The Simply Good Foods Company (SMPL) Q2 2026 earnings summary

Executive summary

• Q2 net sales were $326.0 million, down 9.4% year-over-year, with significant declines in Atkins and OWYN, partially offset by modest Quest growth.

• Adjusted EBITDA fell 18.4% to $55.5 million, and net loss was $159.7 million, driven by a $249 million non-cash impairment charge on Atkins and OWYN.

• Performance was impacted by executional challenges, competitive pressures, inflation, and distribution losses, especially in Atkins and OWYN.

• Management is implementing urgent turnaround actions focused on cost reduction, brand investment, and operational discipline.

• Year-to-date net sales were $666.2 million, down 5.0% year-over-year, with Quest up 4.7% and Atkins and OWYN down 21.6% and 10.2%, respectively.

Financial highlights

• Gross profit was $103.0 million, down 20.8% year-over-year; gross margin declined 460 bps to 31.6%.

• Excluding one-time OWYN integration expenses, gross margin was 32.8%, down 350 bps.

• Selling and marketing expenses fell 19.7% due to reduced Atkins marketing; G&A declined 3.2% (12% excluding one-time items).

• Net interest expense was $5.0 million; effective tax rate was 26.8%–27.0%.

• Cash at quarter-end was $107.4 million; net debt to trailing 12-month adjusted EBITDA was ~1.2x.

Outlook and guidance

• FY26 net sales expected at $1.31–$1.35 billion, a 10%–7% decline, with adjusted EBITDA of $217–$225 million, down 22%–19%.

• Q3 net sales guidance: $328–$339 million (down 14%–11%); adjusted EBITDA: $46–$50 million.

• GAAP gross margins expected to decline 300–350 bps for FY26, with Q4 margin expansion anticipated.

• Full-year effective tax rate expected at ~25%; capital expenditures and interest expense unchanged.

• Restructuring activities expected to incur approximately $15 million in costs through fiscal 2027.