Feeling saucy: Sovos rides Rao’s success in first quarter
LOUISVILLE — Sales of Rao’s pasta sauce “exceeded expectations” for food-brands umbrella company Sovos Brands Inc. (Nasdaq: SOVO) in the first quarter, resulting in higher year-over-year earnings and the raising of the company’s full-year revenue expectations.
The company posted a net income of $7.8 million on sales of $252.8 million in the first quarter of 2023, up from $4.1 million in earnings on $209.9 million in sales for the same period last year.
“Rao’s net sales of $189.2 million exceeded expectations, increasing 37.7% year-over-year,” the company said, while the sauce brand “achieved number one dollar share in the food channel in the first quarter for the first time.”
Sovos also controls Noosa Yoghurt and Michael Angelo’s frozen entrées.
“Sovos Brands delivered another exceptional quarter, with 27% volume-led organic net sales growth and 30% adjusted EBITDA growth,” Sovos CEO Todd Lachman said in a prepared statement. “We are updating our guidance to reflect the continued strong momentum we are seeing in the Rao’s megabrand, which meaningfully outperformed our expectations in the first quarter while achieving the largest quarterly household penetration gain in three years.”
As a result of the strong first quarter, Sovos is raising its 2023 guidance for net sales from $935 million to $955 million and adjusted EBITDA from $136 million to $141 million.
Sovo’s stock price finished trading Thursday at $19.20, down 4.8% on the day.