Shares of The Simply Good Foods Company (NASDAQ:SMPL) gained 11.4% on Tuesday after the developer, marketer, and seller of branded nutritional foods and snacks released strong third-quarter 2018 results.
Third-quarter net sales of $107.2 million represented an 11.1% increase compared to the third-quarter 2017 pro forma results, which gives effect to the business combination of Conyers Park Acquisition Corp. and NCP-ATK Holdings, Inc. as if it occurred on Aug. 28, 2016 -- essentially, a better apples-to-apples comparison. Gross profit margin jumped a healthy 270 basis points to reach 47.8% and adjusted EBITDA increased 21.4% to $17.9 million.
"Our strong third quarter financial and marketplace results continue to reflect the effectiveness of the strategic initiatives we outlined earlier this year that focus on marketing investments targeting our broader lifestyle consumers, refreshed packaging, cleaner labels and new products," said President and CEO Joseph Scalzo in a press release.
Investors should expect full-year net sales to end up closer to its year-to-date 8.2% result, which takes nothing away from a strong third quarter. Long-term net sales and adjusted EBITDA growth are expected to move between 4% and 6% higher, with adjusted EBITDA to grow slightly more than net sales.