Simply Good Foods reports mixed first quarter results amid inflation pressures

The Simply Good Foods Company (NASDAQ: SMPL) reported net sales of $340.2 million for the first quarter of fiscal 2026, a slight decrease of 0.3% compared to $341.3 million in the prior year period.

Net income fell to $25.3 million, or $0.26 per diluted share, down from $38.1 million, or $0.38 per diluted share, in the same quarter last year. Adjusted diluted earnings per share declined to $0.39 from $0.49 in the prior year period.

The company's brands showed mixed performance during the quarter. Quest net sales increased 9.6% while Atkins declined 16.5% and OWYN decreased 3.3%. Total company retail takeaway grew approximately 1.8%, driven by Quest's 12.0% growth and OWYN's 17.8% increase, partially offset by Atkins' 19.3% decline.

Gross profit decreased 15.8% to $109.9 million, with gross margin falling 590 basis points to 32.3%. The company attributed the margin compression to elevated input costs, including the first full quarter of tariff expenses, which were only partially offset by productivity gains and mix improvements.

Adjusted EBITDA declined 20.6% to $55.6 million compared to $70.1 million in the prior year quarter.

During the quarter, Simply Good Foods repurchased approximately 5.0 million shares for $100 million. The company's board approved a $200 million increase to its share repurchase program, bringing total authorization to approximately $224 million as of January 6, 2026.

The company also borrowed an additional $150 million and extended its credit facilities by three years in November 2025. At quarter end, Simply Good Foods had cash of $194.1 million and outstanding debt of $400.0 million.

Simply Good Foods reaffirmed its fiscal 2026 outlook, expecting net sales to range between -2% and +2% year-over-year, with gross margins declining 100 to 150 basis points and adjusted EBITDA ranging between -4% and +1% year-over-year.

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