The Simply Good Foods Company (SMPL) Q2 2025 earnings summary

Executive summary

• Q2 FY25 net sales rose 15.2% year-over-year to $359.7 million, driven by Quest and OWYN growth, with OWYN contributing $33.8 million and organic growth at 4.4%; Atkins declined 10%-11.5%.

• Quest and OWYN now represent about 70% of net sales, with Quest up 13%-17.5% and OWYN retail takeaway up 52%.

• Adjusted EBITDA increased 17.6% to $68 million; net income grew 10.9% to $36.7 million.

• Gross margin declined 120 basis points to 36.2% due to OWYN integration and inventory step-up.

• The $281.9 million OWYN acquisition was completed in June 2024, expanding the plant-based portfolio.

Financial highlights

• Q2 net sales: $359.7 million, up 15.2% year-over-year; H1 net sales: $700.9 million, up 12.9%.

• Q2 gross profit: $130.1 million (36.2% margin), up 11.4%; H1 gross profit: $260.6 million (37.2% margin), up 12.3%.

• Q2 Adjusted EBITDA: $68.0 million (18.9% margin), up 17.6%; H1 Adjusted EBITDA: $138.1 million (19.7% margin), up 15.2%.

• Q2 net income: $36.7 million, up 10.9%; H1 net income: $74.9 million, up 9.0%.

• Cash at quarter-end was $103.7 million; term loan balance: $300 million after $100 million repaid year-to-date.

Outlook and guidance

• FY25 net sales expected to grow 8.5%-10.5%, with OWYN contributing $140-$150 million.

• Adjusted EBITDA projected to rise 4%-6%; gross margin to decline ~200 bps due to inflation and tariffs.

• Net leverage expected to fall to 0.5x by year-end, with nearly all OWYN acquisition debt repaid.

• Guidance assumes stable economic conditions and consumer behavior; 53rd week in FY24 is a 2-point headwind to FY25 growth.

• Management does not expect tariffs or supply chain challenges to materially impact FY25 results.