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Why Real Good Foods' Shares Are Rising Today

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## Real Good Foods’ Financial Results and Future Projections Sending Shares Soaring

Real Good Foods reported a remarkable sales growth of 48% year-on-year, reaching $55.565 million in the third quarter of FY23, surpassing the projected $55.436 million. The surge in sales can be attributed to the expansion of distribution points and an increase in unit sales within existing distribution points. As a result, the company witnessed a significant increase in gross profit, reaching $11.6 million, and an impressive growth in gross margin from 4.7% to 20.9% of net sales compared to the previous year.

However, the reported EPS loss of $(0.50) fell short of the street view of $(0.17). Real Good Foods’ household penetration grew to 8.8% by September 2023, reflecting a positive trend compared to the previous quarter. Nevertheless, the company experienced a surge in total operating expenses to $20.5 million predominantly due to amplified research & development costs and slightly higher distribution costs.

Real Good Foods ended the quarter with $2.0 million in cash and cash equivalents, including $1.9 million of restricted cash, with a total debt of $108.3 million. Despite operational challenges that led to under-shipping demand, Gerard Law, the Chief Executive Officer, expressed optimism regarding the brand’s strength, signaling the growth in household penetration and consumption.

Looking ahead, Real Good Foods expects Q4 net sales in the range of $65 million-$72 million, indicating a substantial year-on-year growth between 83% and 102%. The company also anticipates Q4 adjusted EBITDA of $4 million to $6 million. For FY23, the projected revenue stands at $185 million-$192 million, with a preliminary FY24 guidance for revenue of at least $245 million. In the long term, the company aims for net sales of approximately $500 million.

In response to these promising financial results and future projections, Real Good Foods’ shares surged by 2.96% to $1.74, marking an optimistic note for investors and stakeholders.


*Keywords: Real Good Foods, RGF, financial results, third quarter, revenue growth, gross profit, operating expenses, net sales, adjusted EBITDA, long-term revenue, stock price, investor sentiment*

*Source: [Benzinga](https://www.benzinga.com)*

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