The Simply Good Foods Company (NASDAQ:SMPL) Q2 2020 Earnings Conference Call - Final Transcript
Apr 06, 2020 • 08:30 am ET
Thank you. [Operator Instructions] Our first question from Chris Growe with Stifel. Please proceed with your question.
Hi, good morning.
Joseph E. Scalzo
Good morning. Good morning, Chris.
Good morning. Glad to hear you guys are healthy and hope it stays that way. I just thought I would ask you first of all, as we think about -- this very loyal consumer base you have -- just wanted to get a sense from you, Joe, if you can speak to it. I know it's very early, but how those consumers react in this environment? And then, I'm just curious how you get a sense of that? Is it through e-commerce trends? Sounds like those were strong through March. I'd say that's probably ticking up a bit. You've seen more activity through your website, as their panel data; just to get a sense of how these consumers are reacting now, if you have any sense of that and then how you're going to track that?
Joseph E. Scalzo
Yeah, Chris. Good question. Again, very early, early stages of this and I think right now the big driver of this has been shopping behavior influence more than its consumption behavior input. So we have a pretty good view of what's going on from a shopping standpoint. And as we said in our prepared comment that March was really volatile. Through the early portion of March up to the weekend of the 20, 21st, we saw a significant spike in foot traffic and a significant uptick in our business in both our business as well as the category. The weekend of the 20th and 21st appeared to be a inflection point in people's shopping behavior, a dramatic fall off, double-digit fall off that has remained through -- that remained through the end of the month in people's shopping patterns and going into stores. We saw significant channel shifting. So e-commerce, online, pickup and delivery all accelerated and then brick and mortar saw a significant fall off that's kind of remained till -- until now.
So, most of it right now, I'd say Chris is shopping behavior driven more than its consumption-driven and right now we don't have a really good read on how the confinement is influencing how people consume the product. I can give you my anecdotal experience that your home, the pantry's pretty close and I'm snacking more frequently. So I think from a snacking behavior our category will do well once we get over some of the shopping behavior issues. I think obviously the on-the-go aspect of this category is going to be a negative drag for us offset somewhat by the snacking behavior increases. But really early innings at this point, we don't know a whole lot about consumption behavior and our view of how we are thinking about guidance had much to do with uncertainty around shopping behavior and the decisions people are making when they go into store.
And presumably in any given period there are volatile weeks and this is obviously