Simply Good Foods Co Posts Sharp Loss in Q3

By Ahmed Jamerson • Thursday, July 09 10:52 • Permanent Link

The Simply Good Foods Company posted a sharp swing to a loss in its fiscal third quarter as sales fell and costs rose.

Net sales declined 6.3% to $357.0 million from $381.0 million a year earlier. The company moved from net income of $41.1 million to a net loss of $52.0 million. Loss per diluted share was $0.58, compared with earnings per diluted share of $0.40 in the prior-year quarter. Adjusted diluted EPS fell to $0.42 from $0.51, and adjusted EBITDA dropped 22.5% to $57.2 million from $73.9 million.

Gross profit decreased 16.2% to $116.1 million, while gross margin narrowed 390 basis points to 32.5%. Selling and marketing expense rose 15.9% to $39.2 million. General and administrative expense fell 1.9% to $40.5 million.

Brand performance diverged in the quarter. Atkins sales fell 24.6%, while Quest rose 1.1% and OWYN increased 3.6%. Retail takeaway for the company overall fell about 6.7%, with Quest up 1.4%, OWYN down 1.3%, and Atkins down 23.9%.

For the first nine months of fiscal 2026, net sales declined 5.4% to $1.0232 billion from the prior-year period. Net loss widened to $186.4 million from net income of $116.0 million. Adjusted EBITDA fell 20.5% to $168.4 million from $211.7 million. Gross profit dropped 17.6% to $329.0 million, and gross margin fell 470 basis points to 32.2%.

Year to date, sales at Atkins fell 22.6%, OWYN declined 5.5%, and Quest grew 3.4%. Retail takeaway for the company fell about 3.8%, with Quest up 5.1% and OWYN up 4.8%, while Atkins declined 22.1%.

Cash at quarter-end was $123.9 million, and term loan principal was $400.0 million. Year-to-date cash flow from operations totaled about $102.2 million, down from $133.1 million a year earlier. The company repurchased about 2.1 million shares for roughly $25 million during the quarter.

For full fiscal 2026, the company now expects net sales of $1.345 billion to $1.355 billion, compared with its prior-year decline of roughly 7% to 6%. It expects adjusted EBITDA of $220 million to $225 million, which would be down 21% to 19% year over year. It also now expects capital expenditures of $20 million to $25 million and a weighted average diluted share count of about 90 million. The market has reacted to these announcements by moving the company's shares 0.55% to a price of $12.91. For the full picture, make sure to review Simply Good Foods Co's 8-K report.

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