The Simply Good Foods Company (SMPL) Q1 2026 earnings summary

Executive summary

• Q1 net sales were $340.2 million, down 0.3% year-over-year, with Quest up 9.6%–12%, Atkins down 16.5%–19%, and OWYN down 3.3% or up 18% in consumption; Quest and OWYN drove growth while Atkins declined.

• Adjusted EBITDA was $55.6 million, down 20.6% year-over-year, mainly due to margin pressures from inflation, tariffs, and one-time costs.

• Net income was $25.3 million, a 33.7%–34% decrease year-over-year, with diluted EPS at $0.26 versus $0.38 last year.

• The company repurchased 4.98–5.0 million shares in Q1 and expanded its stock repurchase program by $200 million, with $224 million available as of January 2026.

• Distribution expansion, marketing, and innovation contributed to performance, with pricing actions and productivity programs delivering as planned.

Financial highlights

• Gross profit was $109.9 million (32.3% margin), down 15.8% year-over-year, with gross margin declining 590 basis points due to higher input costs and tariffs.

• Adjusted diluted EPS was $0.39, down from $0.49 year-over-year.

• Cash flow from operations was $50.1 million, up from $32 million last year, driven by improved working capital.

• Capital expenditures were $2.1 million in Q1.

• Cash at period end was $194.1 million; term loan balance at $400 million.

Outlook and guidance

• Fiscal 2026 net sales growth expected in the range of -2% to +2% year-over-year, with Quest and OWYN growth offset by Atkins declines.

• Gross margins projected to decline 100–150 basis points; Adjusted EBITDA expected between -4% and +1% year-over-year.

• Q2 expected to be the weakest quarter, with sequential improvement in gross margin and stronger performance in the second half.

• Capital expenditures for the year expected at $30–$40 million, mainly for salty snacks capacity expansion.

• Net interest expense for FY26 expected at $19–21 million; diluted share count around 96 million.