Simply Good Foods (SMPL) Tops Q1 Earnings Expectations, Reaffirms Outlook

The Simply Good Foods Company (Nasdaq: SMPL) has reported its financial results for the first quarter of 2026, showcasing a performance that exceeded expectations in both earnings per share (EPS) and revenue. The company also reaffirmed its full-year outlook, highlighting continued growth prospects in its nutritional snacking segment.

Q1 Earnings Beat Driven by Strength in Quest and OWYN

The Simply Good Foods Company reported its financial results for the first fiscal quarter ending November 29, 2025, revealing a performance that exceeded market expectations. The company’s earnings per share (EPS) came in at $0.39, surpassing the anticipated $0.36. Additionally, Simply Good Foods achieved a revenue of $340.2 million, slightly ahead of the projected $335.93 million. This performance reflects a positive start to the fiscal year, despite a slight 0.3% decrease in net sales compared to the previous year.

Key drivers of this performance include the robust growth of the Quest brand, which saw a 9.6% increase in sales, offsetting declines in the Atkins and OWYN brands. Quest and OWYN exhibited strong retail takeaway growth of 12.0% and 17.8%, respectively, while Atkins experienced a decline of 19.3%, aligning with expectations. The company’s gross profit was $109.9 million, a decline of 15.8% from the previous year, primarily due to elevated input costs and tariff expenses.

Despite these challenges, Simply Good Foods managed to mitigate some of the cost pressures through productivity improvements. Operating expenses decreased by 4.7%, driven by strategic reductions in selling and marketing expenses for Atkins, which were redirected to support the growth of Quest and OWYN. The company’s net income for the quarter was $25.3 million, a decrease of 33.7% from the prior year. However, the adjusted EBITDA of $55.6 million, although down by 20.6% year-over-year, reflects the company’s ability to maintain operational efficiency amid a challenging economic environment.

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Simply Good Foods Maintains 2026 Guidance Despite Cost Pressures

Looking ahead, Simply Good Foods has reaffirmed its fiscal year 2026 outlook, projecting net sales to range between a 2% decrease and a 2% increase year-over-year. The company anticipates gross margins to decline by 100 to 150 basis points, reflecting ongoing input cost pressures. However, management remains optimistic about margin recovery in the second half of the fiscal year, driven by productivity gains and pricing strategies.

Simply Good Foods has outlined plans to increase marketing investments for the Quest and OWYN brands, with a particular focus on enhancing brand awareness and consumer trials for OWYN. This strategic focus is expected to fuel growth and offset challenges faced by the Atkins brand. The company anticipates that the second half of the fiscal year will see stronger performance, both in terms of revenue and profitability, as benefits from productivity and cost improvements materialize.

Additionally, the company has increased its share repurchase authorization by $200 million, reflecting confidence in its long-term growth prospects and commitment to returning value to shareholders. Simply Good Foods expects net interest expenses to range between $19 million and $21 million, with a weighted average diluted share count of approximately 96 million shares. The effective tax rate is projected to remain around 25%, assuming stable economic conditions and consumer behavior.

Overall, Simply Good Foods is well-positioned to navigate the challenges of the current economic landscape, leveraging its strong brand portfolio and strategic initiatives to drive growth and shareholder value. The company’s reaffirmed outlook underscores its confidence in achieving sustained performance improvements and capitalizing on opportunities within the nutritional snacking market.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.