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Simply Good Foods Q2 EPS beat estimates, but sales missed and fell 9.4% year over year.
SMPL sales drop caused by steep declines in Atkins and OWYN, partly offset by slight Quest growth.
SMPL cuts FY26 outlook, sees sales down 7-10% and EBITDA falling 19-22% year over year.
The Simply Good Foods Company (SMPL - Free Report) reported second-quarter fiscal 2026 results, with the top line missing the Zacks Consensus Estimate but the bottom line exceeding the same. However, both metrics declined year over year.
SMPL’s Quarterly Performance: Key Metrics and Insights
Simply Good Foods posted adjusted earnings of 45 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. However, the bottom line declined 2.2% from 46 cents reported in the same quarter last year.
The Simply Good Foods Company Price, Consensus and EPS Surprise
The company reported net sales of $326 million, which missed the Zacks Consensus Estimate of $345 million. Also, the metric decreased 9.4% from $359.7 million posted in the year-ago period. This decline was primarily caused by decreases in Atkins and OWYN sales of 26.6% and 16.8%, respectively, and was only partially offset by modest growth of 0.3% in Quest.
Total Simply Good Foods retail takeaway decreased 6.4%, due to a 2.4% decline in OWYN and 23.4% in Atkins, which was largely in line with expectations for the brand. However, the decline was offset by 2.4% growth in Quest.
Gross profit decreased 20.8% year over year to $103 million. This decrease was primarily due to inflationary pressures, particularly higher cocoa costs, as well as the impact of tariffs. Gross margin declined 460 basis points to 31.6%, reflecting higher input costs and certain one-time effects related to actions taken to address OWYN product quality issues.
Selling and marketing expenses totaled $28.2 million, a decrease of 19.7% compared with the prior year. This reduction was caused by planned spending declines for Atkins, which more than offset increased investment to support growth in Quest and OWYN.
Adjusted EBITDA was $55.5 million, representing a decline of 18.4% compared with the same period last year.
SMPL Stock: Other Updates & Developments
Simply Good Foods exited the quarter with cash of $107.4 million and an outstanding principal balance of $400 million on its term loan.
For the 26 weeks ended Feb. 28, 2026, cash flow from operations totaled $58.2 million, down from $63.3 million in the prior-year period.
In the quarter, the company repurchased approximately 4.6 million shares of its common stock for a total of about $89 million.
Sneak Peek Into SMPL’s Outlook
The company has updated its fiscal-year 2026 outlook and now expects net sales to be between $1.31 billion and $1.35 billion, representing a year-over-year decline of 7% to 10%, in contrast to the prior outlook of a 2% decline to 2% growth.
Gross margin is now projected to decline between 300 basis points and 350 basis points, compared with the previous expectation of a 100-150 basis point decline.
Adjusted EBITDA is now expected to be between $217 million and $225 million, indicating a decline of 19% to 22% year over year, in contrast to the prior outlook of a 4% decline to 1% growth.
For the third quarter of fiscal 2026, the company expects net sales to be between $329 million and $338 million, representing a year-over-year decline of 11% to 14%, and adjusted EBITDA to range from $46 million to $50 million, indicating a decline of 32% to 38% year over year.
This Zacks Rank #4 (Sell) stock has fallen 42.9% in the past three months against the industry’s growth of 8%.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.4% and 20.9%, respectively, from the year-ago figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales indicates growth of 4.4%, from the prior-year reported levels.
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Simply Good Foods Q2 Earnings Beat Estimates, Sales Decline 9.4% Y/Y
Key Takeaways
The Simply Good Foods Company (SMPL - Free Report) reported second-quarter fiscal 2026 results, with the top line missing the Zacks Consensus Estimate but the bottom line exceeding the same. However, both metrics declined year over year.
SMPL’s Quarterly Performance: Key Metrics and Insights
Simply Good Foods posted adjusted earnings of 45 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. However, the bottom line declined 2.2% from 46 cents reported in the same quarter last year.
The Simply Good Foods Company Price, Consensus and EPS Surprise
The Simply Good Foods Company price-consensus-eps-surprise-chart | The Simply Good Foods Company Quote
The company reported net sales of $326 million, which missed the Zacks Consensus Estimate of $345 million. Also, the metric decreased 9.4% from $359.7 million posted in the year-ago period. This decline was primarily caused by decreases in Atkins and OWYN sales of 26.6% and 16.8%, respectively, and was only partially offset by modest growth of 0.3% in Quest.
Total Simply Good Foods retail takeaway decreased 6.4%, due to a 2.4% decline in OWYN and 23.4% in Atkins, which was largely in line with expectations for the brand. However, the decline was offset by 2.4% growth in Quest.
Gross profit decreased 20.8% year over year to $103 million. This decrease was primarily due to inflationary pressures, particularly higher cocoa costs, as well as the impact of tariffs. Gross margin declined 460 basis points to 31.6%, reflecting higher input costs and certain one-time effects related to actions taken to address OWYN product quality issues.
Selling and marketing expenses totaled $28.2 million, a decrease of 19.7% compared with the prior year. This reduction was caused by planned spending declines for Atkins, which more than offset increased investment to support growth in Quest and OWYN.
Adjusted EBITDA was $55.5 million, representing a decline of 18.4% compared with the same period last year.
SMPL Stock: Other Updates & Developments
Simply Good Foods exited the quarter with cash of $107.4 million and an outstanding principal balance of $400 million on its term loan.
For the 26 weeks ended Feb. 28, 2026, cash flow from operations totaled $58.2 million, down from $63.3 million in the prior-year period.
In the quarter, the company repurchased approximately 4.6 million shares of its common stock for a total of about $89 million.
Sneak Peek Into SMPL’s Outlook
The company has updated its fiscal-year 2026 outlook and now expects net sales to be between $1.31 billion and $1.35 billion, representing a year-over-year decline of 7% to 10%, in contrast to the prior outlook of a 2% decline to 2% growth.
Gross margin is now projected to decline between 300 basis points and 350 basis points, compared with the previous expectation of a 100-150 basis point decline.
Adjusted EBITDA is now expected to be between $217 million and $225 million, indicating a decline of 19% to 22% year over year, in contrast to the prior outlook of a 4% decline to 1% growth.
For the third quarter of fiscal 2026, the company expects net sales to be between $329 million and $338 million, representing a year-over-year decline of 11% to 14%, and adjusted EBITDA to range from $46 million to $50 million, indicating a decline of 32% to 38% year over year.
This Zacks Rank #4 (Sell) stock has fallen 42.9% in the past three months against the industry’s growth of 8%.
Image Source: Zacks Investment Research
Stocks to Consider
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.4% and 20.9%, respectively, from the year-ago figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales indicates growth of 4.4%, from the prior-year reported levels.