The Simply Good Foods Company has reported its fiscal second quarter 2025 financial results, showing significant growth and reaffirming its fiscal year 2025 outlook. In the second quarter of 2025, the company's net sales increased to $359.7 million from $312.2 million in the same period last year. Net income rose to $36.7 million compared to $33.1 million, and adjusted diluted earnings per share (EPS) increased to $0.46 from $0.40.
The company's outlook for fiscal year 2025 includes expectations of an 8.5% to 10.5% increase in net sales and a 4% to 6% increase in adjusted EBITDA. It also anticipates a 2-percentage point headwind to both net sales and adjusted EBITDA growth due to the fifty-third week in fiscal year 2024. The company's president and CEO, Geoff Tanner, expressed satisfaction with the results and emphasized the company's solid performance, new market expansion, and successful product innovation.
The acquisition of Only What You Need, Inc. ("OWYN") contributed significantly to the company's growth. OWYN's net sales contributed $33.8 million to the reported net sales growth in the second quarter, while organic net sales grew by 4.4%, primarily driven by the Quest brand. Total retail takeaway for Simply Good Foods' products increased by around 7% in the second quarter.
The company's gross profit increased by $13.3 million to $130.1 million, representing an 11.4% growth from the year-ago period. Operating expenses also increased, with selling and marketing expenses rising to $35.1 million and general and administrative expenses reaching $36.0 million. The company reported adjusted EBITDA of $68.0 million, a significant increase from $57.8 million in the year-ago period.
In the year-to-date second quarter of fiscal year 2025, net sales reached $700.9 million, up from $620.9 million in the comparable period in 2024. Net income for the year-to-date period was $74.9 million, compared to $68.7 million in the prior year. Adjusted diluted EPS increased to $0.95 from $0.82, and adjusted EBITDA reached $138.1 million, up from $119.8 million in the year-ago period.
The company's balance sheet at the end of the second quarter of fiscal year 2025 showed cash of $103.7 million and an outstanding principal balance on its term loan of $300.0 million. The company repaid $50.0 million of its term loan debt during the quarter, bringing fiscal year-to-date repayments to $100.0 million. Cash flow from operations was approximately $63.3 million versus $94.0 million in the year-ago period.
The company also announced a CFO succession plan, with current CFO Shaun Mara planning to retire effective July 3, 2025, and Christopher J. Bealer being hired as Senior Vice President of Finance. The company reaffirmed its fiscal year 2025 outlook, expecting continued growth driven primarily by volume, with gross margin expected to decline by approximately 200 basis points versus fiscal year 2024.
The market has reacted to these announcements by moving the company's shares 11.8% to a price of $37.09. For more information, read the company's full 8-K submission here.
