Simply Good Foods Earnings: Q3 Tops Management Expectations
Simply Good Foods earnings had adjusted EPS above forecasts while sales, margins and EBITDA fell and the company cut fiscal 2026 outlook, adding scrutiny.
KEY TAKEAWAYS
- Adjusted EPS beat management forecasts while declining to $0.42 from $0.51 year over year.
- Net sales fell to $357 million and gross margin dropped 390 basis points to 32.5%.
- Company cut fiscal 2026 sales and adjusted EBITDA guidance to $1.345-$1.355 billion and $220-$225 million.
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The Simply Good Foods Company (SMPL) reported fiscal third-quarter earnings for the 13 weeks ended May 30, 2026, with adjusted diluted EPS that exceeded management’s expectations despite declines in sales, gross margin, and adjusted EBITDA. The company also lowered its fiscal 2026 outlook.
Sales, Profit, Margins and Brand Performance
Simply Good Foods posted net sales of $357 million in Q3 FY2026, down from $381 million a year earlier. Adjusted EBITDA fell to $57.2 million from $73.9 million, while gross profit declined to $116.1 million, with gross margin dropping 390 basis points to 32.5%. Adjusted diluted EPS was $0.42, below last year’s $0.51 but above management’s forecast. On a GAAP basis, the company recorded a net loss of $52 million, or $0.58 per share, compared with net income of $41.1 million and EPS of $0.40 in the prior-year quarter.
Brand-level results were mixed. Atkins sales fell 24.6% year over year, weighed down by distribution losses and softer retail demand. Quest sales grew 1.1%, and OWYN increased 3.6%, partially offsetting the decline in Atkins. Management attributed the overall weakness primarily to distribution-related challenges and reduced retail takeaway.
Outlook and Liquidity
The company updated its fiscal 2026 guidance, projecting net sales between $1.345 billion and $1.355 billion, a gross-margin decline of about 375 basis points, and adjusted EBITDA of $220 million to $225 million. This outlook assumes current consumption trends persist and includes anticipated distribution losses. The earnings-call transcript summary indicated Q4 sales are expected between $322 million and $332 million.
At quarter-end, Simply Good Foods held $123.9 million in cash, with $400 million in term-loan principal and a trailing-twelve-month net debt to adjusted EBITDA ratio of 1.2x. This liquidity and modest leverage provide some flexibility as the company works to restore distribution and retail momentum amid ongoing operating pressures.
Chief Executive Joe Scalzo said, “Our third quarter results reflect initial steps against the turnaround priorities we outlined last quarter.”
