y/Y to $5.9 million. EPS of $0.43 beats the consensus of $0.29.

* The company generated $91.5 million in YTD operating cash flow and ended Q3 with cash and equivalents totaled $90 million.

* Outlook: Simply Good raised its FY21 sales guidance to $995 million - $1.005 billion from the previous $930 million - $940 million, versus the consensus of $947.7 million.

* Adjusted EBITDA outlook raised to $200 million - $205 million from $180 million - $185 million.

* "Given the anticipated inflation next year, in June, we notified customers of our plans to institute a price increase effective in September. The price increase will enable the company to maintain gross margin and continue to invest in initiatives that drive growth," said Joseph E. Scalzo, Chief Executive Officer.

* Price action: SMPL shares are trading higher by 1.53% at $37.07 on the last check Thursday.