Second Quarter Summary:(1)
Net sales of $326.0 million versus $359.7 million
Net loss of $159.7 million versus net income of $36.7 million
Loss per diluted share of $1.73 versus earnings per diluted share of $0.36
Adjusted Diluted EPS(2) of $0.45 versus $0.46
Adjusted EBITDA(3) of $55.5 million versus $68.0 million
Updating Fiscal Year 2026(4) Outlook:
Net sales expected to range between $1.31 and $1.35 billion, or -10% to -7% year-over-year
Gross margins expected to decline between 300 and 350 basis points year-over-year
Adjusted EBITDA expected to range between $217 and $225 million, or -22% to -19% year-over-year
"I want to make it quite clear that we are not satisfied with our current performance," said Joe Scalzo, President and Chief Executive Officer of Simply Good Foods. "Our recent results have not met our expectations, and we have taken immediate and fundamental actions to turnaround both our financial performance and our in-market performance."
Scalzo continued, "The long-term fundamentals of our category, our portfolio and our company capabilities are compelling, but in the near-term our organization must focus on three priorities, which are strengthening our business model economics by improving our cost structure and margins, ensuring consistency in our strategic choices driving organizational clarity and efficiency, and rebuilding brand investment behind superior marketing execution to drive household penetration."
Second Quarter 2026 Results
Net sales of $326.0 million decreased 9.4% versus the comparable year ago period, driven by declines for Atkins and OWYN of 26.6% and 16.8%, respectively, and only partially offset by Quest growth of 0.3%. The Company's net sales performance was largely driven by poor retail takeaway relative to what we experienced in the first quarter. Quarter over quarter Quest consumption was affected by slower base velocity in chips and bars. OWYN consumption declined year over year due to lapping the heavy promotional period in the prior year and poor base velocities, including on newly expanded distribution.
Total Simply Good Foods retail takeaway(5) decreased about 6.4% driven by a growth for Quest of 2.4% and a decline for OWYN of 2.4%, while Atkins declined 23.4%, which was largely as expected for the brand.
Gross profit of $103.0 million decreased 20.8% versus the comparable year ago period, driven by inflationary costs, most notably cocoa, and tariffs. Gross margin was 31.6%, a decline of 460 basis points versus prior year, largely reflecting higher input costs and some one-time effects from actions taken to mitigate OWYN product quality issues. Excluding $3.9 million of one-time OWYN integration expenses in the current year period and a $0.4 million non-cash inventory purchase accounting step-up adjustment expense related to the OWYN acquisition that occurred in the comparable prior year period, gross margin was 32.8%, a 350 basis point decline versus the comparable year ago period.
Selling and marketing expenses of $28.2 million decreased 19.7% versus the comparable year ago period driven by planned declines for Atkins, which more than offset increases to support growth for Quest and OWYN.
General and administrative ("G&A") expenses of $34.9 million decreased 3.2% versus the comparable year ago period. Excluding for the current period $4.5 million in restructuring costs, integration expenses of $0.8 million, and term loan transaction fees of $0.2 million and for the prior year period integration expenses of $2.0 million and term loan transaction fees of $0.7 million, G&A declined 12.0% to $29.3 million.
As part of the Company's process to evaluate the carrying value of our brands, we recognized an aggregate $249.0 million non-cash, impairment charge related to the Atkins brand and OWYN brand intangible assets. The impairment is largely the result of a challenging fiscal year 2026 and updated projections of future revenue.
Net interest expense of $5.0 million reflected a 12.1% decrease versus the comparable year ago period due to lower interest rates.
The effective tax rate was 26.8%.
Net loss of $159.7 million compared to net income of $36.7 million for the comparable year ago period.
Adjusted EBITDA of $55.5 million decreased 18.4% versus the comparable year ago period.
Reported loss per diluted share was $1.73 versus reported earnings per diluted share of $0.36 in the comparable year ago period.
Adjusted diluted EPS was $0.45 versus $0.46 in the comparable year ago period.
Weighted average diluted shares outstanding of 92.3 million declined modestly versus the comparable year ago period, reflecting share repurchases.
Year-to-Date Second Quarter Fiscal Year 2026 Highlights vs. Year-to-date Second Quarter 2025
Net sales of $666.2 million decreased 5.0% versus the comparable year ago period, driven by declines for Atkins and OWYN of 21.6% and 10.2%, respectively, and offset by Quest growth of 4.7%. Atkins declines were largely as expected. OWYN's net sales decline was the result of a product quality issue, lapping the heavy promotional period in the prior year and poor base velocities, including on newly expanded distribution.
Total Simply Good Foods retail takeaway decreased about 2.6% driven by growth for Quest and OWYN of 6.9% and 6.3%, respectively, while Atkins declined 21.3%, largely as expected.
Gross profit of $212.9 million decreased 18.3% versus the comparable year ago period, driven by elevated input inflation, including the higher tariff expenses. Productivity was a modest offset. Gross margin was 32.0%, a 520 basis point decline versus the comparable year ago period, driven by elevated input costs which were only partially offset by productivity and mix. Excluding $6.5 million of one-time OWYN integration expenses in the current year period and a $1.4 million non-cash inventory purchase accounting step-up adjustment expense related to the OWYN acquisition that occurred in the comparable prior year period, gross margin was 32.9%, a 450 basis point decline versus the comparable year ago period.
Selling and marketing expenses of $57.8 million decreased 15.0% versus the comparable year ago period driven by planned marketing declines for Atkins, which more than offset increases to support growth for Quest and OWYN.
G&A expenses of $72.9 million decreased 1.6% versus the comparable year ago period. Excluding in the current year period restructuring costs of $4.5 million, integration expenses of $4.1 million, and term loan transaction fees of $3.0 million and in the prior year period integration expenses of $6.9 million and term loan transaction fees of $0.7 million, G&A declined 7.9% to $61.2 million.
Net interest expense of $8.7 million reflected a 31.3% decrease versus the comparable year ago period due to lower interest rates.
As part of the Company's process to evaluate the carrying value of our brands, we recognized an aggregate $249.0 million non-cash, impairment charge related to the Atkins brand and OWYN brand intangible assets. The impairment is largely the result of a challenging fiscal year 2026 and updated projections of future revenue.
The effective tax rate was 27.0%.
Net loss of $134.4 million compared to net income of $74.9 million versus the comparable year ago period.
Adjusted EBITDA of $111.1 million decreased 19.5% versus the comparable year ago period.
Reported loss per diluted share was $1.41 versus reported earnings per share of $0.74 in the comparable year ago period.
Adjusted Diluted EPS was $0.84 versus $0.95 in the comparable year ago period.
Weighted average diluted shares outstanding of 95.5 million declined modestly versus the comparable year ago period, reflecting share repurchases.
Balance Sheet and Cash Flow
At the end of the second quarter of fiscal year 2026, the Company had cash of $107.4 million and an outstanding principal balance on its term loan of $400.0 million, bringing the Company's quarter-end trailing twelve-month Net Debt to Adjusted EBITDA ratio to 1.2x(6). Higher cash and debt balances reflect the Company's strategic decision to borrow an additional $150.0 million concurrently with a three-year extension of the Company's existing credit facilities, which closed in November 2025. Year-to-date cash flow from operations was about $58.2 million versus $63.3 million in the comparable year ago period. Capital expenditures were approximately $7.6 million.
During the quarter, the Company repurchased approximately 4.6 million shares of its common stock for approximately $89 million.
Fiscal Year 2026 Outlook
The Company is updating its previously provided outlook for fiscal year 2026:
Net Sales expected to range between $1.31 to $1.35 billion, or -10% to -7% year-over-year
Gross Margins expected to decline between 300 and 350 basis points year-over-year
Adjusted EBITDA expected to range between $217 to $225 million, or -22% to -19% year-over-year
The company continues to expect net interest expense in the range of $19 to $21 million and an effective tax rate of approximately 25%. Finally, given the impact of year-to-date share repurchases, the company now expects a weighted average diluted share count of approximately 92 million shares.
For the third quarter of fiscal year 2026:
The company expects Net Sales to range between $329 to $338 million, or -14% to -11% year-over-year
Adjusted EBITDA expected to range from $46 to $50 million, or -38% to -32% year-over-year
The foregoing outlook assumes current economic conditions, consumer purchasing behavior and prevailing tariff rates remain generally consistent across the Company's fiscal year.
________________________________(1) All comparisons for the second quarter ended February 28, 2026, versus the comparable year-ago period ended March 1, 2025.(2) Adjusted Diluted Earnings Per Share is a non-GAAP financial measure. The Company excludes restructuring costs, acquisition-related costs, such as Business Transaction costs, integration expense and depreciation and amortization expense in calculating Adjusted Diluted Earnings Per Share. Please refer to "Reconciliation of Adjusted Diluted Earnings Per Share" in this press release for an explanation and reconciliation of this non-GAAP financial measure.(3) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP financial measure. Please refer to the "Reconciliation of EBITDA and Adjusted EBITDA" in this press release for an explanation and reconciliation of this non-GAAP financial measure.(4) The Company does not provide a forward-looking reconciliation of expected Fiscal Year 2026 Adjusted EBITDA to Net Income, the most directly comparable GAAP financial measure, because we are unable to provide such a reconciliation without unreasonable effort due to the unavailability of reliable estimates for certain components of consolidated net income and the respective reconciliations, and the inherent difficulty of predicting what the changes in these components will be throughout the fiscal year. As these items may vary greatly between periods, we are unable to address the probable significance of the unavailable information, which could significantly affect our future financial results.(5) Combined Quest, Atkins, and OWYN Circana MULO++C and Company unmeasured channel estimate for the 13-weeks ending March 1, 2026, vs. the comparable 13-week year ago period.(6) Net Debt to Adjusted EBITDA is a non-GAAP financial measure which Simply Good Foods defines as the total debt outstanding under our credit agreement with Barclays Bank PLC and other parties ("Credit Agreement"), reduced by cash and cash equivalents, and divided by the Company's trailing twelve month Adjusted EBITDA, as previously defined. The Company does not provide a forward-looking reconciliation of Net Debt to Adjusted EBITDA to Net Debt to Consolidated Net Income, the most directly comparable GAAP financial measures, expected for Fiscal Year 2026, because we are unable to provide such a reconciliation without unreasonable effort due to the unavailability of reliable estimates for certain components of consolidated net income and the respective reconciliations, and the inherent difficulty of predicting what the changes in these components will be throughout the fiscal year. As these items may vary greatly between periods, we are unable to address the probable significance of the unavailable information, which could significantly affect our future financial results.
Conference Call and Webcast InformationThe Company will host a conference call with members of the executive management team to discuss these results today, Thursday, April 9, 2026, at 6:30 a.m. Mountain time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial 877-407-0792 from the U.S. or 201-689-8263 from international locations. A live webcast will be available via the "Investors" section of the Company's website at www.thesimplygoodfoodscompany.com. A telephone replay will be available approximately two hours after the call concludes and will remain accessible through April 16, 2026, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13758838.
About The Simply Good Foods CompanyThe Simply Good Foods Company (NASDAQ:SMPL), headquartered in Denver, Colorado, is a consumer packaged food and beverage company with ambitious goals to raise the bar on what food can be with trusted brands and innovative nutritious snacking products. Within our portfolio of trusted brands (Quest™, Atkins™, and OWYN™), we offer a wide variety of nutritional snacks and beverages, including high protein chips, bars, ready-to-drink (RTD) shakes, and powders, and low sugar, low carb sweets and baked goods. We are a leader of the nutritious snacking movement, poised to expand our healthy lifestyle platform through innovation-driven organic growth and external investment opportunities. To learn more, visit www.thesimplygoodfoodscompany.com.
Investor ContactMatt SilerVice President, Investor Relations and TreasuryThe Simply Good Foods Company[email protected]
Forward Looking Statements
Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as "will", "expect", "intends" or other similar words, phrases or expressions. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We caution you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These risks and uncertainties relate to, among other things, our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints, inflationary pressure and tariffs on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges due to tariffs or other challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical conditions affecting us and the industry in which we operate, our ability to maintain adequate product inventory levels to timely supply customer orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the loss of one or more members of our management team, potential for increased costs, the harm to our business resulting from unauthorized access of the information technology systems we use in our business, and other risks and uncertainties indicated in the Company's Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company's expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's assessments as of any date subsequent to the date of this communication.
The Simply Good Foods Company and SubsidiariesConsolidated Balance Sheets (Unaudited, dollars in thousands, except share and per share data)
February 28, 2026
August 30, 2025
Assets
Current assets:
Cash
$
107,444
$
98,468
Accounts receivable, net
123,517
164,978
Inventories
189,780
167,217
Prepaid expenses
5,310
7,209
Other current assets
13,292
15,812
Total current assets
439,343
453,684
Long-term assets:
Property and equipment, net
42,694
39,738
Intangible assets, net
1,004,763
1,261,603
Goodwill
589,974
589,974
Other long-term assets
48,930
51,046
Total assets
$
2,125,704
$
2,396,045
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
66,518
$
78,298
Accrued interest
63
44
Accrued expenses and other current liabilities
20,297
46,219
Total current liabilities
86,878
124,561
Long-term liabilities:
Long-term debt, less current maturities
396,866
249,066
Deferred income taxes
106,629
166,091
Other long-term liabilities
45,506
49,494
Total liabilities
635,879
589,212
See commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued
,
,
Common stock, $0.01 par value, 600,000,000 shares authorized, 104,033,175 and 103,688,071 shares issued at February 28, 2026, and August 30, 2025, respectively
1,040
1,037
Treasury stock, 13,548,075 shares and 3,957,571 shares at cost at February 28, 2026, and August 30, 2025, respectively
(319,397
)
(129,337
)
Additional paid-in-capital
1,353,320
1,346,687
Retained earnings
456,450
590,879
Accumulated other comprehensive loss
(1,588
)
(2,433
)
Total stockholders' equity
1,489,825
1,806,833
Total liabilities and stockholders' equity
$
2,125,704
$
2,396,045
The Simply Good Foods Company and SubsidiariesConsolidated Statements of Income and Comprehensive Income(Unaudited, dollars in thousands, except share and per share data)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Net sales
$
326,013
$
359,655
$
666,211
$
700,923
Cost of goods sold
222,980
229,518
453,278
440,300
Gross profit
103,033
130,137
212,933
260,623
Operating expenses:
Selling and marketing
28,167
35,078
57,844
68,072
General and administrative
34,875
36,013
