SMPL - Earnings call transcript Q4 2024 | The Simply Good Foods Company

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Operator

Ladies and gentlemen, good morning, and welcome to the Simply Good Foods Company Fiscal Fourth Quarter 2021 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Pogharian, Vice President of Investor Relations. Please go ahead, sir.

Mark Pogharian

Thank you, operator. morning. Good welcome Call. Simply to Fourth Foods to Earnings Quarter you pleased Good the Company I'm fiscal and August that XX Note QX and for reflect XX the results weeks ended XX, full XXXX. year amounts with a and CEO; will Mara, provide results, Geoff Tanner, an followed and of by President overview be session. CFO, Shaun will you Q&A then which company issued X:XX approximately a.m. its The earnings at release this morning the under website of copy release the at section Time. A slides available and Eastern are the Investors of www.thesimplygoodfoodscompany.com. presentation webcast, archive of being will and be available. remarks is also call This an today's

Tanner, business, CEO. therefore, I'll completed basis accordance EPS. and with adjusted XX the Foods GAAP. to The turn XXXX, press in Good A excluding an be the During relates information quarter make investors. Due on we legacy materially. The the of press in full and about reference Foods and financial to that call risks financial model, today's may and call, SEC certain to it weeks and management flow on obligation on measures was cash course diluted detailed non-GAAP cause of company's will today's will Simply over uncertainties believe events. these historical undertakes now we performance company's XX, that company our today's June forward-looking provide various performance. The listing measures call, include for a EBITDA comparable most will fourth update of OWYN. on Good Please Jeff uncertainties prepared evaluate business the differ for measures to subject statements non-GAAP filings. refer today's based to the to full to encompasses XXXX owned are such of to refer the President as to Note release reconciliation we no to actual and OWYN asset-light the strong year results that acquisition company's found statements risks of can release results Simply subsequent these

Geoff Tanner

X%. Good XXrd less Mark. in net XX.X%. a and X results Shaun morning. the with joining the up XXXX of for our sales sales Simply we performance more X% Foods' chip contributor financial Thank of than of and with X results was I'll questions. We're North recap growth. net about our seconds discussion outlook about Quest in pleased and due basis, percentage Then in week your performance before increasing a with our results OWYN detail you, Thank it to constraints expected a our and On increased wrap acquisition financial Quest The brands. to Good like-for-like with fourth you temporary line estimate. fiscal point America declined Atkins will discuss are quarter us. fiscal was supply Today, our financial

full fourth year channels in retail gross and XX% Our fiscal of year resulted OWYN and off XX% increase Foods quarter Atkins was including an was XXXX of Good in both QX POS ago about the for improvement measured and and continued compared the periods. Quest full Total And unmeasured the combined margin about year XX%. was Simply and and adjusted million, X% period. X%. EBITDA the OWYN takeaway $XX.X to

full all Key cup growth the bars, increased nutritional year by chips, Importantly, snacking XXXX. strong, remained driven including both shakes fiscal in category volume. and category, segments and of QX

with retailers develop adviser accelerate aisle to the and customers will work in our growth. support and category to are category most at continue We further to initiatives

multiyear and well snacking and of maintain growth momentum tailwinds penetration, its as low to health twin the wellness category is Given its the household as expected and trajectory.

progressing strategic our the category objectives. believe we to we prospects against we're positioned are fiscal to and innovation, on our look excited on closed and the we trial early availability our well and work focusing XXXX, about in QX, and OWYN business, is we deliver penetration. The our and planned. physical marketing integration acquisition will expect increased for We'll that as increased household As drive initiatives, execute

with of future pleased significant very our and and brand be will to through margin the create cost businesses combination this X believe shareholder growth, revenue continue synergies. We expansion value

in Shaun in expected the as algorithm. fiscal you with in week as XXXX. of the with line provide Fiscal our results company's outlook, details but are well a year the ON of XXrd comparable exclusion XXXX the to is will be of assuming XXXX full XXXX long-term fiscal included fiscal

sales you greater IRI, growth sales and our category opportunities. slightly by growth universe The as similar net a category. for X.X%, snacking in X% measured and adjusted as channels as performance measured category provides the growth primarily X% next MULO plus retail performance Nutritional QX of combined growth last continues down channels a takeaway about the net increase. a XX%, the increasingly look is slide and takeaway in the the in driven measured snacking Quest about OWYN was well quarter. perspective and X% retail in of to our they measured the volume. The channels than with outpace standout unmeasured Atkins to increased EBITDA within C-store be category, growth partners and focus Specifically, retail range channels. and nutritional was performance and X% to in

continues do business well. to e-commerce Our

Simply is As nearly retail additive channels X points channel unmatched total to percentage a measured Foods Good and takeaway result, POS.

retailers. turn and was primarily outs Let due and In that X% retail measured Consumption growth to temporary versus QX, combined to slowed Quest. unmeasured in chips constraints in me now stock channels measured at QX, XX%. capacity and resulted takeaway

capacity channels. Quest and in than increased partially by measured retail snacks QX. combined basis points slowed competitive POS to distribution Additionally, retail pleased a snacks XX% is specialty quarter salty respectively. that driven retail retail during greater the be channels and E-commerce represents X%, challenges, was growth our about growth XX%, takeaway we QX, the we bars Quest which XX%, channel temporary by Despite retail the of chip on strong to offset in of due learning supply e-commerce increased XXX during keep takeaway and softness In the continue our We takeaway nearly unmeasured of a the unmeasured and total fully line in and some XX% increased shelves standout impacted get about second constraints up brought it we bar category. estimate stocked. saw category and time and XX% curve. ability the about was quarter, sales. Temp's chips to took to the manufacturing promotions in with some that strength

upcoming in use season normal activity select lines. for segment production exit new we some bar year, growth quarter to distribution November, and accelerated Therefore, As Quest we that February. These retailers strong And year, overload to Quest now bar first This the in with to new X expect news takeaway the XXXX. channel new should to supply are with that chips us have volume will X% be any well in the universe. unique back launch the platform fiscal will in anticipate we Bar increased, QX we by increase competition bring fiscal a at measured into will wins. retail we driven of inclusion XX%. and that result XXXX, the of driven segment. excitement by will loaded response, have of distribution new mouth bars promotional another have and starting variety, feel entrants and In the of texture positions

trial recovery test we earlier, to customer Quest the this this fiscal the business. production the CHIP's chips. fiscal of you'll items fiscal mentioned As increased XXXX demand lead with to in flexibility XXXX, nationwide have regional discussed. In fourth XXXX, in to retailer already meet of fast-growing broader has begun. With of that I a a quarter small lines, could success, year just an that presence. At we second partnered on bottom club expanded X the this with for have of slide, Due I key the a the images of innovation half note large we'll

in and our estimates. with nicely Gap] [Audio Additionally line

media Quest focused. In XXXX, and advertising all core this products full of year innovation benefit products. drive chips advertising greater the we portion in have large Importantly, of higher an Recall awareness debuted will particularly will mid-March consumption, was immediate Quest cheating household which expect the where lift of the full even drove weights, is and a a year will almost marketing be campaign supported with it's and as successful, basically in campaign. penetration at fiscal a we

relatively measured Amazon to combined QX takeaway and X%. were and consistent. was Turning XX%. retail channels sales off POS Atkin's QX, whose Strong in by X% and unmeasured was driven In measured action. retail growth dollar continued, growth e-commerce

the RTD QX, improved during the on similar very week-to-week was period due last and of the in basis. was partially same retail combined $XX.X in about measured million weeks shakes channels as This unmeasured measured XX ago year where average weekly Specifically, and the and a takeaway channels. was to dollars

the we have of on the believe scheduled. long-term that right confident as given to is the in growth. back weight with execution I'm conversation continue renewed and progressing cultural revitalization vitality We to brand, the to are and of relevance place pleased plan we the Atkins bring in Acton plans the

Some market fiscal we elements elements of the exit expect be as the and in XXXX. all plan year in are now, to market we

fall the shelf in our the the tracking conjunction estimates. marketplace While rolling with resets innovation early, is in out to

gummy suite a ready-to-drink new Atkins bears and Atkins innovation a the protein including across full wafer bar We truffles. of confectionery have Dodge XX-gram shake, forms Strong and and

at distribution us key food enabled and mass innovation Our maintain customers. to

in items more shake space-constrained bold see. Note the soon. as our in some in channel of work resets. logo, more a However, or The the packaging progressing packaging. look, middle new is new strong A we fresh is anticipate club reformulation here you'll come what to be indication risk the modern new shelf at as more Atkins including an the as upgrades do Product that could spring well

we atkins.com new refreshed. website and was air As the advertising XXXX, Atkin's exited was fiscal on

it, the sustainable more as as on been communicates one, weight views macro links If and free the owns the has anyone positioned for Atkins.com unique of revised user-friendly. nutrient games. The focused management; way to each consumer has GLP-X weight benefit profile who clearly free Atkins website messaging on one spots wellness. contemporized Notably, users lost to and diet to wellness. We is refreshed conversation and three, better this a two, and a Atkins hold brand's you their evolving sustainable specifically or on and emphasizes believe weight advertising, eating to the the of weight haven't communicates more diet seen weight and strongly

As their wellness is help goals. customizable has it with case, loaded tools consumers to always been the weight achieve

Atkins While we business. ensure sustainable need on recognize a long-term the brands, also work we to revitalizing is

We'll losses. will levels, beginning we declines breakeven that spending ROI we will discontinue hurdles. XXXX some some don't due specific investment eliminating in also specifically and meet as such, fiscal volume to optimize This as As expect trade ROI export reduction business. and as to in sales distribution work well fiscal Canada impact our marketing XXXX, investments growth the

progress Atkin's spend. aforementioned future. to As conclude, retail year such, single of which XXXX we positioning brand in planned full digits, to To anticipate succeed we're is lower making fiscal and half the takeaway decline the due the to high

to However, as take will there. we have stated, some get previously it time

continues we the on deliver is Turning strong the both unmeasured brand and to to OWYN. and potential channels growth. takeaway measured velocity Retail in distribution This envisioned. with

fiscal year customer across POS a remain or U.S. channel We Assuming XX% third growth sales. in operations, significantly is ACV it's dollar brand benefited increased to acquisition integrate our in In retail OWYN universe, customers. our deliver into takeaway OWYN to customers. higher OWYN retail by with on growing With all at one measured in the And from or velocities sports solid the commitments. In the fastest and full in net not largest growth distribution nutrition in year XXXX, XXXX retailers. new sales XXXX, line into accelerated full and multipack fiscal OWYN relatively the model are each effectively confident select of major business other. ability and channel. OWYN expect of items QX has the driven XX% we SKUs increased and and

is a underway million fiscal versus $XXX XXXX, year. The XX% As to planned. XX% last OWYN expect increase range million $XXX the and in also progressing integration such, to as we the to be in work net sales

and result we majority the the should billion high adjusted a forms. snacking Simply with achieve or onset As fiscal believe for products our on the increase from food trust first relevance our a high-protein, about synergies, in The with reminder, the year-end continues align help This to will fiscal aligned XXXX, trends. more -- goals. are Consumers brands only positioned of carb, consumer wellness to our day our and category fiscal consumers XX% of positioned category of more low-carb achieve them high-sugar margin and represent uniquely at of in $X.X EBITDA these have that brands nutritional brands leader summarize, options. We XXXX future portfolio beverage, category as across sales the and and diversified our low-sugar, their to of brands as a mid-teens. To is we X turn and food demand seeking mega Foods the Good uniquely product XXXX. high around net to away

on we're help focused plans and with provide journey. products such, our As consumers marketing to their them in to innovation

execute high deliver at growth us will fiscal objectives to which us the for doing our to enable 'XX, we well The results our shareholder of value. should algorithm. expect enable continue achieve will long-term we're We drive long-term priorities our strategic fiscal that us in on ultimately increased work XXXX positions end that to

financial over details. the will turn I will some call to you provide who greater Shaun, Now with

Shaun Mara

overview year growth, XXrd that sales net net Simply increased XX.X% sales a of was ago the the X%. drivers net growth the percentage benefit. point contribution week week, everyone. were about less period. increased and X.X% and increased versus of Legacy Full slightly $X.XX Legacy good week X percentage the year net versus billion to extra year sales excluding were the period. OWYN percentage primary including about sales The an quarter the of the net Thank the was growth. Foods million sales you, ago Good net X.X benefit, X.X%, I net fourth our benefit point point a and of with than X sales growth. a will Total XXrd begin acquisition X sales. OWYN respectively, $XXX.X Jeff, of morning, that increased

fiscal exited but below levels, slightly we inventory to XXXX, retail returned fiscal XXXX. normal As the

with full levels, takeaway, than slightly The reduction retail resulted in trade legacy year greater in retail inventory combined sales. additional incremental net investments

Moving step-up packaging business noncash to million million, inventory acquisition. purchase Gross the for legacy $XX.X on ingredient OWYN the period, to partially an increase and driven $XXX lower profit related of the other was accounting offset year ago P&L quarter. by costs, a from by items adjustment

The of million, the As gross costs, OWYN. GAAP result, was investments last the increase and million year. OWYN, was a of basis year was and by expenses year. the primarily accounting last a integration G&A to noncash an XX million, $XX.X point marketing gross Adjusted points. increased to $XX.X from margin $XX.X of inventory million Selling $XX.X due basis due ago increase expenses in marketing XXX were $XX.X to EBITDA inclusion affected growth versus million, increase adversely primarily and purchase initiatives as XX.X%, employee-related stock-based margin increased of an increase inclusion $XX versus step-up well million transition higher The compensation, as executive period. costs.

G&A as million. Excluding well $X.X integration costs, million increased transition stock-based executive QX and of $XX.X as compensation

the quarter of of fourth incurred the in OWYN million. acquisition $XX.X related fiscal the to XXXX, Additionally, company costs

a Net XX.X%, effective ago due of to QX was driven the expense acquisition. by And tax Finally, of interest than quarter the OWYN million, primarily year debt higher $X increase ago interest and due period acquisition. fourth rate income the an our million fiscal the about slightly was increase higher OWYN versus period year the to versus XXXX. The is $X.X balance

net $XX.X result, million versus million a was $XX.X last As year. income

inventory costs, to to Moving results. and partially packaging period. Gross year to acquisition. was increase adjustment due of a million, lower ago was to million LSI on by the an $XXX.X purchase by $XX.X the step-up the $X.X profit business driven year ingredient related million noncash The full increase compared OWYN offset accounting

with inventory margin adversely last XX fiscal gross by year. The purchase We're our result, basis pleased progress XXXX. gross XX.X% affected accounting points. a in basis gross versus point XXX a was and increase step-up As margin noncash margin

total input result a headwind we cost that OWYN Adjusted this and anticipate margin. year. increase basis million, XXXX, X in a of margin an However, be about gross will X.X% inflation $XXX.X to contraction basis in was last gross point XX points. Note, about fiscal includes has company versus of EBITDA headwind

the decline component full expense due the income ago interest million. Net prior year company the year. acquisition a was for term the acquisition last period. versus interest was debt million costs year of the expense decline OWYN to $X.X to XXXX, $XX.X and loan balance a interest lower $XX.X The to related of fiscal addition, In OWYN incurred versus million,

Our to fiscal similar. was anticipate we tax fiscal and XXXX be XXXX X% rate about

As was slide EPS period. Note share $XXX.X income taxes. $X.XX to next of an explanation for a adjusted share The XXXX. was expense today's diluted diluted Adjusted to as versus year. EPS last provides income diluted EPS. interest of release was and million in Please compared result, income, per financial calculate share with adjusted in million the diluted that to net Fourth a per non-GAAP reported reconciliation and and quarter adjusted $XXX.X press diluted compared less per $X.XX you EBITDA, reported $X.XX $X.XX we measures. reconciliation refer interest year-ago EPS

balance to cash quarter by is provided sheet the activities about operating $XX of cash company. flow and Moving hallmark a $XXX the million. Fourth was and Strong and flow. million cash full year

XXXX. including EBITDA expense our XXXX, the expected to be We be in million, to to the by is August $XX or fiscal XX, its resulting X.X about around fees. $XXX be financing was XXXX, XXXX, $XXX expenditures Xx. we $XX a noncash were And a million at million. In deferred of the XXXX to XX-month million. the in outstanding anticipate debt turn adjusted As million related million loan. million anticipate had fiscal net term to of CapEx of Capital the expense net the in at year-end ratio debt end amortization ratio to balance of repaid company to $XX $XXX.X net result, adjusted million, interest range. In to fiscal fiscal EBITDA $XX year, cash currently principal better the trailing $X.X company XXXX, In

up. wrap to Now

to on our and we're takeaway a believe to good retail we track XXXX plans. early, is off fiscal year start, While deliver

expect We marketplace. strengthen in continue making in against the the and business our our to execute are we investments that brands strategic initiatives will

Our integration well planned. is work underway progressing and as

in fiscal expect velocity, Quest driven net We marketing greater growth in and investments. distribution, sales increased OWYN and XXXX, by strong takeover retail innovation

XXXX, XXXX, earlier, to Atkins in term. in will sustainable fiscal net XXXX, the fiscal retail profitable believe investments. This and on inflation. this the company As to discussed Akins to sales continues focusing necessary we Jeff brand ensure optimizing affect fiscal a Atkins takeaway and we're remains long related is ROIs over input cost expect In business but

in costs. cost partially and place higher initiatives offset product Solid savings these that are

unprecedented imports, X million fiscal $XXX company to Note the is the reported gross about that, fiscal given year XXXX, cost fiscal in net company comparison to sales expected However, and a XXXX. both to point in X% we expected increase XXrd increase XXXX compression increase total X%. X.X% in adjusted growth EBITDA that to headwind anticipate full is full of sales the fiscal XXXX to $XXX be XXXX. select the we in XX.X%. anticipate EBITDA year percentage OWYN million Therefore, in margin reported adjusted in fiscal in Embedded sales are net to week net to range. Total year

year with algorithm. Lastly, XXXX OWYN in are full Fiscal line XXrd fiscal well to week assuming results the the exclusion company's be a in long-term XXXX as is comparable included expected of the in fiscal as XXXX.

to and adjusted slightly Specifically, net X% the sales greater than in the EBITDA net growth increase. sales growth range X%

take at bottom for line results we're should end appreciate which and very us available everybody's achieve company, in work your our of high our we top fiscal well Just the overlook. now and us in XXXX doing fiscal as positions enable believe importantly, XXXX, to questions. long-term we're the interest We to

Operator

[Operator with Brian comes line from Davidson. first the Our question of Holland Instructions] D.A.

Brian Holland

seem shop coffee some and starting well. performing of looking we quite Maybe of be the innovation, with recent to bake drinks, specifically some the just at

of the before an standpoint you're any perspective what cycles struggles gone about and company? quiet provide innovation at You've some from these vis-a-vis the previous talked seeing of a incrementality innovation you then can so having launches, for the that far while little about

Geoff Tanner

Yes.

innovation with start bank me specifically Let Quest on and shop.

us. launch for read. a We're early by So big encouraged platform the it's

retailers that's protein, better is innovation. in and low-carb it's is It's our bakers. XX on recall, checked -- brownie, power a grams gram is even distribution of a Certainly, feedback also encouraging. That protein performance this which is all on addressable you sugar. platform boxes hits If or some is X best-performing a very sizable Where sugar. sweet motor the flavor, it market, a in taste, on targeting of

distribution, talk I'm Chips, the which very probably about on the in still building but sure innings, So early call. encouraging. we'll

out. historically It's we recover source a that. We've we and today. continue million massive mainstream got see it's to of addressable about -- XX%. where largest market, supply, coming As a $XXX at the to drive we tax. XX% new growing business Again volume from salty flavors

And level, with does inroads salty we're high very a on What the snacks Quest flips innovation. on seeing at we've what addressable Quest the now encouraged it by So macros based. is large made into stacks.

You then the delicious. can store close out inclusion, we're chockful identifying the spaces looking around we to is just it's have launch overload accelerated bar, of And can other the which where believe disrupt. we Quest, of on the

seen units We in week large case SKUs, that In items a of X core. our had and to And this business on the innovating we've On it slowdown in of actions to Atkins, replacing innovation performing on when per organization, are these I've also of Atkins, marketplace say, what of where innovation with innovation stated is did the the to calls, as replacing underperforming jump-start doing previous I customer, recent efforts contributed slate state X, doing well. is is new or business. Credit X.X team. there. to on needed the was the it the the the we're joined a pipeline The performance. And that a not key be, so X.X. Walmart driver we're items

Arkanstrong, that it that they're on of and performance underscores innovation of how velocity rule thumb the is troubles, kind replacing, gummies, of items the be doubled whether there critical Atkins. So the the just the

to made focus with is a bring it for looking underperforming can have sure the items key better so we actions, items, to we're we're items but largely we business. to now on And filling continue replace so that that market pipeline

Shaun Mara

on them you -- Just I SKUs piece, Walmart, the Just pro maybe XX fall as just an -- out at time kind reset. say if They took Atkins the I'd they look about about example, the for or X to of think of a X we is XX innovation That was times dimensionalize a what times they with saying, week for innovation. replace. stuff replaced week opposed Geoff to SKUs turning XX as

So it's been read a on Atkins. good innovation early for early,

Brian Holland

No, great color. period then can new looking directions. and Appreciate know innovation just that this to And follows that. the historically, I into point. on maybe be volatile in both

season. You had didn't 'XX. called supply who XX the and out 'XX, participant have earlier resolution another supply category adequate impacted in in adequate by

heightened know at fall years? may As couple issues know as the shelf whether early sets, of we not or more XXXX, past you we in look somebody that until the stock, in any a stable stable been there any of I look But setup feel like have at than of in out stock we're do 'XX. some kind of or we more backdrop we whatever. a into if are sense we're competitive place

Geoff Tanner

stock. we outsized As I and competitor I'm of well. sets, out year, was to your somewhat an anomaly support look with and lapping how shelf received shell at we large were made on this you pleased lapping To we where of we period very both a it OWYN businesses as point, -- being performed last the because were had point, due a fall

was for that us. So difficult lap a

the by place. encouraged I'm Year, New Year, New we upcoming in plans this have to forward Looking

point, do know a know category. have To this much is point. position. what We set don't you a at at every We plans very more our customer. the customer, your put which should we'll competitive merchandising with again, teams it's March. I'm But up February, in going built But strong pleased in how us plans to the strong customer by competition

Operator

the question from next with Stifel. Smith The is line Matt of

Matthew Smith

I legacy in the outlook around the a bit wanted in business 'XX. little growth underlying fiscal to dig for

distribution optimizing or think some underlying the improving But there. get second trade like-for-like or Atkins, on a implies I growth the you half Quest quarter, first including of basis. here, you there's like year. And lower in optimizing in have spend guidance X% few parts moving new -- a the on the you're capacity

phasing year you one for of can the given brands with parts each the there? to due So growth help the those of moving

Geoff Tanner

Phasing terms quarterly of in growth.

Matthew Smith

there's Atkins should back we year the be decline into if shape Just trade considering? think changing we account merchandising on the take we should is pulling through that the when unique support, any consideration that about and of

Geoff Tanner

a somewhat I quarters, I reported a you we flattish will range EBITDA, X and low maybe of XX up margin to the depending is, -- in to per just take your onetime of on just about way. That standpoint, double of then if on where quarters year the about rest be low high impact QX, earlier a Yes. single kind back general, sales on reported a look first slightly step quarter reported at down guidance mean digits costs QX. basis, in on excludes first down of and basis gross think net close flat where going in to I'll the talked that call. the similar the the and benefit in you're XX QX from the step-up should mid- QX then be mid-teens. weeks period we're X.XX and because then week year-ago digits depending on included the guidance should points so OWYN. And input the in to the to on of basis up be the kind lower From

know don't for, I what if you're So that... looking that's

Matthew Smith

$X.XX channels. end of week we that per customer comment idea October. chips, in. club on dock talked million back you the million measured should a a a we just the I We've of per test the $X We've closer million million. And And been range you to ended I this $X that. with but expect in the get in because flow. great to we we is that's an No, how -- in would of We've about great. remarks, Quest scripted color give trending the to up added starting the trending outs, operational. got the in business give range coming which had been to large sites appreciate got partner, week $X -- just X

look and should you X the new year, growth flow to how if right what is consumption that you're you X, versus Quest think seeing that So as trends look the points perhaps at probably adding you now. going at into to

Shaun Mara

related kind Matt, think there. The of is you were around I'd other Atkins' thing, to POS, I poking say

I and weeks that it's of the first year. see little think January a August to the softer in X going for through trending fiscal you're where

October-ish, investments fiscal continues have cuts seen of and starts year. We it of underlying really the through in kind not the in then kind

we is softer go see today. you'll through it versus the where So as year

Operator

next Anderson The William from question Jon is Blair. from

Jon Andersen

little business? kind a it there know And certain to challenging baked is XX% brand. ask wanted by for I Atkins has Is communicated lower looks brand just new I digits. the triple XX%. of both for looks assumptions kind It in? for to Is or quite to element communicated about been like running of a there to about in a OWYN of it with Quest for for scans, you like bit and that us but the XXXX? up OWYN. bit the comparisons Can conservatism assumptions recent talk more you've It you line in fiscal point-of-sale a dynamic closer OWYN your 'XX are

Geoff Tanner

I No, the question. Yes. appreciate

the fast-growing and We Sam's new and about business around and in it clear this and it's because XX. be presence synergies. To we big performance, a is up It's XX for our purchased measured this a XX% expands point, category, obvious Club look outlet. plant cost fastest-growing continue at shake if clean And multipack like current to reaches consumer, acquisition excited and exceptionally strong. both channels, protein driver. your label you looking all shake

growth You're customer. every seeing in significant

customer. it's one not just So

business now core. is driving right focus this on Our the

So then will which the synergies, perhaps larger a expanding delivering integrating in business, number of the adding on pack the doors, and hit 'XX.

In opportunities. lower number, have said, still as significant of 'XX, and fiscal and we're growth why some the terms pack I But voids, fiscal lapping channels. In new we a more it's distribution and go growth fiscal filling we sizes saw our -- a stores pipes. in distribution 'XX, in into there's 'XX out they as

to we the look we'll to be voids, increased fill a significant same that push pack recent at the So but won't the it currently driven is very have much level seeing look to distribution benefit. by growth drive continue sizes,

Shaun Mara

higher of second lapped that think half you're I OWYN We in full trends the in half going the to they are see year. of stuff for year. first And consumption the year, than really the the

Jon Andersen

helpful. That's

Just And then have on some level some, overall know I a the Quest of marketing. then your messaging. Can ROI basically level the kind of and cheating spending, in think, And sense tweaked of state the the I you now at I you've getting marketing follow-up about marketing and programs the by today of campaigns messaging you your there? talk the Atkins. right data on are marketing you the for market you're of brand? it's around guess,

Geoff Tanner

Yes.

me And -- short campaign. year In Let a a have revisit start and it's full I've was of site on it's campaign. with very Quest. Quest through will on chips. for XXXX, happened to basically exactly and XX That's see to the we and what the chips drive us have consumption. Candidly, what almost significant a market increase cheating fiscal long-term causes lift a rare with been really second over that campaign significant sales. saw years, where that's in to instant we in

that the excited early On a increase over XX% that. we're wait emphasizes top X-ish to Nielsen XXXX, the the support good advertising market. And one and What Quest. ads of the advertising Atkins see so we've And squarely has I in it still testing, and on profile with advertising Atkins, brand weight zip fiscal full recently into macronutrient until a to is levels boring advertising seen you'll didn't a dropped euro Quest really benefit spot will in of was that Getting say our up the new drugs. that. year see particularly referenced positions our of probably range, testing, that It's more an it increase September. The start advertising new loss code. unique as that

learning putting advertising from promise a to to cultural a back relevant weight this is So it going what we're early I'm of I encouraged and little brand, optimistic. the which in is the core context. wellness tell. But think It's

For consumers, of weight. the being lose who that are loss consumers solution very want clear example, weight the to the to new and drugs XX% we

of it some the marketing, of saying of that be we we close mid-single-digit by actions which is to back nonworking come probably are level but there the in cuts areas gotten will the those be. Most now throttling to ahead wanted So impact I'll one have on impact. had of media where impact, actual

Shaun Mara

And in of terms just Yes. level of spend.

But mid- I as nonworking that low overall a cut a a probably Xs 'XX of actually company. of we as percentage we Xs probably Jeff back. big is to we're marketing results, as are said, think if you that sales chunk media at look that be low will

as it So spend I look for 'XX. go next thing in OWYN bit. business kind over at next grow rate, we think of growth to to as business. to rates, of of X that, the terms to of the on XX% want right we get year I to further a a back for where XX% doubled that and it's we are for we'll think now. We'll just little If growth evaluate dimensionalize we've probably right just we into the continue level XX% the XX% the is years,

like not growth the it's overall on it's So an business. insignificant

Operator

next is Howard Alexia The from Bernstein. question from

Alexia Howard

marketing growth with sounds promotion, to we pullback the sticking sales mentioned, It distribution that you've pullback me in headwinds 'XX? a we the and back point, this bit positive line election until saying losses. fiscal top basically to expect possibility just of given Atkins. a in shouldn't though Are the of as organically So an at

Geoff Tanner

I fair. think mean, I that's

breakeven have The they're a of been but investments. impact cuts the come will like difficult, the small lose has that fiscal new that have our remember we packaging most getting on But we choices the negative new Alexia, focus of we're there on the decisions of I'm these coming. media. to in will a it but the seeing expect And advertising, volume that, or performing got accelerated whether nonworking, are is slight space-constrained Canada we but made be very the a encouraged, it's the certainly despite made, low channel is plan, we've it's right early, -- predominance decline positive innovation you marketing, XXXX. that is club, spend a we've rightsize impact to business. revitalization on should that that new from more well, out including be have So to net X. That ROI And effect expecting in Atkins. But expect signals to of

to to we'd Looking it but now. we these decided see thinking have and see issues, forward, our just like we've continue sequential improvement, do to to address is

Shaun Mara

take little mention Yes. to just -- just And a I bit. can

the innovation at base basically, look are the investment in to discontinuing kind to Atkins, we on you the QX. Effectively, losses next gave as decline the of overall. high channel. on distribution single-digit down. it if consumption, improve the We're make eliminating, business of think phase going guidance is I velocity we We're going and versus we think declines break on expected to said, offset our effectively profitable We decisions at reassess half levels. is club investments, in basically decline be breakeven Jeff we'll going Canada

market out end fiscal also the of until the of the elements not in all point I'd that plan 'XX. are

fall, help Walmart to to business get more overall. for should continue we said an as So which going as example we're the lower-performing this we SKUs, replace for like innovation,

ourselves impact 'XX sets So nicely will some but there for I 'XX... be think in it up

Geoff Tanner

is bid and modern, and profitable one for on goal we on relevant, can that that long Yes. Atkins sustainable a the is the brands contemporary term.

Alexia Howard

the the a able to potential club from Perfect. you follow-up, And Quest, are quantify then on as customer benefit rollout.

in much was how that as the percentage Any half how you'll a as brand? fiscal said of views you Quest think the give distribution that percentage second to might probably points many or on gain sales on the you I year.

Geoff Tanner

share with little we we're most specific very on customer, West With had and the performance. the pleased -- small, numbers or with numbers a a test growth Like dollar this Yes. to customer. reluctant this Coast, by very regional

performance, Based nationwide our on test. have a way now we

Now it's a customer. significant

not I we in test, potential it But insignificant with can have is and it amount, but this still an chips if as prove upside business, a it's appreciate we out. significant. you starting still our So view test I'm to to perform the sure

Operator

with next Securities. the is The Mizu of question John from Baumgartner line

Unknown Analyst

Isabella on John. is for This

from discounting faced in business, looks the increased bars like So distribution brand from terms elevated some Quest recently some competition brands the has of smaller and it the in category.

you growth have maybe given Quest full reasonable Quest it expectations demand For what competition, drivers what the relative are brand. about Has And this learned 'XX? think reason year year for about for any from Bar's example, is revenue differently the for the mid-single-digit your to So fiscal to is think bars? like it you in achievable?

Geoff Tanner

Yes.

say, And protein category, part look bars X% category, it's at category that think when bars. mature has business. not in baked we increased you, chip is bars, overall you X% quite bars, around QX. look that were if protein take to significant bar up, for look Quest protein a -- at on obviously, goods. It we high about the level. at step versus, not of bars, business but better a Quest we're recall a that focused the or the As and the more bar But back

pretty a I it me. response, unacceptable TeamQuest. strongly news, accelerating the responds to that the pulling is healthy, launch the that of as forward have, earlier, new February. cheating up that pace to is incredibly with chockful campaign. overall leader or by is the category this In is delicious category the that are It's support So in firstly, unacceptable basically -- we and X% of keeping overload platform, not to with an X%. platform, We're as quite category we'll This mentioned inclusions it's to marketing we and

going seen also competitor come We we seen category, that. of are, context space. acknowledge we respond bar that global That's to not have we but in the some And and competition in to are we in. have the new

act cannibalization leader would you contest channels. And sharpening also as by that some for points launch I as highly We're cannibalization incremental XXX% big going is no but and key the would and business, the likely As we're that highly, seeing to some part leader, to as and are of not we a business. bars, expect, way. price assured, Quest chips, probably the [indiscernible] launch market expect the we incremental. But rest we

step and best, defend going up there. do does is innovation We our house, and just our which bring world-class we're game what are going Quest to to

Shaun Mara

Yes.

single say this, about be to we're as XX%, points. into going the overall the to digit Quest would the think price quarter for year, headwind the we having now we're these I the kind bar I as of of first the right you sort spend sharpening think for the I on is in just low plan think would year. have get flattish

However, overall bars when I first for out, all look including weeks X% quarter, the at Quest. the consumption up of in quarter-to-date we're X in

some So we're progress making there.

like were I As we in Jeff where kind we're yet, feel exactly but want be QX. to from said, back not we bouncing where of

Unknown Analyst

then ahead shakes volume appreciable is it the taking for learning a anything bring from the of you plant-based have incremental Or other about to can protein? Is sourcing how to think the few of the OWYN it from that from in you amount there category the away business, an sales And business? category? are Great. what more dairy to And other of Is ability experience OWYN? to already once consumers about you market? OWYN's take bring do brands scale plant-based begun shakes you

Geoff Tanner

Yes.

in So as saw I on said business. we really delivering we to earlier, everything about It's acquisition. excited the be this continue

market, that own about shapes option rotation. the research underneath consumption why into who announced consumption us category. us that this mainstream OWYN we showed Label has of plant's is this want that it's total the increasingly was from to from about dig growing much Shapes this category, is acquisition, on separated taste did as explains see our PURA closer consumers we that into plant-based pulling That And from a gets the study, rate cleanout did significant. And obviously, add dairy-based study Obviously, checks. addressable the Clean comprehensive in based the they're taste OWYN when gotten a upside. in excited very to which we is that, which double a and pulling What we segment, As is acquisition total said we consumers. And really we when more though, healthy

attracting clear a more and become from consumers. increasingly So grow through in leader plant consumption mainstream

-- you So the results. our we right they're to up say see What and we in why that's now, XX%. will I us the it driving to but. is we're on in saw continue That's core, should what expect to research, focused

very on -- and and should business we that work powerful this very team. going R&D organizations at shakes. on the Quest outside You that, can extend assume to how talented of creates combining very, our We've on a started playbook we're look

that just should playbook some want going And the look yes, shakes. More and and you but beyond assume continue so to grow to we're core how to on. on brand we say, to run Quest come, that's to I'd this thesis, derivative our high it's

Operator

from question the last the line take we gentlemen, Jim and inc. Ladies of from Salera Stephens

James Salera

there. on all a to Appreciate ask detail follow-up OWYN. wanted I

and to of OWYN, there there. upper you you If saw what XXXX, household XXXX? of do kind some you for of can give guys what higher constraints capacity you is for to with can of adoption sense the Is capacity continue velocities, in for bound see just us for especially an light the ships success the a Quest leading

Geoff Tanner

new are short near even benefits mean is I we one are capacity. either expand OWYN. long of help we or was coming yes, there online them of for no bringing Yes. medium significantly into -- network online. in capacities simply capacity constrained, as of lot no issues them a but or industry, the term answer -- have there term this capacity We'll come their no, say And don't

issue capacity at So an all. is not

Shaun Mara

now right for OWYN. that as we working the as we at and for business also Quest it we're for optimize Atkins look And say, and I'd an RTDs it, opportunity, think overall there's network on we

at cost from standpoint, 'XX, an wouldn't that, a looking but we us. hard I a think be meaningful for that and we could saving that synergy in see opportunity are fiscal there's

James Salera

final Great. question. And one then

guys the but left plan balance capital back it Given that down have cash going have there's into sheet expect any given already to I allocation marketing, you on over. detailed levered a you that FY be like thoughts Xx, to sounds 'XX pretty just guys would just some on

on any anything there? or So thoughts buybacks

Shaun Mara

let's take a mean, back. step I

year think last be we strong is from year. this million I fantastic company. should mean, think activities, again of generation year. Cash the $XXX a I operating a cash had I hallmark

We right now. balance have over $XXX million in cash sheet on the

shareholders that look our we to best down, pay at what to the to share is we cash continue M&A. at we way at repurchases, look return So evaluate that look

back to year. look that, at capital into and as application evaluate So and continue really our we continue and fine-tune to opportunities to shares we'll strategy buy we'll the get finalize

Operator

this would our conference Ladies and question-and-answer to the you. Thank session. over comments. gentlemen, management the hand I now closing concludes for

Geoff Tanner

for results to you look forward in follow-up we'll calls joining and our you any today. be January. Thank I'll have, so updating be for you -- us may first quarter on much available

Operator

Company Thank concluded. you now Good for Foods Thank has you. The conference participation. of your Simply

your disconnect lines. now may You Thanks.

The Simply Good Foods Company (SMPL) 24 Oct 242024 Q4 Earnings call transcript