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As outlined at the Capital Markets Day in November, ASOS remains focused on efforts to improve the flexibility and speed of the retail model and accelerate the pace of delivery of its international growth strategy. Next phase includes further organisational alignment against key priorities including the establishment of more dedicated teams in support of ASOS and partner brands, further rollout of geographical teams and the establishment of key operating units to drive Face + Body and Sportswear growth plans, ASOS said in a press release.

“ASOS has delivered a robust start to the year, in line with the guidance we set out at full-year results, despite challenging market conditions. This performance reflects the strength of our offer, excellent customer experience and the dedication and hard work of all ASOSers. We continued to make progress against our objectives to improve the flexibility and speed of our retail model and accelerate the pace of delivery of our international growth strategy. Looking ahead, while mindful of the near-term uncertainty relating to the pandemic, our guidance for the full year remains unchanged,” Mat Dunn, COO, said.

UK retailer ASOS is expecting revenue growth for fiscal 2022 to be in the range of 10-15 per cent and an adjusted PBT of £110 million-£140 million. Whilst both demand and returns rate uncertainty related to the Omicron variant are expected to remain in the short term, the company is hoping that the guidance for fiscal 2022 remains unchanged.

“We are also pleased to announce today that we plan to move to the main market of the London Stock Exchange. Our listing on AIM for the past 20 years has been an important part of ASOS’ development, but the time is now right to move to the Main Market as we focus on delivering our medium-term guidance and longer-term growth ambitions,” added Dunn.

Fibre2Fashion News Desk (RR)

Healthy consumer foods and beverage company Simply Good Foods (NASDAQ: SMPL) stock has been resilient during the market sell-off. Unlike new organic healthy food companies, Simply Good is profitable while continuing to ride the healthy lifestyle trends under brands including Atkins, Atkins Endulge, and Quest brands. While supply chain headwinds are expected to have a heavy presence in 2022 into early 2023, the Company still managed to raise its topline estimates for fiscal full-year 2022. The COVID-19 omicron surge causes management to remain cautious about consumer seasonal participation. Prudent investors seeking a profitable and established healthy foods play can watch for opportunistic pullbacks in shares of Simply Good Foods to gain exposure.

Q1 FY 2022 Earnings Release

On Jan. 5, 2022, Simply Good Foods released its fiscal first-quarter 2022 results for the quarter ending November 2021. The Company reported a profit of $0.43 per share beating out consensus analyst estimates for $0.34 per share by $0.09 per share. Revenues rose 21.7% year-over-year (YoY) to $281.3 million beating consensus analyst estimates for $266.28 million. Simply Good Foods CEO Joseph Scalzo commented, “We are pleased with our fiscal first quarter results that were slightly greater than our expectations as our team continued to execute well in a challenging operating environment. The net sales increase was driven by improving consumer mobility and shopper traffic versus the year ago period, solid velocities of our products, increasing household penetration and innovation that continues to resonate with consumers. As expected, the mid-September price increase, favorable mix, and cost savings initiatives, more than offset supply chain cost inflation in the quarter and resulted in gross margin expansion and earnings growth.”

Upside Guidance

Simply Good Foods provided upside guidance for fiscal full-year 2022 revenues between $1.125 billion to $1.145 billion versus $1.09 billion consensus analyst estimates. Full-year fiscal 2022 adjusted EBITDA is expected to increase slightly less than net sales growth rate.

Conference Call Takeaways

CEO Scalzo set the tone, “As we stated in previous conference calls, we expected supply chain costs to be a significant headwind in fiscal 2022, largely offset by our price increase. However, our supply chain costs over the remainder of the year are now projected to be higher than our previous outlook driven mostly by ingredient costs. Therefore, the full year gross margin impact is greater than our prior estimates. We’ll discuss this in greater detail in just a moment. That said, we are confident in our strong top line growth and our ability to manage these higher costs and are increasing our full year net sales and adjusted EBITDA outlook. We are focused on driving sales and earnings growth and competing effectively while navigating a challenging supply chain environment. We’ll continue to execute against our strategies and believe we are well positioned to continue to deliver net sales and earnings growth that we expect will create value for all shareholders while doing the right things over the long term for our business, our customers and our consumers. Simply Good Foods retail takeaway in measured channels increased 18.7% in the quarter. Importantly, as has been the case throughout the pandemic, both our brands have outperformed their respective sub segments of weight management and active nutrition. In the quarter Weight Management segment was up 4.4% And Atkins outperformed this segment with retail takeaway up 7.7% over the same period of time. Total Quest retail takeaway in measured channels in the quarter was up 36.2% and outpaced the Active Nutrition segment growth of 30.3%. And our ecommerce business continues to perform well as POS growth was similar to measured channels, even as we anniversary strong year ago comparables. Atkins Q1 U.S. retail takeaway in measured channels increased 7.7%. The year-over-year increase benefited from improvements in consumer mobility and shopper traffic particularly in the mass channel versus last year’s COVID restrictions as well as continued total buyer growth. In the quarter consumption of bars increased 3.3% and was in line with recent trends. Bar by rate remains below historic levels as there is a high correlation of bar consumption to being at work. Atkins shakes in the quarter retail takeaway was up 12.9% and sequentially improved versus the fourth quarter of last year. Performance was particularly strong in the mass channel up about 20%. Atkins all other product forms continue to show strong growth. These include confections, and cookies as well as the just launched Atkins Protein Chips. In Q1 Atkins all other retail takeaway increased about 9% driven by cookies, which contributed about 2 percentage points to total Atkins brand retail takeaway growth. Confections were up modestly as we lapped last year’s successful dessert bar launch.”

He concluded, “We had another good quarter of growth across all key retail channels. Increased foot traffic in the mass channel and convenience stores were solid. Q1 POS growth in these channels were up about 50% and 40%, respectively. Quest ecommerce takeaway increased about 22% versus last year. As expected, due to strong performance in the year ago period, the growth rate moderated somewhat. Our business at Amazon remained strong, and growth was solid across all major forms. In summary, we’re pleased with our first quarter results that were better than what we expected. That said, retail takeaway growth in the first half of the year will be stronger than the second half of the year as comparables become significantly more challenging. We have a good balance of innovation as well as consumer and customer programming in place that we believe will drive solid retail takeaway and net sales growth throughout the year.”

SMPL Opportunistic Price Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for SMPL stock. The weekly rifle chart recently peaked off the $43.17 Fibonacci (fib) level. Shares collapsed on the earnings release to lean down towards the $36.87 fib before staging a bounce. The weekly rifle chart formed a pup breakout with a rising 5-period moving average (MA) support at $39.94 followed by the 15-period MA support at $38.58. The stochastic is still rising but starting to stall as it attempt to hold above the weekly market structure low (MSL) buy trigger at $38.44. The weekly upper Bollinger Bands (BBs) sit at $43.47. The daily rifle chart downtrend is stalled as the 5-period MA resistance flattens at $38.58. It is worth noting the 50-period MA is attempting to cap the bounce at $39.14. The daily 200-period MA support sits at $36.30. The daily upper BBs sit at $43.63. Prudent investors can watch for opportunistic pullbacks at the $36.87 fib, $35.68 fib, $34.41 fib, $33.52 fib, $31.84 fib, and the $30.57 fib level. Upside trajectories range from the $43.17 fib level up towards the $52.20 fib level.

Brazil’s National Supply Company CONAB estimates cotton ending stocks in the 2020-21 season (in December 2021) at 1.37 million tons, and for the next crop (December 2022), at 1.26 million tons, the smallest since 2017-18 (1.02 million tons). “However, uncertainties about the purchasing power of the population and the price transfer to textile products lead companies to be cautious to purchase big amounts. These players also have their eyes on the pandemic and on the dollar fluctuation against real, mainly in this year of elections in Brazil,” CEPEA said in its latest fortnightly report on the Brazilian cotton market.

Considering the 2021-22 season, the production is expected to increase. Players surveyed by CEPEA say that, with more regular rains this season, sowing activities for the second cotton crop may take place in the desirable period, especially in soybean areas in Mato Grosso, the biggest cotton producing state in Brazil. However, players are concerned with high production costs due to the increase of fertiliser prices.

Higher consumption, smaller production, and lower ending stocks, both in Brazil and in the world, are likely to underpin cotton quotes in early 2022, according to Sao Paulo-based CEPEA. In the off-season too, cotton prices in the Brazilian local market may continue firm and/or moving up as most of the 2020-21 crop has already been traded.

CONAB expects Brazilian cotton production to total 2.7 million tons in the 2021-22 season, 11 per cent up compared to the previous and the third biggest in history. The planted area may increase 12 per cent to 1.542 million hectares, and productivity is likely to total 1,756 kilos per hectare (+1.5 per cent).

Fibre2Fashion News Desk (RKS)