The Simply Good Foods Company (NASDAQ:SMPL) Q3 2023 Earnings Call Transcript

Rob Dickerson: Great. Maybe just kind of like a broader question of the category as you speak to, I guess, trying to increase overall brand awareness and then just ongoing household penetration upside. I think historically, right, there’s been a lot of commentary around the benefits of being kind of the health and beauty aid — health and beauty area in the store, especially on the profitability side, maybe competitive dynamics. Just kind of given your background, Geoff and kind of how you think about, especially your comment on center items with that brand awareness like could there be like kind of this, I don’t want to say a broader rethink of positioning within the store and within channels. But have you thought about almost making it and I’m speaking more specifically to the Atkins brand.

Again, kind of more of a brand, kind of for everyday consumption maybe almost a little bit away from such a specific kind of legacy weight loss product in health and beauty aids. And I just — and I also asked that just kind of what’s in the framework of there’s a lot of competition, right, within the category because the category has done great and you’ve helped the category be great. But there’s always kind of this ongoing kind of mixing of category positioning between sweet and salt snacking indulgence relative to health and protein fortification, etcetera. So very broad question, just kind of curious how you’re thinking about it stepping in.

Geoff Tanner: Yes, thanks for the question. It’s a good one. As I mentioned, I have been on the road and I’ve been speaking with retailers and talking to them about our business but also about the category. And as they look at the category, they see the same runway that we do. Several factors in there but certainly, the low level of household penetration in the 50s versus high 80s for standard store. They also see the twin tailwinds of health and wellness and snacking as driving that and so when I’ve talked to them about how we can build this category together, there’s certainly look at the space as a differentiated opportunity versus the broader standard store. And that’s the opportunity that’s in front of us. To your question on where would our brands play in that category, that’s what we’ll do with them.

But I think it’s a credit to Joe and the team how they have positioned, let’s say, actions as more as a lifestyle brand versus the weight management frame. And you can see that as with the recent commercials and bringing Rob Robert [ph], etcetera. So on that theme, I agree, broadening the cut of this category to be more of a lifestyle destination is an opportunity. Retailers see it and we will be working with them, combining our joint capabilities and building that out over the years to come.

Rob Dickerson: Got it. Great, very interesting. And before I forget, Joe, always a pleasure. Thank you so much for all of your hard work and diligence and looking forward to staying in touch. And Geoff, good to have you back. I guess just one more quick question. You kind of mentioned willingness to operate maybe at a little bit of a higher leverage level. Clearly, right now, leverage is in a great spot. You’re in a very balance sheet is clean. Clearly, you have some kind of work to do out of the gate with respect to kind of changes and improvements on the distribution side with Atkins. But as we think kind of almost more near term, right, kind of with leverage where it is and kind of what I’m hearing within the space, certain assets being potentially dislodge a little bit coming out of COVID.