Simply Good Foods Co Aktienkurs
Vergleich mit Peer Group
📊 Peer Group
📈 Was ist das?
Die Peer Group sind die Unternehmen mit dem ähnlichsten Geschäftsmodell. Sie dienen als Vergleichsmaßstab, um eine Aktie einzuordnen.
🧮 Wie wird sie ausgewählt?
Nach Ähnlichkeit des Geschäftsmodells, also Unternehmen aus derselben Branche, mit vergleichbaren Produkten und einer ähnlichen Kundengruppe. Nur so vergleichst du Äpfel mit Äpfeln.
🏛️ Wofür ist sie wichtig?
Ob eine Aktie günstig oder teuer ist, lässt sich am ehesten im Vergleich beurteilen. Ein KGV von 18 oder ein EV/FCF von 20 wirkt je nach Maßstab günstig oder teuer. Die Peer Group liefert dabei den treffsichersten Maßstab: Unternehmen mit ähnlichem Geschäftsmodell, die denselben Bedingungen unterliegen.
🎯 Was bedeutet das für Anleger?
Liegt eine Kennzahl unter dem Peer-Durchschnitt, ist die Aktie relativ günstiger bewertet, über dem Durchschnitt entsprechend teurer. Ein Abschlag zur Peer Group kann eine Chance sein, aber auch einen Grund haben (zum Beispiel geringeres Wachstum). Der Vergleich ist ein Startpunkt, kein Urteil.
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📘 Marktkapitalisierung
📈 Was ist das?
Die Marktkapitalisierung zeigt, wie viel ein Unternehmen laut Börse aktuell wert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft Unternehmen in Größenklassen (Large, Mid, Small Cap) einzuordnen und gibt Hinweise auf Marktmacht und Stabilität.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Große Unternehmen gelten als stabiler, zahlen oft Dividenden, wachsen aber langsamer.
- Kleine Firmen können stärker wachsen, sind aber schwankungsanfälliger.
- Die Marktkapitalisierung ist ein guter Indikator für Unternehmensgröße, aber kein Maß für Unter- oder Überbewertung.
📘 Enterprise Value (Unternehmenswert)
📈 Was ist das?
Der Enterprise Value (EV) zeigt, was ein Unternehmen tatsächlich kostet, wenn man es komplett übernehmen würde – inklusive Schulden und abzüglich Cash.
🧮 Wie wird es berechnet?
(= Marktkapitalisierung + Nettoverschuldung)
🏛️ Wofür ist es wichtig?
Der EV ist eine realistischere Bewertungsbasis als die Marktkapitalisierung, da er die Kapitalstruktur berücksichtigt. Er ist Grundlage für Kennzahlen wie EV/FCF oder EV/Sales.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Der Enterprise Value zeigt, was ein Unternehmen tatsächlich wert ist – unabhängig davon, wie es finanziert ist.
- Er ist besonders wichtig für professionelle Investoren, da er eine objektivere Grundlage für Bewertungsvergleiche bietet als die Marktkapitalisierung allein.
- Ein Unternehmen mit hoher Verschuldung erscheint im EV teurer, eines mit viel Cash günstiger – auch wenn sie an der Börse gleich viel wert sind.
📘 Nettoverschuldung
📈 Was ist das?
Die Nettoverschuldung zeigt, wie viele Schulden nach Abzug des verfügbaren Cashs tatsächlich verbleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie zeigt, wie stark ein Unternehmen von Fremdkapital abhängig ist – und wie gut es in der Lage ist, seine Schulden kurzfristig zu bedienen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige oder negative Nettoverschuldung bedeutet hohe finanzielle Stabilität.
- Unternehmen mit viel Cash und geringer Verschuldung sind besser gerüstet für Krisen.
- Eine hohe Nettoverschuldung erhöht das Risiko – besonders bei steigenden Zinsen oder konjunkturellen Schwächen.
📘 Cash
📈 Was ist das?
Der Cashbestand zeigt, wie viele liquide Mittel einem Unternehmen sofort zur Verfügung stehen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Er gibt Auskunft über die finanzielle Flexibilität: Ein hoher Cashbestand ermöglicht Investitionen, Rückkäufe oder Krisenresistenz.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Cashbestand zeigt finanzielle Stärke und Handlungsspielraum.
- Cash kann für Investitionen, Schuldentilgung oder Aktienrückkäufe genutzt werden.
- Allerdings: Zu viel ungenutztes Kapital kann auch auf mangelnde Investitionsideen hinweisen.
📘 Anzahl ausstehender Aktien
📈 Was ist das?
Die Anzahl ausstehender Aktien gibt an, wie viele Aktien eines Unternehmens aktuell im Umlauf sind und von Investoren gehalten werden.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die Grundlage für viele Kennzahlen wie Gewinn je Aktie (EPS), Marktkapitalisierung oder KGV.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Je weniger Aktien im Umlauf sind, desto höher fällt z. B. der Gewinn je Aktie aus – wichtig für Bewertung und Dividendenrendite.
- Aktienrückkäufe verringern die Anzahl ausstehender Aktien – und steigern den Wert je Aktie.
- Kapitalerhöhungen haben den gegenteiligen Effekt: mehr Aktien → Verwässerung der bestehenden Anteile.
📘 Kurs-Gewinn-Verhältnis (KGV)
📈 Was ist das?
Das KGV zeigt, wie oft der Gewinn pro Aktie im aktuellen Aktienkurs enthalten ist – also wie „teuer“ eine Aktie im Verhältnis zum Gewinn ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KGV gehört zu den bekanntesten Bewertungskennzahlen. Es hilft Anlegern einzuschätzen, ob eine Aktie im Vergleich zu ihrem Gewinn eher günstig oder teuer erscheint.
🧮 Berechnung
📊 KGV (TTM) = bezogen auf den Gewinn der letzten 12 Monate (Trailing Twelve Months):🎯 Was bedeutet das für Anleger?
- Ein niedriges KGV kann auf eine günstige Bewertung hindeuten – oder auf Probleme im Geschäftsmodell.
- Ein hohes KGV kann Wachstumserwartungen widerspiegeln – oder eine überbewertete Aktie.
📘 Kurs-Umsatz-Verhältnis (KUV)
📈 Was ist das?
Das KUV zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen – unabhängig vom Gewinn.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KUV ist besonders bei wachstumsstarken oder noch nicht profitablen Unternehmen hilfreich. Es zeigt, wie hoch der Umsatz an der Börse bewertet wird.
🧮 Berechnung
Marktkapitalisierung = 849,22 Mio. $ | Umsatz (TTM) = 1,39 Mrd. $
Marktkapitalisierung = 849,22 Mio. $ | Umsatz erwartet = 1,38 Mrd. $
🎯 Was bedeutet das für Anleger?
- Ein niedriges KUV kann auf Unterbewertung hindeuten – oder auf schwache Margen.
- Ein hohes KUV kann hohe Erwartungen widerspiegeln – oder übermäßigen Optimismus.
- Besonders sinnvoll bei Wachstumsunternehmen, bei denen der Gewinn oder Free Cashflow (noch) keine Aussagekraft hat.
📘 Unternehmenswert zu Umsatz (EV/Sales)
📈 Was ist das?
EV/Sales zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen, wenn man auch Schulden und Cash berücksichtigt – es ist eine kapitalstrukturbereinigte Version des KUV.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl eignet sich besonders für den Vergleich von Unternehmen mit unterschiedlicher Verschuldung – sie zeigt, wie teuer ein Unternehmen tatsächlich im Verhältnis zum Umsatz ist.
🧮 Berechnung
Enterprise Value = 1,12 Mrd. $ | Umsatz (TTM) = 1,39 Mrd. $
Enterprise Value = 1,12 Mrd. $ | Umsatz erwartet = 1,38 Mrd. $
🎯 Was bedeutet das für Anleger?
- EV/Sales ist neutral gegenüber der Kapitalstruktur und eignet sich gut für Unternehmensvergleiche.
- Ein niedriges Verhältnis kann auf eine günstig bewertete Aktie hindeuten – ein hohes Verhältnis auf hohe Erwartungen oder Überbewertung.
- Besonders nützlich bei wachstumsstarken, noch nicht profitablen Firmen.
📘 Unternehmenswert zu Free Cashflow (EV/FCF)
📈 Was ist das?
EV/FCF zeigt, wie viele Jahre es dauern würde, bis ein Unternehmen seinen Unternehmenswert durch freien Cashflow „zurückverdient”.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Unternehmen auf Basis ihrer tatsächlichen Cash-Erträge zu bewerten – unabhängig von Bilanzierungsregeln oder buchhalterischem Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriges EV/FCF deutet auf eine günstige Bewertung bei starker Cashgenerierung hin.
- Ein hohes EV/FCF kann entweder auf Optimismus oder auf temporär schwachen Cashflow hindeuten.
- Besonders hilfreich bei reifen, profitablen Unternehmen mit stabilen Cashflows.
📘 Kurs-Buchwert-Verhältnis (KBV)
📈 Was ist das?
Das KBV zeigt, wie hoch der Marktwert eines Unternehmens im Verhältnis zu seinem bilanziellen Eigenkapital ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KBV ist besonders bei Substanzwerten (z. B. Banken, Industrie) relevant. Es hilft Anlegern zu erkennen, ob ein Unternehmen unter oder über seinem buchhalterischen Vermögen bewertet ist.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein KBV unter 1 kann auf Unterbewertung oder schwache Rentabilität hindeuten.
- Ein KBV über 1 zeigt, dass der Markt dem Unternehmen Mehrwert über den Buchwert hinaus zuschreibt (z. B. Marken, Patente, Wachstum).
- Das KBV eignet sich besonders gut für Unternehmen mit stabilen, materiellen Vermögenswerten.
📘 Eigenkapitalquote
📈 Was ist das?
Die Eigenkapitalquote zeigt, wie hoch der Anteil des Eigenkapitals an der Bilanzsumme eines Unternehmens ist – also wie stark es sich aus eigenen Mitteln finanziert.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Eine hohe Eigenkapitalquote steht für finanzielle Stabilität, Krisenfestigkeit und gute Bonität. Sie ist besonders relevant bei der Beurteilung der Verschuldung.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalquote signalisiert finanzielle Stabilität – besonders in Krisenzeiten.
- Ein niedriger Wert kann auf ein höheres Risiko oder eine aggressive Verschuldung hinweisen.
- Wichtig: Die Eigenkapitalquote sollte immer gemeinsam mit der Eigenkapitalrendite betrachtet werden. Nur so lässt sich beurteilen, ob ein Unternehmen nicht nur solide, sondern auch effizient wirtschaftet.
📘 Eigenkapitalrendite (ROE)
📈 Was ist das?
Die Eigenkapitalrendite zeigt, wie effizient ein Unternehmen mit dem Kapital seiner Aktionäre arbeitet – also wie viel Gewinn es pro Euro Eigenkapital erwirtschaftet.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Eigenkapitalrendite ist eine zentrale Rentabilitätskennzahl. Sie hilft Anlegern zu erkennen, ob das Unternehmen eine attraktive Verzinsung auf das eingesetzte Eigenkapital erwirtschaftet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalrendite spricht für ein starkes, effizientes Geschäftsmodell.
- Besonders interessant ist sie bei kapitalintensiven Firmen oder solchen mit hoher Eigenkapitalquote.
- Wichtig: Ein sehr hoher ROE kann auch auf hohe Schulden hinweisen – daher sollte sie immer im Kontext mit der Eigenkapitalquote betrachtet werden.
📘 Return on Capital Employed (ROCE)
📈 Was ist das?
ROCE misst die Gesamtrentabilität eines Unternehmens – also wie effizient es das eingesetzte Kapital (Eigen- und Fremdkapital) zur Gewinnerzielung nutzt.
🧮 Wie wird es berechnet?
Das eingesetzte Kapital ist das gesamte betriebsnotwendige Kapital, unabhängig von der Finanzierungsquelle.
🏛️ Wofür ist es wichtig?
ROCE eignet sich besonders gut für den Vergleich unterschiedlich finanzierter Unternehmen. Es zeigt, wie effektiv ein Unternehmen Kapital investiert – unabhängig von der Kapitalstruktur.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROCE zeigt, dass ein Unternehmen sein Kapital effizient einsetzt – unabhängig davon, ob es durch Eigen- oder Fremdkapital finanziert ist.
- Je höher der ROCE im Vergleich zu ähnlichen Unternehmen, desto mehr Wert schafft das Unternehmen mit seinem investierten Kapital.
- Besonders wichtig ist der ROCE bei Firmen mit hohen Investitionen – z. B. in Industrie, Energie oder Infrastruktur.
📘 Return on Invested Capital (ROIC)
📈 Was ist das?
ROIC zeigt, wie effizient ein Unternehmen das Kapital investiert, das langfristig im operativen Geschäft gebunden ist – unabhängig davon, ob es aus Eigen- oder Fremdkapital stammt.
🧮 Wie wird es berechnet?
- NOPAT = „Net Operating Profit After Taxes“
- Investiertes Kapital = operatives Vermögen abzüglich nicht-verzinster Schulden
🏛️ Wofür ist es wichtig?
ROIC ist eine der präzisesten Kennzahlen zur Bewertung der Kapitalrendite – besonders im Vergleich zur Eigenkapitalrendite, weil es Verzerrungen durch Schulden vermeidet. Er zeigt, ob ein Unternehmen Mehrwert für alle Kapitalgeber schafft.
🎯 Was bedeutet das für Anleger?
- Ein hoher ROIC zeigt, wie gut ein Unternehmen mit dem tatsächlich investierten (betriebsnotwendigen) Kapital wirtschaftet.
- Im Unterschied zu ROCE wird nur Kapital betrachtet, das wirklich zur Finanzierung operativer Aktivitäten dient – und verzinst werden muss.
- Besonders hilfreich, um die Kapitalrendite von Unternehmen mit viel „überschüssigem“ Kapital oder zinsfreien Verbindlichkeiten realistisch zu vergleichen.
📘 Verschuldungsgrad (Leverage Ratio)
📈 Was ist das?
Der Verschuldungsgrad zeigt, wie stark ein Unternehmen durch verzinsliche Schulden (z. B. Kredite und Anleihen) im Verhältnis zum Eigenkapital finanziert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Kennzahl hilft, das finanzielle Risiko und die Abhängigkeit von Fremdkapital zu beurteilen. Ein hoher Verschuldungsgrad kann die Eigenkapitalrendite steigern – birgt aber auch erhöhte Risiken bei Zinsanstiegen oder Liquiditätsengpässen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Verschuldungsgrad steht für finanzielle Stabilität und Unabhängigkeit.
- Ein hoher Wert kann auf erhöhte Risiken hinweisen – insbesondere bei schwankenden Zinsen oder konjunkturellen Schwächen.
- Wichtig: Immer im Kontext zur Branche und Kapitalintensität bewerten.
📘 Umsatz
📈 Was ist das?
Der Umsatz zeigt, wie viel ein Unternehmen insgesamt mit seinen Produkten und Dienstleistungen verdient – also den Bruttoerlös vor Abzug von Kosten.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Umsatz ist eine der zentralen Kennzahlen zur Einschätzung der Unternehmensgröße, Marktstellung und Wachstumskraft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein wachsender Umsatz zeigt eine steigende Nachfrage und kann ein guter Frühindikator für Gewinnsteigerungen sein.
- Vergleiche von aktuellem und erwartetem Umsatz geben Hinweise auf das Marktumfeld und Analystenerwartungen.
- Wichtig: Starker Umsatz allein genügt nicht – auch Margen und Profitabilität zählen.
📘 EBITDA
📈 Was ist das?
EBITDA steht für „Earnings Before Interest, Taxes, Depreciation and Amortization“ – also Gewinn vor Zinsen, Steuern und Abschreibungen. Es zeigt das operative Ergebnis eines Unternehmens, bereinigt um bilanztechnische und finanzierungsbedingte Effekte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBITDA ist eine verbreitete Kennzahl zur Beurteilung der operativen Leistungsfähigkeit – insbesondere bei kapitalintensiven Unternehmen oder im internationalen Vergleich.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes oder wachsendes EBITDA spricht für starke operative Erträge – unabhängig von Bilanzierung oder Steuerlast.
- EBITDA ist besonders nützlich, um Unternehmen branchenübergreifend zu vergleichen.
- Wichtig: EBITDA ist keine offizielle Gewinnkennzahl – Abschreibungen und Finanzierungskosten werden ausgeklammert.
📘 EBIT
📈 Was ist das?
EBIT steht für „Earnings Before Interest and Taxes“ – also Gewinn vor Zinsen und Steuern. Es zeigt das operative Ergebnis eines Unternehmens nach Abschreibungen, aber vor Finanzierungs- und Steueraufwand.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBIT ist eine zentrale Kennzahl zur Beurteilung der Profitabilität aus dem Kerngeschäft – unabhängig von Kapitalstruktur oder Steuersystem.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes EBIT deutet auf ein profitables Kerngeschäft hin – vor Zinslasten oder steuerlichen Effekten.
- Es erlaubt objektivere Vergleiche zwischen Unternehmen mit unterschiedlicher Finanzierung.
- Im Vergleich mit EBITDA zeigt EBIT bereits den Einfluss von Abschreibungen auf das operative Ergebnis.
📘 Nettogewinn
📈 Was ist das?
Der Nettogewinn ist der verbleibende Jahresüberschuss (oder -fehlbetrag) eines Unternehmens – nach Abzug aller Kosten, Steuern, Zinsen und Abschreibungen
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Nettogewinn ist die zentrale Erfolgskennzahl – er zeigt, wie profitabel ein Unternehmen nach allen Kosten tatsächlich arbeitet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein steigender Nettogewinn zeigt, dass das Unternehmen effizient wirtschaftet – trotz aller Kosten.
- Die Entwicklung des Gewinns beeinflusst z. B. direkt das KGV und weitere Kennzahlen.
- Im Zeitverlauf lässt sich ablesen, wie stabil und profitabel ein Geschäftsmodell wirklich ist.
📘 Free Cashflow (FCF)
📈 Was ist das?
Der Free Cashflow gibt Aufschluss über die echte finanzielle Stärke eines Unternehmens – unabhängig von Bilanzierungsregeln. Er zeigt, wie viel Spielraum für Dividenden, Aktienrückkäufe oder Schuldenabbau besteht.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow bedeutet, dass ein Unternehmen echte Finanzkraft besitzt – unabhängig vom bilanzierten Gewinn.
- Er ist oft die solideste Grundlage für nachhaltige Dividenden und Aktienrückkäufe.
- Sinkender FCF kann ein Warnsignal sein – auch wenn der Gewinn stabil aussieht.
📘 Umsatzwachstum
📈 Was ist das?
Das Umsatzwachstum zeigt, wie stark sich die Erlöse eines Unternehmens im Vergleich zum Vorjahr verändert haben – tatsächlich (TTM) und auf Prognosebasis (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (Umsatz erwartet ÷ Umsatz Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein wachsender Umsatz ist ein zentrales Signal für steigende Nachfrage, Geschäftsausweitung und Marktanteilsgewinne – besonders bei Wachstumsunternehmen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachstum ist der Motor langfristiger Wertsteigerung – besonders bei Technologie- und Wachstumsaktien.
- Wichtig ist nicht nur das aktuelle Wachstum, sondern auch dessen Nachhaltigkeit.
- Prognosen zeigen, ob Analysten weiteres Potenzial erwarten – oder eine Verlangsamung.
📘 EBITDA-Wachstum
📈 Was ist das?
Das EBITDA-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens vor Zinsen, Steuern und Abschreibungen im Vergleich zum Vorjahr gestiegen oder gesunken ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBITDA ÷ EBITDA Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein steigendes EBITDA ist ein Zeichen für verbesserte operative Ertragskraft – unabhängig von Finanzierungsstruktur oder Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Starkes EBITDA-Wachstum signalisiert operative Effizienz und Skalierung – besonders relevant in Wachstumsphasen.
- EBITDA-Wachstum ist ein Frühindikator für Margen- und Gewinnentwicklung – sollte aber stets im Zusammenhang mit Umsatz und EBIT betrachtet werden.
📘 EBIT Wachstum
📈 Was ist das?
Das EBIT-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens (nach Abschreibungen, aber vor Zinsen und Steuern) im Vergleich zum Vorjahr gewachsen ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBIT ÷ EBIT Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Das EBIT-Wachstum ist ein direkter Indikator für die wirtschaftliche Entwicklung des operativen Geschäfts – unter Berücksichtigung der Kapitalintensität (Abschreibungen).
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Steigendes EBIT signalisiert wachsende operative Rentabilität – auch unter Berücksichtigung von Abschreibungen.
- Das EBIT-Wachstum ist ein wichtiges Maß zur Beurteilung von Geschäftsmodellen mit hohen Investitionskosten.
- Im Zusammenspiel mit Umsatz- und EBITDA-Wachstum ergibt sich ein umfassendes Bild zur operativen Entwicklung.
📘 Nettogewinn-Wachstum
📈 Was ist das?
Das Nettogewinn-Wachstum zeigt, wie stark der Jahresüberschuss eines Unternehmens gegenüber dem Vorjahr gestiegen oder gesunken ist – sowohl tatsächlich (TTM) als auch auf Basis von Prognosen (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (erwarteter Nettogewinn ÷ Nettogewinn Vorjahr − 1) × 100
Der erwartete Wert basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Der Gewinn ist die entscheidende Ergebnisgröße für ein Unternehmen. Ein wachsender Nettogewinn deutet auf steigende Effizienz, stabile Kostenkontrolle und nachhaltige Ertragskraft hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachsender Nettogewinn stärkt die Bewertung, Dividendenfähigkeit und Kursfantasie.
- Stagnierender oder rückläufiger Gewinn trotz Umsatzwachstum kann auf Margendruck hinweisen.
📘 Free Cashflow-Wachstum
📈 Was ist das?
Das Free-Cashflow-Wachstum zeigt, wie sich der freie Mittelzufluss eines Unternehmens im Vergleich zum Vorjahr verändert hat – also der Betrag, der nach allen operativen Ausgaben und Investitionen übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Free Cashflow ist der echte, verfügbare Geldzufluss. Wachstum in diesem Bereich ist ein Zeichen für finanzielle Stärke und steigende Flexibilität bei Dividenden, Rückkäufen oder Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Sinkender Free Cashflow kann auf steigende Investitionen, höhere Kosten oder stagnierende operative Erträge hindeuten.
- Besonders bei Dividendenwerten ist das FCF-Wachstum wichtig – denn Dividenden werden letztlich aus dem verfügbaren Cash gezahlt.
- Ein negativer Trend sollte genauer analysiert werden – er ist nicht zwangsläufig schlecht, aber potenziell ein Warnsignal.
📘 Bruttomarge
📈 Was ist das?
Die Bruttomarge zeigt, wie viel vom Umsatz nach Abzug der direkten Herstellungskosten (Material, Produktion) als Bruttogewinn übrig bleibt – also der „Rohgewinn“ eines Unternehmens.
🧮 Wie wird es berechnet?
Auch: Bruttomarge = Bruttogewinn ÷ Umsatz × 100
🏛️ Wofür ist es wichtig?
Die Bruttomarge gibt Aufschluss über die Profitabilität eines Produkts oder Geschäftsmodells vor Fixkosten, Steuern und Zinsen. Sie zeigt, wie effizient ein Unternehmen produzieren oder einkaufen kann.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Bruttomarge deutet auf starke Preissetzungsmacht und effiziente Herstellung hin.
- Sinkende Bruttomargen können auf Kostensteigerungen oder Preisdruck hindeuten.
- Besonders im Vergleich zu Wettbewerbern liefert die Bruttomarge wertvolle Einblicke in die Geschäftsqualität.
📘 EBITDA-Marge
📈 Was ist das?
Die EBITDA-Marge zeigt, wie viel vom Umsatz als operativer Gewinn vor Zinsen, Steuern und Abschreibungen (EBITDA) übrig bleibt. Sie misst die operative Effizienz – ohne Verzerrungen durch Finanzierung oder Buchwerte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBITDA-Marge hilft zu verstehen, wie viel operativer Gewinn ein Unternehmen aus jedem Euro Umsatz erzielt – unabhängig von Kapitalstruktur oder steuerlichem Umfeld.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBITDA-Marge zeigt starke operative Ertragskraft – unabhängig von Bilanzierungseffekten.
- Die Marge ermöglicht gute Vergleiche zwischen Unternehmen und Branchen.
- Ein stabiler oder wachsender Wert kann auf effiziente Kostenkontrolle und Skalierbarkeit hindeuten.
📘 EBIT-Marge
📈 Was ist das?
Die EBIT-Marge zeigt, wie viel Prozent des Umsatzes als operativer Gewinn nach Abschreibungen, aber vor Zinsen und Steuern übrig bleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBIT-Marge misst die operative Ertragskraft eines Unternehmens unter Berücksichtigung der Kapitalintensität (z. B. Maschinen, Anlagen). Sie eignet sich gut zum Vergleich von Geschäftsmodellen mit unterschiedlich hohen Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBIT-Marge zeigt, dass ein Unternehmen auch nach Abschreibungen effizient arbeitet.
- Sie ist besonders relevant in kapitalintensiven Branchen.
- Langfristig stabile oder steigende Margen sind ein Zeichen wirtschaftlicher Stärke und Preissetzungsmacht.
📘 Nettomarge
📈 Was ist das?
Die Nettomarge zeigt, wie viel vom Umsatz am Ende als „Reingewinn“ übrig bleibt – also nach Abzug aller Kosten, Zinsen, Steuern und Abschreibungen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Nettomarge gibt an, wie effizient ein Unternehmen über alle Stufen hinweg wirtschaftet. Sie zeigt, wie viel Gewinn tatsächlich je Euro Umsatz übrig bleibt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Nettomarge zeigt, dass ein Unternehmen nicht nur operativ stark ist, sondern auch seine Finanzierung und Steuerbelastung im Griff hat.
- Vergleiche mit Wettbewerbern geben Einblicke in die wirtschaftliche Qualität.
- Sinkende Nettomargen trotz Umsatzwachstum können ein Warnsignal sein – etwa für steigende Kosten oder sinkende Effizienz.
📘 Free Cashflow Marge
📈 Was ist das?
Die Free-Cashflow-Marge zeigt, wie viel vom Umsatz nach Abzug aller operativen Ausgaben und Investitionen tatsächlich als freier Mittelzufluss übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Marge misst die echte Liquidität, die ein Unternehmen erwirtschaftet – unabhängig von Bilanzierungsregeln oder Abschreibungen. Sie ist besonders relevant für Dividenden, Rückkäufe und Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Free-Cashflow-Marge zeigt, dass ein Unternehmen nachhaltig liquide Mittel erwirtschaftet.
- Sie ist ein starkes Signal für finanzielle Stabilität und Ausschüttungspotenzial.
- Wichtig ist der langfristige Trend – sinkende Werte können auf steigende Investitionen oder rückläufige operative Effizienz hindeuten.
📘 Ergebnis je Aktie (EPS)
📈 Was ist das?
Das Ergebnis je Aktie (EPS) zeigt, wie viel Gewinn auf eine einzelne Aktie entfällt – und ist eine der wichtigsten Kennzahlen zur Bewertung von Unternehmen.
🧮 Wie wird es berechnet?
Die verwässerte Aktienanzahl berücksichtigt auch potenzielle neue Aktien, etwa durch Optionen, Wandelanleihen oder andere Umtauschrechte.
🏛️ Wofür ist es wichtig?
EPS bildet die Basis für viele Bewertungskennzahlen wie KGV, PEG oder Payout Ratio. Es macht den Gewinn für Aktionäre vergleichbar – unabhängig von der Unternehmensgröße.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- EPS hilft, die Profitabilität pro Aktie zu erfassen – und ist besonders wichtig im Zeitvergleich oder im Vergleich mit Analystenschätzungen.
- Steigendes EPS kann ein Zeichen für stabiles Wachstum oder Aktienrückkäufe sein.
- Wichtig: Verwende verwässertes EPS für realistische Bewertungen – besonders bei stark aktienbasierten Vergütungssystemen.
📘 Free Cashflow je Aktie (FCF je Aktie)
📈 Was ist das?
Der Free Cashflow je Aktie zeigt, wie viel freier Mittelzufluss einem Unternehmen pro Aktie zur Verfügung steht – nach Investitionen, aber vor Dividenden oder Schuldentilgung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der FCF je Aktie zeigt, wie viel liquide Mittel pro Aktie tatsächlich im Unternehmen verbleiben – wichtig für Dividenden, Aktienrückkäufe oder Schuldentilgung. Im Gegensatz zum Gewinn ist er schwerer manipulierbar und daher besonders aussagekräftig.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow je Aktie ist ein Zeichen für hohe finanzielle Flexibilität.
- Er zeigt, wie viel Kapital ein Unternehmen effektiv einsetzen oder ausschütten kann.
- Besonders relevant für dividendenstarke Unternehmen oder solche mit starker Kapitalrendite.
📘 Short Interest
📈 Was ist das?
Short Interest zeigt, wie viele Aktien eines Unternehmens aktuell leerverkauft wurden – also von Investoren geliehen und verkauft, in der Erwartung fallender Kurse.
🧮 Wie wird es berechnet?
Der Wert zeigt den Anteil der Aktien, der aktuell auf fallende Kurse spekuliert wird.
🏛️ Wofür ist es wichtig?
Short Interest dient als Stimmungsindikator: Ein hoher Wert deutet auf Skepsis oder negative Erwartungen gegenüber dem Unternehmen hin – kann aber auch zu einem „Short Squeeze“ führen, wenn der Kurs plötzlich steigt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Short Interest deutet auf Vertrauen in das Unternehmen hin.
- Ein hoher Wert kann ein Warnsignal sein – oder eine Chance, wenn sich die Stimmung dreht.
- Besonders spannend in volatilen Märkten oder vor wichtigen Quartalszahlen.
📘 Employees
📈 Was ist das?
Die Mitarbeiteranzahl zeigt, wie viele Personen ein Unternehmen weltweit beschäftigt – ein Indikator für Größe, Struktur und Geschäftsmodell.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft bei der Einschätzung von Skaleneffekten, Effizienz und Personalkosten. Zusammen mit Umsatz und Gewinn lassen sich Kennzahlen wie Produktivität je Mitarbeiter ableiten.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Viele Mitarbeiter bedeuten große operative Komplexität – aber auch hohes Umsatzpotenzial.
- Produktivität je Mitarbeiter ist ein wichtiger Indikator für Effizienz.
- Besonders spannend bei stark wachsenden Tech- oder Industrieunternehmen.
📘 Umsatz je Mitarbeiter
📈 Was ist das?
Der Umsatz je Mitarbeiter zeigt, wie viel Erlös ein Unternehmen durchschnittlich pro Beschäftigtem erwirtschaftet – eine Kennzahl für Effizienz und Produktivität.
🧮 Wie wird es berechnet?
Die Mitarbeiterzahl stammt in der Regel aus dem letzten verfügbaren Jahresbericht.
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Geschäftsmodelle zu vergleichen – insbesondere zwischen arbeitsintensiven und technologiegetriebenen Unternehmen. Ein hoher Wert deutet auf Automatisierung, Effizienz oder hohen Wertschöpfungsanteil hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Umsatz je Mitarbeiter spricht für ein skalierbares und margenstarkes Geschäftsmodell.
- Ein niedriger Wert kann auf arbeitsintensive Prozesse oder geringere Wertschöpfung hinweisen.
- Besonders hilfreich beim Vergleich von Tech- vs. Industrieunternehmen.
Simply Good Foods Co Aktie Analyse
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Analystenmeinungen
17 Analysten haben eine Simply Good Foods Co Prognose abgegeben:
Simply Good Foods Co Events
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Simply Good Foods Co — Q3 2026 Earnings Call
1. Management Discussion
Greetings and welcome to The Simply Good Foods Company Third Quarter Fiscal 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Matthew Siler, Vice President of Investor Relations and Treasury. Please go ahead.
Thank you, Operator. Good morning and welcome to The Simply Good Foods Company's Third Quarter Fiscal Year 2026 Earnings Call for the period ended May 30, 2026. I'm joined this morning by President and CEO, Joseph Scalzo, and Christopher Bealer, Chief Financial Officer. A copy of our earnings release and accompanying presentation is available on the Investors section of the company's website at thesimplygoodfoodscompany.com. This call is being webcast, and an archive of today's remarks will be made available. During today's call, management will make forward-looking statements which are subject to various risks and uncertainties that may cause actual results to differ materially. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and in the company's SEC filings.
On today's call, we will refer to certain non-GAAP financial measures that we believe provide useful information for investors. Due to the company's asset-light business model, we evaluate our performance on an adjusted basis as it relates to EBITDA and diluted EPS. Please refer to today's press release for reconciliation of our non-GAAP financial measures for their most comparable measures prepared in accordance with GAAP. Finally, all retail takeaway data included in our discussion today, unless otherwise noted, reflects a combination of Circana's MULO+C measured retail channel data and company estimates for unmeasured channels for the 13 weeks ended May 31, 2026, as compared to the prior year. I will now turn the call over to Joe Scalzo.
Thanks, Matt. Good morning, everyone. Thank you for joining us today. This morning, I'll recap our third quarter results and then provide you with some perspective on the performance of our brands, as well as an update on our progress toward our turnaround objectives. Then, I'll turn the call over to Chris, who will discuss our financial results and our updated outlook in a bit more detail before we open it up to take your questions. In the third quarter, our results came in ahead of our expectations. While we're not satisfied with our overall performance, the quarter reinforced our belief that the actions we are taking are the right ones. We are ensuring organizational focus, improving execution, and strengthening the economic foundation of the business.
As we discussed on our last earnings call, our overall performance remains well below where we believe this business should perform, with each key financial metric declining meaningfully versus the prior year. Importantly, we remain in the early stages of our turnaround and have significant work ahead. Net sales declined 6.3% to $357 million. Gross margin declined 390 basis points to 32.5%. And Adjusted EBITDA declined 22.5% to $57.2 million. Quest and OWYN net sales grew 1.1% and 3.6% versus prior year respectively, and both brands performed slightly better than we expected. We continue to see encouraging momentum in some parts of the portfolio, particularly Quest chips and milkshakes. Atkins net sales declined 24.6% in the quarter, reflecting continued pressure from declining household penetration as a result of insufficient marketing support behind the brand.
Our retail takeaway declined 6.7% during the quarter, essentially unchanged from the second quarter. The purposeful nutrition category grew 10% during the same time frame. As I have spent more time inside the business, it's becoming increasingly clear to me that our challenges are largely execution-driven rather than category-driven. Purposeful nutrition remains an attractive category, supported by favorable long-term consumer trends, and retailers continue to view the category as an important source of growth. Importantly, these execution challenges are within our control to fix and the actions we are taking are designed to address each of them directly. Against that backdrop, we remain focused on 3 priorities that will determine the success of our turnaround. 1, strengthening the economics of our business. 2, ensuring consistency and discipline in strategic choices, driving organizational clarity, focus, and efficiency. And 3, rebuilding brand investment behind superior consumer insights and marketing execution.
We are making progress on each, although we are still in the early stages of the work. First, we are strengthening the economics of the business by improving our cost structure and rebuilding margins. We remain disciplined in managing our cost base and are executing against the structural actions we previously outlined. On pricing, we are taking the actions needed to offset inflation and other cost pressures. In addition, our productivity initiatives are gaining traction and are expected to provide benefits as we move forward. Given the significant cost inflation we are experiencing this fiscal year and believe will continue into the next year, we recently announced a high single-digit price increase across most of our portfolio that will become effective in September. This increase is necessary to offset inflation we are experiencing across proteins, packaging, and other key cost inputs.
While we remain focused on productivity initiatives and cost reduction efforts, rebuilding margins requires decisive action on pricing, and we believe this increase is appropriate. Second, while still early, we are beginning to see signs that the organization is operating with greater focus and accountability. Decisions are being made faster, priorities are clearer, and resources are increasingly concentrated behind fewer, higher return opportunities. We believe our better-than-expected financial performance in the quarter is early evidence of our progress. Third, we are revamping our brand building capabilities through stronger consumer insights, effective marketing, and using ROI as our key metric in making future investment decisions. As an example of the progress in this area, we are already shifting investments towards top of the funnel streaming and connected brand media investments to drive higher returns and strengthen our brand metrics.
Additionally, we just completed a thorough assessment of GLP-1 therapies and their impact on consumption behaviors that provided us invaluable consumer insights to guide our marketing and innovation efforts moving forward. With that, let me turn to an update on each of our brands. Turning first to Quest. Quest remains our largest brand and most important growth engine of the company. In the third quarter, Quest retail takeaway grew 1.4% compared to 2.4% growth last quarter. Importantly, household penetration increased 120 basis points year over year to 20.5%. The most important takeaway is that Quest continues to recruit consumers, demonstrating that the brand remains highly relevant. Our challenge today is to refocus on our core bar and chip segments that represent 80% of the brand, while improving buy rate, particularly within bars.
Within Quest, chips continue to perform well as consumers increasingly seek better-for-you salty snack alternatives. Quest chips consumption grew by over 17% in the quarter, and household penetration for Quest chips is now approximately 11%. This remains a strong example of where the brand is aligned with consumer demand and where focused investment can continue to drive growth. We see encouraging signs across pockets of our recent innovation. We're seeing a strong growth in our milkshake segment, which was up almost 50% in the period, albeit from a small base. This is another example of our ability to grow the brand when closely aligned with evolving consumer demand. At the same time, we're not satisfied with the recent performance of our bar business. Despite an incremental club rotation that began during the quarter, bar consumption declined by roughly 5%, which impacted total brand buy rate.
Re-accelerating growth in Quest bars is our highest priority. Our work is focused on improving top of the funnel communication, ensuring our innovation pipeline reflects evolving consumer preferences and supporting the bar segment with an appropriate level of marketing investment. During the quarter, we hired a new marketing agency on Quest with a single-minded objective of improving brand message to our key target consumer group by reasserting our superior nutritionals and taste across the entire brand portfolio and, most importantly, in our key bar segment. Moving to Atkins, Atkins retail takeaway declined 23.9% in the quarter, compared to a decline of 23.4% last quarter. Declining household penetration leading to distribution losses continue to be the main drivers of the decline. Total brand household penetration currently stands at 8.5%, down 220 basis points from last year.
Consistent with what we said last quarter, there are also broad brand factors we are addressing. Atkins has not received the proper level of marketing support, messaging was less consistent and moved away from the brand's core weight management proposition, ability to recruit new consumers weakened, which led to slower velocities. Our focus now is on resetting the retail baseline and managing Atkins in a more disciplined, fact-based manner. Many of our retail partners continue to view Atkins as a relevant brand with a meaningful base of loyal, heavy buyers. Importantly, we do not believe Atkins needs to be a different brand. It needs to become a better executed version of the brand consumers have trusted for decades. We believe that Atkins can play a meaningful role in a GLP-1 world with consumers seeking weight management benefits. Of note, Atkins' consumption was more consistent during the quarter on a weekly run rate basis.
As we move into the fourth quarter and into next year, Atkins comparisons become more favorable as we lap household and distribution losses during the prior year. This is very consistent with our second turnaround priority, remaining consistent in our strategic choices. For Atkins, that means restoring clarity around the consumer proposition, being disciplined about where we invest, and rebuilding the brand from a stronger, more focused foundation. Turning to OWYN, OWYN retail takeaway declined 1.3% in the third quarter compared to a decline of 2.4% last quarter. Total brand household penetration currently stands at 4.3%, flat year over year. As we reported last quarter, the combination of a product quality issue and ineffective marketing execution negatively impacted performance on a number of OWYN products. We have addressed the product issue, but do expect distribution losses over the next 6 to 12 months because of poor marketplace performance.
With that said, we continue to believe OWYN has meaningful long-term potential. Importantly, our confidence in OWYN is based on the underlying consumer proposition, not on recent execution. We believe the challenges we are addressing stem primarily from integration and execution issues rather than a lack of consumer demand for clean label plant-based nutrition. Our consumer research continues to indicate there is a significant and growing audience seeking functional nutrition benefits such as plant-based protein and clean label ingredients. Looking ahead, our priority is to complete the distribution reset and refocus OWYN growth on core ready-to-drink and powder business. Before I turn the call over to Chris, I'd like to leave you with why I remain confident in the future of Simply Good Foods, despite our current performance challenges. Simply put, I believe our category remains attractive, and our brands remain relevant, and our challenges are fixable.
First, we operate in an attractive category supported by long-term consumer trends around health, wellness, and convenient nutrition. These trends remain highly relevant, and retailers continue to view purposeful nutrition as an important source of growth. In the food and beverage sectors where any type of growth is at a premium, this category continues to outperform. Second, we have a portfolio of strong brands that connect with distinct consumer segments, and we are confident we can grow these brands longer term. Quest continues to expand its household penetration and remains one of the leading brands in the category. Atkins retains a loyal consumer base and meaningful brand equity, ideally suited to address the needs of GLP-1 weight management consumers, while OWYN gives us access to the growing plant-based and clean label protein segment. Third, we have built strong capabilities in marketing, sales, R&D, and managing an outsourced supply chain.
While we have not consistently translated those capabilities into performance recently, we believe they remain an important competitive advantage that can support future growth and value creation. Fourth, our asset-light operating model remains a competitive advantage. It provides flexibility, supports strong cash generation, and allows us to direct resources towards the areas where we see the greatest opportunities to create value. And finally, we continue to maintain a strong balance sheet and substantial financial flexibility, which provides the ability to invest behind our brands, pursue the right strategic opportunities, and continue allocating capital to the best long-term return. Taken together, these strengths reinforce our confidence that we can restore profitable growth and deliver against our long-term financial algorithm. To be clear, we're not satisfied with our current performance, and there is considerable work ahead.
However, I am increasingly confident that we've correctly identified the issues, established the right priorities, and are taking the actions necessary to improve execution, restore profitability, and return the company to sustainable growth. While the turnaround remains in its early stages, I believe we are building a stronger and more valuable company for the long term. I'll turn the call over to Chris, who will provide more detail on this quarter's results and our updated outlook for the year. Chris?
Thanks, Joe. Good morning, everyone. As Joe mentioned, our Q3 performance was ahead of our expectations. Specifically, we reported third quarter net sales of $357 million, which declined 6.3% versus the prior year, mainly due to weaker consumption. Adjusted EBITDA was $57.2 million, a decline of 22.5% year over year. Gross profit of $116.1 million decreased 16.2% versus last year, driven by volume declines, higher input costs, and one-time restructuring costs to streamline our operations. Gross margin was 32.5%, a decline of 390 basis points versus prior year due to the higher input and restructuring costs. Excluding $6.2 million in restructuring costs, gross margin was 34.3%, a 210-basis-point decline versus the prior year period, exceeding our forecast driven by productivity initiatives.
Selling and marketing expenses of $39.2 million increased 15.9% versus the comparable year-ago period, driven by investments in our selling capability and increased spend to support longer-term brand growth. Excluding $1.1 million in one-time expenses due to a marketing agency change, selling and marketing expenses increased 12.7%. A portion of this marketing investment allows us to complete a key marketing mix study, which will improve the effectiveness of our future marketing spend. G&A expenses of $40.5 million decreased 1.9% versus the comparable year-ago period. Excluding $6.2 million in restructuring costs in the current period and $5.2 million of integration expenses from the prior period, G&A declined 5% to $34.2 million, principally due to the impact of lower employee costs. On a GAAP basis, we had an operating loss of $49.9 million compared to income from operations of $59.3 million last year, primarily due to the non-cash loss on impairment of $82 million related to Goodwill and the Atkins and OWYN brand intangible assets.
Net interest expense was $5.1 million, while the effective tax rate was 5.4%. Net loss was $52 million, down from net income of $41.1 million last year due to the impairment I noted a moment ago. Moving to the balance sheet and cash flows, as of the end of Q3, the company had cash of $123.9 million and an outstanding principal balance on its term loan of $400 million, bringing our net debt to trailing 12-month Adjusted EBITDA to approximately 1.2x. The company bought back about 2 million shares in the third quarter. We have spent approximately $240 million buying back our outstanding common stock over the past 12 months, including approximately $213 million this fiscal year. As of July 9, 2026, the company has approximately $158 million remaining under its current share repurchase authorization. Year-to-date cash flow from operations was $102.2 million compared to $133.1 million last year. Capital expenditure was $10.1 million, mainly reflecting the investment to support additional capacity in our salty snacks business that we previously discussed.
Finally, moving to our updated outlook, we now expect the following. Fiscal year 2026 net sales are now expected in the range of $1.345 billion to $1.355 billion, representing a decline of 7% to 6%. This assumes current consumption trends continue and includes the impact of expected distribution losses. GAAP gross margins are now expected to decline roughly 375 basis points. This is a result of slightly higher input costs, especially proteins, restructuring costs within our supply chain, and a cost of mitigating the OWYN product quality issue earlier this year. Fiscal year 2026 Adjusted EBITDA is now expected in the range of $220 million to $225 million, representing a year-over-year decline of 21% to 19% respectively. We expect our effective tax rate to be roughly 25%. Our expectations on interest expense remain unchanged, and we now expect capital expenditures to be in the range of $25 million to $30 million.
Given shares repurchased year-to-date, the company expects a weighted average diluted share count of approximately 90 million shares outstanding. As it relates to the fourth quarter, we expect net sales in the range of $322 million to $332 million, which represents a decline of 13% to 10% versus prior year. This incorporates a similar consumption trend as we've been experiencing, but our belief that we will undership consumption. We expect our Q4 GAAP gross margin performance will be our strongest of the year, as productivity initiatives provide some relief against sustained inflationary pressure. We expect Adjusted EBITDA in the range of $52 million to $57 million, representing a year-over-year decline of 22% to 14%. With that, Joe and I will now take your questions.
[Operator Instructions] Our first question comes from the line of Peter Grom with UBS. Please proceed with your question.
2. Question Answer
Great, thank you and good morning everyone. So I was just hoping to get some perspective on the top line trajectory. I think the quarter itself came in better than most were expecting, but the guidance does imply a bit of a weaker exit rate. So can you maybe speak to that? Maybe, you know, touch on kind of what we should be thinking about in terms of the gap relative from shipments and consumption. That's part 1. And then, and I guess just as we think about, and I know we'll get guidance to the later date. But just as we think about '27, you know, any thoughts around how we should be thinking about the exit rate, as well as the fact that you touched on kind of this high single-digit pricing action in September. So just any thoughts on how we should be thinking about the top line trajectory and the related pricing as we look at '27 will be helpful as well. Thank you.
Thanks, Pete. I'll take your first question. So, in terms of Q4, look, consumption, as we said, in Q3 was slightly better than expected, and we expect those trends to continue into Q4, similar consumption in Q3. Q4 is Q3 overall. We've incorporated those consumption trends and as we said on the call, our belief that we're going to slightly undership consumption in Q4 to enter next year with correctly organized and sized customer inventories. Part of the inventory reduction we talked about as well is related to the distribution losses we're expecting most of the year on OWYN. And then from an EBITDA perspective, we've updated guidance to reflect the Q3 outperformance and overall improving gross margins, again, keeping in mind the restructuring costs that we had in Q3 we talked about, again, on the prepared remarks.
Peter, I'll talk about the second part of your question, which is about how to think about what's happening now as it pertains to FY '27. I thought we'd get at least 3 questions in before someone asked us about fiscal '27, but here we go. So, look, I think it's, we're in the planning stages for next year, so we're still pulling together the assumptions necessary to get a view of what we think next year's look like, and we're still obviously executing against this year. So there's still a lot of work in front of us before we have a confirmed view of next year. I think if you just step back, we now have 2 quarters of pretty consistent consumption change versus a year ago. I think that's a pretty good jumping-off point, as you think about next year. And then you mentioned the price increase.
I just want to step back. We believe the pricing action that we announced this quarter is appropriate for the current economic environment we are facing this year. When I came back to the business, substantial price inflation driven by protein complex, packaging costs, and other cost pressures. We did talk at the last earnings call that one of our turnaround beliefs was that we will use pricing to offset cost inflation. And we expect the inflation we're experiencing now to continue into the next fiscal year. So again, we think pricing action is appropriate for the current economic environment. Frankly, not ideal for a turnaround.
So we're going to take pricing. We would expect, as we look at fiscal '27, elasticities to be at 1 or higher. So there's going to be a volume impact to our business. Volume drives household penetration and buy rate. Just makes sense. The consumer dynamics of the turnaround that much more difficult. But, you end up having to look at these situations as short-term pain for long-term gain. For us to be able to compete in this category effectively, we need a P&L that gives us the firepower to invest in marketing, which is one of the issues that we face, structural issues that we talked about last quarter.
Gross margins erode, marketing as a percent of sales going down, over reliance on price promotion, SG&A growing faster than the top line. So first step here is address the cost inflation issue. And as we go forward into next year, we'll deal with the volume impact of that and the consumer dynamics of that as we work through the year. Did I answer the second part of your question?
No, that was great. Thank you. Thank you both for that. Super helpful. I'll pass it on.
Our next question comes from the line of Matthew Smith with Stifel. Please proceed with your question.
Hey, good morning. I wanted to come back to the performance of Quest in the quarter. Consumption was down 5%, but that included the benefit of a club rotation. Should we think of a deceleration in consumption for Quest in the fourth quarter without that rotation? Can you kind of expand on your view of the performance of the brand in the rotation and distribution expectations for Quest as we move forward.
Yes, good morning. Let me talk Quest overall first because I think it's important to put bar in relationship to brand. So if you just step back, the brand's been able to consistently grow household penetration in the category. So don't have a brand relevance issue based on the consumer dynamics. And as you look at the business, there are parts of this portfolio doing particularly well. Our salty snack business continues to grow. We have a small but growing chain of operations business with our milkshakes. So as you look at the brand, not a brand relevance issue. We have a bar issue which we believe ties to a number of issues that we face with that business. The first one is our innovation over the last few years, frankly, hasn't met our own expectations.
So I don't think we saw where the consumer was going, and our innovation kind of failed to address the movement of the consumer in what is a pretty dynamic category. So that would be the first thing. Second thing, top of the funnel communication on this business has been less than optimal and not highly supportive of bars. So having to fix the top of the funnel communication and strategy such as it more directly addresses bars is important. And where I think we've been missing there is this is a brand that's always been about superior nutritionals and craveable taste. I think we lost focus on that and we need to get that back. And then as we look at the investments that we've made in the business just overall, spending less money on top of the funnel on the brand overall has not helped our bar business.
So again, bars is a piece of the business. We got to get back on track, but we're doing that from the basis of a pretty healthy brand. So as you look at what we experienced in the third quarter relative to the fourth quarter, consumption in the third quarter down 5%. We had a bar rotation at a club store, which will continue to consume through the fourth quarter. So we'll see, we think, similar trends on bar and on Quest as we move third into fourth quarter. As we move into the next fiscal year, that rotation burns off and we're back to a more steady state consumption business. And so as we move into '27, you know, I would expect bars to be a little bit weaker than what we expected in the third and fourth quarter as we move into the next fiscal year. And obviously, our top priority is to get that back on track.
Thanks, Joe. And if I could ask a follow-up. You talked about the requirement or one of the priorities for the business is, you know, increasing the investment in top of the funnel marketing or maybe marketing overall, you have a couple of changes underway, marketing agency and your marketing mix study, do you have the ability to confidently increase the investment in marketing today? Are you kind of waiting out for the new messaging to be tailored and the new marketing mix results to come in? I guess as we look ahead, you talked about the change in the marketing mix about some of the pressure in fiscal '27. Is it waiting to increase the marketing spend or do you feel confident you can start to pursue that more quickly?
Yes, great question. I think it's, you know, first of all, in coming back and fresh eyes in the business, where we've been spending the money deserves a hard look. So I think first and foremost, there's a reallocation of investment, right? We were shifting on Quest. We actually grew marketing investment, but we're shifting it down the funnel. So money spent less on top of funnel activities, more down into the funnel, more closer with customers. So I think we missed an opportunity there to strengthen our brand proposition. I think that's the first thing. Second, we're going to get the marketing mix back in a few weeks, so I'm going to get a sense of ROI, but historically top of the funnel marketing investment is the highest return we have as a business, right? So the shift down the funnel certainly has hurt ROI.
So we know we're going to be shifting mix. Your larger question, which I think is an important one, is more structural. I believe this is a business that we're in a consumer-driven, brand-driven business where you're constantly recruiting consumers and driving buy rates. You need marketing firepower to do that, which is P&L very different than the one I have right now. Gross margins approaching 40%. Marketing as a percent of sales at 10%. EBITDA margins approaching 20%. We're not there today. We're just not there today. I want to have the ability over time with increasing gross margins to put more money back into advertising to drive our top line and improve our overall brand metrics and attributes. We'll use marketing mix to justify the, even with the shape of the P&L that ideally we want to get to, we're going to use ROI to justify further investments.
That's true on Quest and that's true on any other brand, right? It's got to be justified by the investment. But my fundamental belief is that if your ideas are good enough, your communication is good enough, and I love the new agency that we brought on, on Quest, you'll have that ability to make those investments. So I'm optimistic about the future. We've got some work to do right now to get there.
I'll pass it on.
Okay, Matt. Good day.
Our next question comes from the line of James Salera with Stephens Inc. Please proceed with your question.
Good morning, guys. Thanks for taking our question. So you talked about the distribution losses for Atkins and OWYN over the next, I don't know, 6 to 12 months. I assume there's probably still opportunity for Quest to continue to gain distribution. Could you walk us through how we should think about the portfolio as a whole, you know, plus or minus on distribution for the next, you know, kind of 6 to 12 months?
Yes, Jim, good morning. You know, I have thought that the organization has been too focused on distribution as a key metric in running the business, rather than household penetration and buy rate. We're a consumer-driven company. How we think about driving our business should be more consumer-centric than distribution-centric. So I'll give you a, and the reason I say that is, I've been in businesses, this is one of them, where I've grown distribution and the business hasn't grown and I've lost distribution against the backdrop of rapidly growing consumption. So I don't find it to be a particularly predictive metric of your ability to grow the business. If your household penetration, if your marketing is working, your innovation is good, and you're bringing people into your brand, distribution could be a top spin, but I never believed it's the most important metric. That said, I'll answer your question.
I'll talk about OWYN first because I think it's easy to understand how post-integration, we did a lot of line extension, non-core extensions on the business at a time when we were taking control of the marketing on OWYN and the marketing misfired and those non-core items didn't perform well. Those have to come out of the mix. And it's a majority non-core items. If you look at the core underlying core, and that's going to take us call it 6 plus months for that to work out. Nicely, though, if you look at the core, so a 32-gram protein shake business, then our focus on OWYN is get the marketing back to what works, focus on our core powder and shake business, and start closing the gap between our household penetration somewhere around 4% and the universe of people interested in the benefits of plant-based and clean, which is closer to 18% to 19%. So that one's easily to understand that's going to happen over the next, call it 6 plus months.
Atkins, you know, different stories, kind of same situation, though. Atkins, we, it's a kind of a chicken or an egg, which you want to believe. I believe that when I was running this business and we grew it for over a decade, the key driver of it was our ability to recruit consumers. And the key weapon that we had is our ability to increase marketing support. You pull the marketing back, you stop recruiting consumers, your household penetration shrinks, and you lose distribution. So we've been undoing what we, over the last few years, what we did to build the business over the previous decade. So you have to get back to the fundamentals and act. So we're seeing distribution losses that reset the business at retail in line with our current household penetration. That's, you're going to start seeing as we move through the fourth quarter and then the next year the comparison starts, the household penetration is getting flatter and you're going to start seeing the business start to stabilize.
So that's going to happen, call it, as we move through, it'll start getting, the comps get a little bit better in the fourth quarter and as we move through next year, the comps continue to improve, right? And then it's going to be our job, you know, once we get that reset, can we actually grow household penetration on this brand? Can we find a consumer insight idea, the room in the P&L to make the investment to grow household penetration? By the way, when I ran this company before, the highest return on marketing was Atkins top of funnel communication. So if you just reverse that, pulling it out is the worst decision you could possibly make.
Thirdly, we've been growing distribution on Quest. We had growth this last year on our bar business, we had growth on our salty snack business, we even grew our baked business, right? And despite the TDP growth, we've seen softening of consumption. So I expect we're going to continue to see a benefit from distribution gains on Quest. I'm not sure that's the issue on this business. I think the issue on our business is top of funnel communication, innovation on bars that has consumer insight to it, and our ability to drive household penetration on the brand over time. Did I address that, Jim?
Yes. Yes, that was exceptionally expansive. And if you'll indulge me in a small follow-up, just kind of expanding on the conversation related to the household penetration, how should we think about the impact of some of the changes you're making on the marketing front, whether it's the messaging or scaling, what's sort of the timeframe when we should really start to see that flow through to velocity and presumably back to household penetration in a positive way?
Yes, it's a good question, and it's probably the question that keeps me up the most at night, and it's the magic question. It's the when question in a turnaround. So I caution against thinking about turnaround in terms of a time, a quarter, when all of a sudden everything gets better. I've been in a few turnarounds. My experience, they happen in stages. So let me try to give you what I think, how this thing will play out so you get some sense of what to be paying attention to. The first part of a turnaround is diagnosing the issue, get focused on addressing those issues, approve accountability, execute better, and make better decisions, right? That's the earliest stages.
I think we've been doing a pretty good job on that early stages, more work to do. So rather than anchor you on a specific timeline, I'd encourage you to watch leading indicators. First group would be, are we being consistent in our choices? You talk to us quarterly, you get to have conversations with us. Are we saying the same things in a consistent basis? Are we executing better? Do we say what we're going to do and deliver on what we say we're going to do? And then a real key one, are our margins improving? We've told you we've got structural margin issues. Are those getting better over time? Because that provides us the fuel we need to drive our top line. Then you get to strengthening household metrics. And then with household metrics strengthening, you start seeing stability in Atkins.
You see core performance improving on Quest, right? Once that's kind of the sequence, once you get to those brand metrics getting better, the brand starting to stabilize and grow, I'm pretty confident the financial results will follow. The when, you know, it's going to come in stages. It's going to take some time. My crystal ball is not that good, frankly. So we're just going to play the hand we got and make it better as we go along.
Great. Well, I appreciate all the detail. I'll back in the queue.
All right. Thanks, Jim.
Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
Good morning everyone. Can I switch to the margin side of things and the inflation question. I'm specifically interested in cocoa. I think the input must be coming down at this point. That was a problem last year. But you're now faced with a fairly sharp spike in trucking costs here in the U.S. I assume that dairy input cost inflation is also trending up fairly meaningfully. Where are you at in terms of expected cost growth and therefore how much pricing you're expecting to take in September.
Yes, hi, Alexia. We are seeing input inflation across multiple areas of the business, as we talked about in the prepared remarks. I would just keep in mind, we also said that we, Joe also said earlier that we'd be taking a high single-digit price increase that will be effective in September. We feel that's appropriate to offset input inflation that we're seeing, and to your specific comment on cocoa, as I've said, I think on the last couple of calls, we were expecting and have seen a consistent reduction in cocoa prices in our P&L over this year, and we are still seeing what we expected for Q4. So there's really no change in the cocoa price we'll have in the P&L and Q4, and that's significant. Actually, there is a deflation there versus what we had this time last year. But again, that's very consistent with what we said. That's been, as I said last quarter, significantly offset by the very high ramp-up in whey pricing.
So yes, we're seeing input overall ingredient inflation. We're seeing packaging inflation. We are seeing some freight inflation as well. And this is exactly why we've announced recently a high single-digit pricing trend that we need to offset the input inflation and start to move our economic structure of the business back towards the long-term algorithm that Joe laid out earlier.
As a follow-up, you mentioned the plan to lean into the GLP-1 opportunity more deliberately. Could you talk about how you're planning to do that based on the insights you've generated so far? I think previously the former management team thought they were going to help people who were coming off those drugs to maintain their weight loss once they gave up the GLP-1 drugs. Is there a new idea here for how to lean into that. Thank you, and I'll pass it on.
Lexi, I love the question. Can I just ask you to be a little patient? I'd like to get a little bit of your time. I just reviewed the strategy work on it. I just want to step back. I brought back the agency that crafted the lifestyle work on Atkins a few years back, they did the very successful Rob Lowe work, understand the brand and the category, better than any folks I've ever worked with, right? So very talented. They've been on a project since I came back to address that exact same question you're asking about. I saw the work, their strategic work and their insight work about 3 weeks ago.
There's a little bit more work we need to do. We are hopefully going to be, as we move into the next fiscal year, testing some ideas in the marketplace that will give us some confidence that we're on the right path. So I'd like to kind of answer that question for you maybe the next time we get together when we're closer to the marketplace. Suffice it to say, just stepping back and looking at GLP-1 consumers, those that are using the therapies for weight management, lot of really compelling insights coming out of that work that are, I think important for a brand like Atkins, but I think important for the entire category going forward. On Atkins, the one tidbit I would give you is high interactivity between Atkins, snack, product buyers and the use of GLP-1s for weight management. So there's already high interactivity between the 2, which just tells you the brand's relevant among these people. You have to tap into an insight that can help you start growing the population of people using the brand.
And I'm pretty confident that we can do that. But we've got some work to do. And we've got to prove the economics of that work, too. We've got to prove that we get a return for marketing investment, that we can grow household penetration on the brand and get some confidence that we can get back into the marketing business on Atkins. Work to do. Give me a little bit more time, and I'll come back to you with some of those insights.
Sounds good. I'll look forward to that. Thank you. I'll pass it on.
Our next question comes from the line of Jon Andersen with William Blair. Please proceed with your question.
Yes, thanks operator. Two quick ones. You know, for Quest, chips business has really been kind of a workhorse for the franchise the past few years. I was wondering, Joe, if you could talk a little bit about the recent performance of the chips, part of that portfolio and, maybe more important kind of your outlook, you know, kind of performance outlook as you look ahead to maybe more fiscal '27 in and maybe the competitive backdrop. And then second is just related to capital allocation. You obviously have plans for reinvestment in the business, and you've talked about top of funnel marketing, et cetera, also been buying back quite a bit of stock. So how are you thinking about capital allocation going forward relative to the past couple of years. Thanks.
Yes, good question on our chips business. Try to frame it a little bit, it's a half a billion dollar brand already. And, you know, so big brand, growing in the mid-teens and continues the, we've continued to show the ability to grow the top line by growing household penetration and driving buy rate. We continue to be pretty confident in our ability to do that. We believe focusing on the core of our business on Quest, reallocating our marketing investment to the top of the funnel around a message around nutrition and taste can only help in that regard. As you step back a little bit and you look at kind of our recent innovation on our tortilla business. We've kind of played through the flavor variety. And that as you add more flavors to the business, they become less incremental over time.
So it puts a little bit of pressure on us to come up with innovation ideas that are more incremental. And we think we can do that. We think there's other areas of salty snacks that we can continue to perform well in. One of the areas when I came back that I was surprised hadn't progressed more was our cheese cracker business and I believe there's opportunities for that business to grow. And then I've looked at the innovation pipeline. I'm very confident that there are ideas coming in salty that will enable us to continue to growth. But overall very optimistic in it.
You know, can you grow up? In the first quarter, I think the business was growing 35%. Can you grow a half a billion dollar brand at 20% to 30% into perpetuity? No, you can't do that. But can we grow household penetration, grow that business, continue to drive the top line? Yes, we can, and we intend to do that.
I'll take the capital allocation question. Our first priority on capital is to provide funding for the turnaround, as Joe mentioned. Second priority that we've, again, commitments we've already made, we've talked about previously, is the capacity expansion on chips. As you probably noted in the updated guidance, we did reduce our capital expenditure outlook. We made some investment priority changes. So we reduced our outlook to $25 million to $30 million from $30 million to $40 million. So we're taking a hard look at everything we're spending capital on.
As we look to the balance of the year and maybe into next year, we'll continuously assess the best uses of cash, which could be for the turnaround. It could be for buybacks. It could be for debt paydowns. It could be for other strategic priorities. So we'll continuously assess where the best returns are for the business.
Our next question comes from the line of Robert Moskow with TD Cowen. Please proceed with your question.
Thanks, Joe. Thanks, Chris. Just a clarification there, Chris. The guidance for share count of 90 million would imply that there's a lot of share repurchase going on in fourth quarter. So as you went through your capital priorities, I didn't hear you bring that up. Am I doing the math right? Is there a big slug coming in fourth quarter?
No, Rob, actually we're essentially telling you what the diluted share count is as of today. So that's our guidance for Q4 as it typically is, right? We typically have, we can typically just guide for whatever our share count is on the day of the earnings call.
Oh, okay, okay. So I understand now. All right. And maybe just a broader kind of marketing question, Joe, I remember you talking a lot about how not all proteins are created equal and that, you know, net, you know, net protein or net carbs is like a really important metric that consumers should be more educated on. Is there any effort from a marketing standpoint that you're working on to try to educate the consumer either through retailer advocates or others, to help you versus competition?
Yes, great question and good memory. It was actually Dr. Jon that I think, when he came into town, that kind of did the nutritional 101. So, yes, look, the strength of Quest has always been, like, craveable taste with the best in the industry products nutritionals right and when you're looking to when you're looking to restore accelerate growth you always go back to the core DNA of a brand I firmly believe that and so you can expect, you know, going back to the core, which is our bar and chip business, going back to the core DNA, which is nutrition and taste, going back to the core of top of funnel communication. So, yes, you can expect us to go back there and you can expect us through all elements of the funnel. So influencers, social, digital, top of the funnel to be talking about those 2 things going forward. And as we innovate, those are the 2 vectors you innovate on, right? Craveable taste, best in class nutrition, right? And so we will absolutely do that. And as we get down into the funnel and other parts of our marketing mix, do that in a more competitive way, right? Point out opportunities in some of the competition for where they might be may not be as compelling a nutritional profile as maybe consumers would think.
So, yes, a little bit of education on that, too. So, yes, great question.
Our final question this morning comes from the line of Stephen Robert Powers with Deutsche Bank. Please proceed with your question.
Hey, great. Thanks so much. So, Chris, just a quick follow-up on just to 100% clarify on the share count. So, you're saying, you know, around about 90 million for the fourth quarter, which I think would imply more like 93 for the year as opposed to I think a lot of people this morning were thinking 90 for the full year. So, just want to fully confirm that.
Yes, our diluted share count is around 90 million shares. Keep in mind we have a net loss on a GAAP basis, a net loss for the year, so that might be feeding into the calculation you're looking at. As I said, I've prepared remarks. We did purchase some shares during the quarter we just ended.
Yes, yes, okay, I got it. And then, Joe, you know, we talked about it a lot across the portfolio, but the perspective I wanted to get from you was more around aggregate SKU complexity and productivity per SKU. It sounds like on OWYN, there's some envisions you know, reduction there as you refocus on the core. As I think about plans on Quest and Atkins, talking more about top of the funnel communication, that kind of stuff, didn't seem like there was as much kind of work to clean up the portfolio in terms of eradicating less productive SKUs. Just wanted to get your perspective on where that stands and whether there is work to do there or not?
You know, it's an area where I think the team here has done a pretty good job over the last year, 18 months. They've done a nice job of cleaning up the portfolio, replacing less productive SKUs with more productive SKUs. I don't see it as a burning platform for us. I think we've done a pretty good job. And I think it's always work, right? So I have a simple philosophy. If you're going to launch an item, you're deleting an item, right? So you're always trying to have your most productive assortment in the marketplace and keeping your complexity down. It's never a surprise that when you look at business that 20% to 25% of the SKUs drive most of the value in a company so you want to you want to be focusing on those items and driving those items but the team has done a pretty good job in driving efficiency in SKUs, which drives efficiency back into your supply chain.
We have a little bit of trimming to do, but it's not excessive at all.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to management for final comments.
Yes, thanks for your participation today. I did want to close with thanking the employees here at Simply Good Foods. Turnarounds are never easy. The team here has done a marvelous job of rallying around the turnaround, getting focused on priorities and executing better. Really proud of the organization. I just want to say thank you to all of them, and thank you for your interest in our business. I look forward to talking to you next quarter. Have a good day.
This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
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Simply Good Foods Co — Q3 2026 Earnings Call
Simply Good Foods Co — Q3 2026 Earnings Call
Q3: Umsatz und Adjusted EBITDA rückläufig, Management startet frühen Turnaround mit Preismaßnahmen, Marketing-Neuausrichtung und Fokus auf Margen.
📊 Quartal auf einen Blick
- Umsatz: $357 Mio. (-6,3% YoY)
- Bruttomarge: 32,5% (−390 Basispunkte; ohne $6,2 Mio. Restrukturierung 34,3%)
- Adjusted EBITDA: $57,2 Mio. (bereinigtes EBITDA; −22,5% YoY)
- Retail Takeaway: −6,7% (13‑Wochen‑Daten, komb. Circana + Schätzung)
- Nettoergebnis: Verlust $52 Mio. (inkl. $82 Mio. Goodwill-/Marken‑Impairment)
🎯 Was das Management sagt
- Prioritäten: Drei Fokusbereiche: Wirtschaftlichkeit stärken, klare strategische Prioritäten/Organisation, Markeninvestitionen mit ROI‑Fokus.
- Preisgestaltung: Geplante Preiserhöhung im hohen einstelligen Prozentbereich ab September zur Deckung von Inflation bei Proteinen, Verpackung und Transport.
- Marken & Marketing: Neue Agentur für Quest, Verlagerung hin zu Top‑of‑Funnel Streaming/Connected‑Media; GLP‑1‑Studie liefert Consumer‑Insights zur Produkt- und Kommunikationsausrichtung.
🔭 Ausblick & Guidance
- FY26 Umsatz: $1,345–1,355 Mrd. (−7% bis −6% YoY)
- FY26 Adj. EBITDA: $220–225 Mio. (−21% bis −19% YoY); GAAP‑Bruttomarge −~375 bps
- Q4: Umsatz $322–332 Mio. (−13% bis −10%); Adj. EBITDA $52–57 Mio.
- CapEx & Steuern: CapEx $25–30 Mio.; effektiver Steuersatz ~25%
- Risiken: Management erwartet Preiselastizität ≥1 (Volumenrisiko) und angekündigte Distributionseinbußen bei Atkins/OWYN 6–12 Monate.
❓ Fragen der Analysten
- Top‑Line & Pricing: Analysten fragten nach Exit‑Rate und Wirkung der angekündigten Preisrunde; Management sieht kurzfristigen Volumen‑Gegenwind, aber notwendige Margenmaßnahme.
- Quest‑Bars: Kritik an schwacher Bar‑Performance; Management nennt Innovations‑ und Kommunikationsfehler, neue Agentur und Fokus auf Bar‑Wiederbelebung.
- Atkins/OWYN & Distribution: Konkrete Fragen zur erwarteten Distribution‑Reduktion; Firma nennt 6–12 Monate Reset, will Fokus auf Kernsortimente richten.
⚡ Bottom Line
- Fazit: Frühe Phase eines strikt umgesetzten Turnarounds: Preiserhöhungen und Produktivitätsmaßnahmen sollen Margen stabilisieren, während Marketing‑Reallocations Quest‑Chips als Nachfrageanker stützen. Anleger sollten Margenverbesserung, Household‑Penetration (Marken‑KPIs) und Marketing‑ROI als führende Indikatoren beobachten; kurzfristig bleibt Umsatz‑ und Volatilitätsrisiko bestehen.
Simply Good Foods Co — Q2 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to The Simply Good Foods Company Second Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. Matt Siler, Vice President, Investor Relations and Treasury. Thank you, sir. You may begin.
Thank you, operator. Good morning, and welcome to The Simply Good Foods Company's Second Quarter Fiscal Year 2026 Earnings Call for the period ended February 28, 2026. I'm happy to be here on my first earnings call and pleased to be joined this morning by President and CEO, Joe Scalzo; and Chris Bealer, Chief Financial Officer. A copy of our earnings release and accompanying presentation is available on the Investors section of the company's website at thesimplygoodfoodscompany.com. This call is being webcast, and an archive of today's remarks will be made available. During the course of today's call, management will make forward-looking statements, which are subject to various risks and uncertainties that may cause actual results to differ materially.
The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. On today's call, we refer to certain non-GAAP financial measures that we believe provide useful information for investors. Due to the company's asset-light business model, we evaluate our performance on an adjusted basis as it relates to EBITDA and diluted EPS. Please refer to today's press release for a reconciliation of non-GAAP financial measures to their most comparable measures prepared in accordance with GAAP.
Finally, all retail takeaway data included in our discussion today, unless otherwise noted, reflects the combination of Circana's MULO++C measured retail channel data and company estimates for unmeasured channels for the 13 weeks ended February 28, 2026, as compared with the prior year.
With that, I'll now turn the call over to Joe Scalzo.
Thanks, Matt, and welcome to the company. Good morning, everyone. Thank you for joining us today. For those of you that I know, it's nice to be back, and I look forward to getting to know all the new faces. I wanted to begin this morning's call by providing a framing for where Simply Good Foods is today. It's been 12 weeks since I rejoined the company, and we are not pleased with our performance. We've experienced executional challenges against the dynamic and highly competitive marketplace. .
Our second quarter net sales of $326 million and adjusted EBITDA of $55.5 million were both well below our expectations. Our fiscal year 2026 guidance now calls for net sales in the range of $1.31 billion to $1.35 billion and adjusted EBITDA of $217 million to $225 million. The good news is that we believe we are well positioned to fix this. We know what we need to do, and we are acting with urgency. Our brands speak to unique consumer segments within the category, addressing relevant consumer benefits with differentiated positioning. And, I believe, Simply Good Foods can return to delivering the durable long-term growth that you would expect from a leading nutrition company.
With that perspective, I'll turn the call over to Chris, who will provide more details on this quarter's results and our updated outlook for the year. After Chris is finished, I'll return to discuss how we plan to get our performance back on track. Chris?
Thanks, Joe. Good morning, everyone. As Joe mentioned, we are disappointed with our Q2 performance as our retail takeaway slowed significantly compared to Q1, especially in the second half of the quarter as we entered the new year, new you promotional period declining 6.4% year-over-year. Quest consumption grew 2.4% as bars were impacted by softer baseline velocities. Salty grew 14% in the quarter, although this represented a deceleration from Q1. OWYN consumption was down 2.4%, below our expectations due to lapping a heavy promotional period in the prior year and poor base velocities, including our newly expanded distribution.
This poor performance will result in lost distribution in the coming months. Atkins consumption declined by 23.4%, driven by known distribution losses and related trade inventory reductions, both of which were roughly in line with our expectations. Specifically, we reported second quarter net sales of $326 million, which declined 9.4% versus the prior year, mainly due to weaker consumption.
Adjusted EBITDA was $55.5 million, a decline of 18.4% year-over-year. Gross profit of $103 million decreased 20.8% versus the prior year driven by inflationary costs, most notably cocoa, whey and tariffs. Gross margin was 31.6%, a decline of 460 basis points versus prior year, largely reflecting higher input costs and some onetime effects from actions taken to mitigate OWYN product quality issues. Excluding $3.9 million of onetime OWYN integration expenses in the current year period, and a $0.4 million noncash inventory purchase accounting step-up adjustment expense related to the OWYN acquisition that occurred in the same period last year, gross margin was 32.8%, a 350 basis point decline versus the same period last year.
Selling and marketing expenses of $28.2 million were down 19.7% versus prior year, primarily the result of the previously planned pullback in Atkins marketing. G&A expenses of $34.9 million decreased 3.2% versus the prior year period. Excluding for the current period, $4.5 million in restructuring costs, integration expenses of $0.8 million and term loan transaction fees of $0.2 million, for the prior year period integration expenses of $2 million and term loan transaction fees of $0.7 million, G&A declined 12% to $29.3 million, mainly due to a reduction in our short-term incentive accrual.
It is worth noting that given the management transition, we increased our focus on controlling G&A costs earlier this quarter. I'll speak to this in more detail in a moment. On a GAAP basis, we had an operating loss of $213.3 million compared to income from operations of $54.7 million last year due to a noncash loss on impairment of $249 million related to the OWYN and Atkins brand assets. Net interest expense was $5 million, while the effective tax rate was 26.8%. Net loss was $159.7 million, down from net income of $36.7 million last year, primarily due to the impairment noted in moments ago.
Moving to the balance sheet and cash flows. As of the end of Q2, the company had cash of $107.4 million and an outstanding principal balance on its term loan of $400 million bringing our net debt to trailing 12-month adjusted EBITDA to approximately 1.2x. The company bought back almost 5 million shares in the second quarter. We have spent approximately $240 million repurchasing over 10% of our outstanding common stock over the past 12 months, including approximately $190 million this fiscal year.
As of April 9, 2026, the company has approximately $182 million remaining under its current share repurchase authorization. Year-to-date cash flow from operations was $58.2 million compared to $63.3 million last year. Capital expenditure was $7.6 million, reflecting the investment to support additional capacity in our salty snacks business that we previously discussed. This month, we kicked off a major initiative to reduce total fixed costs in our company.
The objective of this work is in G&A structure by reducing stuffing while increasing functional excellence in key areas, realigning our use of external agencies and brokers and increasing efficiency in our manufacturing and logistics approaches. As a result of this effort, we will improve the shape of our P&L to provide improved profitability and generate fuel for increased brand investment. We expect the total onetime cost of these initiatives to be approximately $15 million which includes costs already incurred in the CEO transition.
Finally, moving to our updated outlook, we now expect the following. Fiscal year 2026 net sales are now expected in the range of $1.31 billion to $1.35 billion, representing a decline of between 10% and 7%, respectively. This assumes weaker consumption trends and expected distribution losses. GAAP gross margins are now expected to decline in the range of 300 to 350 basis points. This is a result of slightly higher input costs, especially way cost of mitigating the OWYN product quality issue and a slight delay in realized cost savings due to lower volumes.
We continue to expect sequential improvement in the rate of year-over-year gross margin change, including Q4 margin expansion. We plan to hold marketing spend at planned levels to strengthen our brand equities and drive consumption. Our expectations for G&A include the partial year benefit from the major initiative previously noted to reduce fixed cost in the company. Fiscal year 2026 adjusted EBITDA is now expected in the range of $217 million to $225 million representing a year-over-year decline of 22% to 19%, respectively. We continue to expect our full year effective tax rate to be roughly 25%.
Our expectations on interest expense and capital expenditures remain unchanged. Given shares repurchased year-to-date, the company expects a weighted average diluted share count of approximately 92 million shares outstanding. As it relates to the third quarter, we expect net sales in the range of $328 million to $339 million, which represents a decline of 14% to 11% versus prior year. This incorporates assumption level similar to what we experienced in the second quarter.
We expect adjusted EBITDA in the range of $46 million to $50 million, representing a year-over-year decline of 38% to 32% as we hold marketing investment in line with plan. Finally, I would note that our outlook assumes current economic conditions, consumer purchasing behavior and prevailing tariff rates will remain generally consistent across the company's full year.
I will now pass the call back to Joe.
Thanks, Chris. Let me reiterate where I began today's call. We are not satisfied with our current performance. We see a clear opportunity to improve our choices and our execution across the business. While we leave the long-term fundamentals of our category, our portfolio and our company capabilities are compelling, our recent results have not met our expectations, and we are taking immediate and fundamental actions to turn around both our financial and in-market performance. .
Before I talk about our plans, let me step back and tell you why I remain optimistic and energized about the growth opportunities for our business. First, we compete in a trend-right consumer category that continues to show solid growth even as much of the broader food and beverage industry has experienced pressure. From a U.S. household perspective, the purposeful nutrition category still has significant room to expand with meaningful runway for continued growth. The category also continues to benefit from powerful consumer tailwinds, health, wellness, use of protein and the increasing role of convenience snacking and meal replacement in consumers' daily routines. Importantly, it also remains a predominantly branded category with limited private label, which reflects the pace of innovation required to compete successfully.
This category backdrop will always attract new entries and we've seen some targeted directly at our business recently. With that said, we have competed effectively through this type of activity in the past, and we'll do so again moving forward. At the same time, the broader food and beverage landscape is impacted by the growing adoption of GLP-1 medications. While these therapies are changing how some consumers approach eating, they are also reinforcing the importance of nutrient-dense foods, particularly those high in protein and low in carbs and sugar as consumers focus on maintaining muscle mass and overall nutrition balance in a lower calorie environment.
We believe these trends remain highly consistent with the nutritional principles that underpin our brands. From a customer perspective, both brick-and-mortar and online retailers continue to view our category as a growth category and remain committed to allocating space and resources to capture that growth. We believe Simply Good Foods has a strong portfolio of consumer brands, each brand speaks to a unique consumer segment addresses different benefits with differentiated positioning and preferred products. And third, we built a best-in-class company. We have developed strong capabilities in marketing, sales and R&D that enable us to drive innovation and profitable growth. In addition, our asset-light manufacturing and distribution network remains an enviable operating model that provides flexibility, scale and high free cash flow for investment.
Importantly, we also have significant retail scale within the category aisle and serve as a category adviser to many of our largest retail customers. However, it's clear that our performance has not reflected the strength of our company or the potential of our brands. Strategy shifted, priorities were not always clear and execution did not consistently meet the standard required to compete at a time when competitive activity was increasing, particularly on bars. As a result, we made some strategic choices that ultimately weakened our performance and limited our ability to fully capitalize on the opportunities in front of us.
Since returning to the role I have focused on taking a clear-eyed assessment of the business to ensure that we have the discipline, the consistency and the operational excellence required to compete and win. This work is already well underway, and we are acting with a sense of urgency. Before moving to our portfolio, I believe it's worth stepping back and highlighting a few structural issues within the business that have contributed to our recent performance.
Over the past several years, we've experienced erosion in overall household fundamentals across the portfolio. In a category like ours, growth ultimately depends on continually recruiting new consumers into our brands while growing loyalty and buy rate. Consumer recruitment requires the proper economic structure in the business. For us, this was characterized by gross margins approaching 40%, with sustained marketing investment around 10% of sales, and adjusted EBITDA margins approaching 20%. The shape of our P&L has moved far in this ideal structure with gross margins in the middle 30s, reductions in marketing spend as a percent of sales and G&A dollars growing faster than underlying business.
As a result, our ability to consistently invest behind our brands has been constrained which has ultimately led to slower household penetration growth, declining buy rate and pressure on brand performance. To succeed, we will address these structural issues. Our turnaround beliefs moving forward are clear. We will relentlessly act in efficiency in our supply chain. We will use pricing action as necessary to help offset cost inflation over time. We will be less reliant on price promotion. We will lower our fixed overhead structure while improving key areas of functional expertise. We will restore more consistent investment behind our brands. We'll focus more of our brand innovation on the core business with bigger consumer-driven ideas. And we will use ROI to evaluate the effectiveness of every marketing investment.
We believe turning these concepts into actionable plans will lead to improvement in our economic structure. The good news here is that we've already started that work. We have built capacity in our supply chain and R&D organizations to systematically improve efficiency, attack cost and lower our total cost of delivered goods. You will see that play out as we close out this fiscal year and move through fiscal year 2027. We've already identified low returning customer spend and are targeting its elimination in fiscal 2027 to reduce our reliance in that area and rebalance our consumer and customer investments.
We will assess the use of pricing to regain the gross margin we lost to inflation over time. Lastly, as Chris mentioned earlier, we have a major initiative underway to immediately reduce our fixed cost structure. Specifically, we are taking aggressive actions to lower our G&A investments. When completed by the end of this fiscal year, we'll have an organization that is the right size with the right capabilities to compete and win.
With that broader context in mind, let me now turn to our brand portfolio and the role we believe each brand plays in our strategy moving forward. I'll start with Quest, a $1 billion retail brand, the most important brand in our portfolio and the primary driver of our long-term growth. We believe Quest remains one of the most differentiated brands in the entire category with significant growth runway ahead. We bought Quest in 2020, confident that it will become a huge success given the strength of its core promise.
Quest has built its position by delivering a unique combination of great taste and highly differentiated nutrition profile. Since its founding, the brand is focused on using high-quality dairy-based proteins that provide the full spectrum of essential amino acids while avoiding ingredients that can cause blood sugar spikes. That positioning has resonated with a broad range of consumers that has helped Quest build strong loyalty and equity. Solid growth in household penetration has continued for Quest.
However, recently, we've experienced a slowdown in buy rate, partially due to elevated competitive activity, which has resulted in slowing consumption on the brand. At the core of the Quest franchise are 2 key product platforms: bars and chips. Together, these products represent the foundation of the brand and approximately 80% of sales. They continue to resonate strongly with consumers seeking convenient high-protein snacks. Quest Chips remains an important and growing part of the brand, continuing to perform well as consumers increasingly look for better-for-you alternatives to traditional salty snacks.
Chips continue to drive household penetration rates for Quest, which are now for 19% of U.S. households. Going forward, we'll continue to innovate products and invest in marketing to drive chip awareness, consideration and trial. While the performance of chips has remained strong, consumption of Quest Bars has weakened in recent periods, resulting in a slowing of the brand's overall buy rate. A significant factor in the slowdown is the result of our investments in other parts of our portfolio beyond chips, which haven't met our expectations at a time when competitive activity in core categories has increased.
Given the scale and strategic importance of Quest to our company, reaccelerating growth in the Bar business will be one of our highest priorities moving forward. Our focus will be on strengthening core Bar velocities, ensuring our innovation pipeline is aligned to consumer preferences and supporting Bars through a more competitive communication, driven by continuing the level of marketing investment required to recruit new consumers and drive buy rate. Reaccelerating growth in Quest Bars, while continuing to scale the momentum we're experiencing in Quest Chips is central to unlocking the full growth potential of the brand.
Turning to Atkins. The brand has played a foundational role in the history of Simply Good Foods and many ways represents the origin of the company. This brand traces its roots back to Dr. Robert Atkins who's worked decades ago, helped introduce millions of consumers with the concept of managing carbohydrates to support healthier eating and weight management. His philosophy ultimately formed the foundation of the Atkins brand and the broader low-carb nutritional health movement that many consumers continue to follow today. For many years, Atkins was the primary engine of growth for the business. And during my previous tenure, we worked to reposition the brand from a programmatic diet into a broader weight management lifestyle brand focused on helping consumers manage carbohydrates while still enjoying great tasting foods.
During that time, Atkins grew for over a decade by recruiting consumers to the low-carb lifestyle. Over time, however, a combination of factors attributed to the brand's recent decline. As gross margins came under pressure, the level of marketing support behind the brand declined. It is worth noting that marketing investment in Atkins historically generated among the highest returns in the company. So reducing investment negatively affected net sales and consumer recruitment. In addition, consumer messaging around the brand became less consistent and strayed from the core weight management proposition that historically resonated so strong with consumers.
As marketing support declined and consumer messaging became less focused, our ability to consistently recruit new users into the brand weakened, which ultimately led to slower velocities and pressure on retail distribution. Given these factors, we expect Atkins will continue to decline in the near term, largely due to anticipated retail distribution losses as shelf sets continue to evolve in the category.
Moving forward, our focus is on resetting the retail baseline of the business to a viable core assortment. Encouragingly, several of our important retail partners continue to view Atkins as a highly relevant brand with a substantial loyal group of heavy buyers. We also believe there is a meaningful role for Atkins with consumers who increasingly choose GLP-1s to lose weight. While the baseline is reset at retail, we'll take a thoughtful, fact-based approach to repositioning the brand and evaluating future investments to drive profitable growth and will assess our ability to grow the consumer base once again.
Let me now turn to OWYN. OWYN was founded in 2017 by former professional athletes, Kathryn Moos and Jeff Mroz, who set out to create a plant-based shake brand focused on clean, allergen-friendly nutrition with transparent ingredient sourcing. The brand quickly developed a strong following among consumers seeking plant-based alternatives with simple, recognizable ingredients. We acquired the brand in June of 2024 believing it provided an attractive entry point into the rapidly expanding plant-based and clean label protein segment.
Importantly, the acquisition allowed us to expand our reach to a new consumer segment within our category while adding a third differentiated brand to the portfolio. OWYN's product lineup today consists of plant-based ready-to-drink protein shakes and powders designed to deliver functional nutrition with clean label ingredients. OWYN's household penetration remains relatively small at 4.4%, which highlights the runway for future growth among existing plant protein consumers.
Our recent segmentation work indicates that approximately 18% of U.S. households are actively seeking functional nutritional benefits such as plant-based protein and clean label ingredients and are willing to compromise something on taste to obtain those benefits. This represents a large and growing consumer segment that align closely with OWYN's positioning and products. While the growth opportunity with OWYN is compelling, we did not meet our own expectations with the integration of the brand into our company.
As a result, we lost some important brand expertise. Our marketplace execution was poor and our brand performance fell well short of our plans. During the past year, we significantly amended the distribution of OWYN's Pro Elite 32-gram protein shake, which was our entry into the high protein segment of ready-to-drink. Our belief was that we could accelerate the recruitment of plant-based interest to consumers with a higher protein product and in doing so, accelerate the brand's growth. However, a combination of a product quality issue on that product that impacted taste, texture and consumer acceptance and poor marketing execution negatively impacted performance during the critical expansion window.
While the product quality issue has been addressed, the retail performance of Pro Elite as well as of a number of line extensions did not meet retail velocity expectations, and we expect some near-term distribution losses over the next year. Given the interest in plant-based protein and the strong brand equity in OWYN, we believe that we will restore growth to OWYN once the near-term reset is behind us. Looking ahead, we'll refocus on the OWYN winning playbook, which includes marketing to drive awareness, consideration and trial and pacing distribution expansion of our core products in a disciplined manner to ensure strong velocities and sustainable growth for the brand over time.
In summary, the role of each brand in our portfolio is as follows: Quest is our growth engine, and our largest, most important brand. We will invest for growth and refocus on its unique protein forward brand promise of athlete worthy nutrition behind its core products of bars and chip. Atkins is the leading weight management brand and our second largest business. We will reset its retail product assortment with customers in line with its smaller yet loyal consumer base as we investigate our ability to profitably invest to grow its consumer households in the future.
And lastly, OWYN is our entry into clean plant-based protein. After distribution reset, we will restart its marketing and targeting plant-based protein seekers in our great tasting, ready-to-drink shakes and powders. We will pace our distribution growth in line with household growth.
As I look ahead, it's clear to me that our mindset must be on turning around company performance. The category remains strong. Our brands retain meaningful consumer equity and we are acting with urgency to unlock their full potential. In summary, my focus going forward will be on 3 turnaround priorities. First, we must strengthen the economic model of the business, pricing and cost reduction; second, ensuring consistency and discipline in our choices, working on fewer, bigger initiatives so that the organization can execute with clarity, focus and urgency driving the portfolio strategy I just discussed; and third, rebuilding investment in our brands behind superior consumer insights and marketing execution to expand household penetration, while ensuring we allocate investments with the strongest return.
I rejoined the company because I strongly believe in the prospects of this business. I'm fortunate to have a motivated organization and an active engaged Board that is supportive of the steps I'm taking. We collectively believe Simply Good Foods as a very great future.
And with that, we're open to answering your questions. Operator?
[Operator Instructions] Our first question comes from the line of Matt Smith with Stifel.
2. Question Answer
Joe, you outlined the strategic priorities, including addressing the cost structure. When you look at the business today, are there structural reasons why the aspirational financial structure is no longer the right benchmark? You called out previously looking for gross margins approaching 40%. There's been inflation that likely damps that down a bit. But is the goal to drive gross margins higher to fund the marketing investment into that upper 30s range?
Yes, Matt, I think just in the prepared remarks I just made, I think part of our fundamental issue on our business is that all the household metrics on our -- all of our brands are moving in the wrong direction. I believe that's based upon some of the strategic choices that we've made and the investments that -- the decline in investments that we've made as a total company and within each of the brands. So I think rebuilding the financial structure of the business is paramount to getting back to investing in our brands to improve our household metrics. Yes.
And then as a follow-up, when you think about the phasing of the cost structure opportunity, are you expecting to make progress into -- heading into fiscal '27? Or does addressing the non-marketing SG&A opportunity, is that pushed out further and required to fund the marketing investment you're seeking to restart that household penetration growth?
Yes. So it's a great question. It would be my intent to make progress in 2027 on gross margins, and we've already talked about the improvements that we'll make in our overhead -- fixed overhead structure. I think it will have a lot to do with the size of inflation that's coming at us for '27.
Obviously, if it's more muted, we'll have an opportunity to make better progress. If it's significant, then obviously less progress. So we'll have to balance that. And also, we hinted in our prepared comments, we've also increased the amount of price promotion in our business, which we believe has core return and sends a poor message to consumers about our brand. So part of our ability to make improvements there is reducing our reliance on that price promotion, which frees up dollars for us, gets us rebalanced from a customer investment, consumer investment back in the right direction. So expect us to use all levers.
Exactly how it plays out in '27 will have a lot to do with what's coming at us from an inflation standpoint. As you know, that environment just is pretty uncertain at this point. So we'll be doing a lot of work between now and the end of this fiscal year to better understand that and build plans around it. Thanks for the question.
Our next question comes from the line of Megan Clapp with Morgan Stanley.
Maybe just a couple of follow-ups there. So maybe getting a little bit more into the details. So in the slides, you did reiterate that long-term algos of 4% to 6% top line growth and EBITDA margins approaching 20%. And this is even as you called out in your remarks, just a more competitive environment. And then you took an impairment charge in the quarter, again on Atkins and now one on OWYN.
So just trying to kind of reconcile all of that. And maybe, Joe, you can just spend a little bit more unpacking what specifically underpins your confidence in kind of getting back to that level of growth at that margin structure and how we should be thinking about the contribution from each brand within that framework going forward, understanding, as you mentioned, it will take time.
That is a loaded question. Maybe if I can unpack it a little bit. -- why am I confident in our ability to rebuild our financials and grow the business. As I said on the outset, first, we compete in a really good category. While center of store is struggling for growth, we're in a category that's growing, continues to grow, has a history of growth and is branded. So I feel like we're in a good category. And part of the challenge is the choices that we make going forward are important. So I would say, first of all, good category.
Second, I inherit just a terrific company. We have capability broadly and deeply in this organization, pretty much in every function. And in my earliest days here, -- they are driven to work well together to cross-functionally execute well, and they're committed to excellence. So for us, it then just comes down to our choices, the choices that we make and how well we execute against those choices. I like the portfolio of brands that we have. So I like Quest as our key brand and key growth driver.
I think Atkins, while we've made some mistakes with it, is uniquely positioned to capture growth around the emerging use of GLP-1s. And OWYN, I think the acquisition of OWYN was a smart one, right? I love the plant-based protein space. I love the brand. I love the runway. We just got to execute better. So I'm relatively confident that we've got the right portfolio. We've got the right company, and we're in a good category. It's about the choices that we make, fewer, bigger ideas that we work on, get focused back on the fundamentals and start executing better. So that's why I'm confident.
What I would say is confident in our ability to improve there. Exactly how that plays out, what growth I can get from each of the brands over time, that's still work that we've got to do and we got to figure out over time. But I'm confident we'll get to the financial profile we talked about, and we'll get back to that algorithm. It's just there's going to be some resetting that's going to take place just based upon some of the decisions we've made in the past. And once we get that behind us, we'll get this company back on track.
Okay. And then maybe a follow-up for Chris. So the back half, I think 3Q implies kind of mid-teens EBITDA margins and then stepping up to closer to high teens in the fourth quarter. So 2 parts. Can you just walk us through kind of the primary drivers of that step-up, part one? And then secondly, is that 4Q level kind of a reasonable run rate to think about as we look ahead? Just again, trying to reconcile with some of the comments that the turnaround will take time, you've got some investments you clearly want to make. You also have expectations for cost savings and efficiency coming in '27 and hopefully, some cocoa recovery, too. So just trying to understand the puts and takes.
Yes. Thanks. So first of all, as we've talked about on previous calls, we have a relatively backloaded year on several aspects, right? One, we took a price increase in Q1. That's flowing through, obviously, in Q2, that's going to continue flowing through the rest of the year. We have pretty aggressive productivity program, which, again, we just started. That's been ramping all year. That gets into full swing by Q4.
One of the elements that we did talk about in the prepared remarks is the slight reduction on total productivity driven by the lower volumes. That's really driven by the fact that the inventory flow-through is just not going to come through as much as we expected, but still significantly driving savings year-over-year. And then finally, we have -- as we talked about again in the prepared remarks, the fixed cost reduction program Joe just mentioned, is already underway, and we will have the first quarter of savings on G&A coming through in Q4. So that's also helping on the EBITDA level.
Our next question comes from the line of Robert Moskow with TD Cowen.
Chris, I wanted to dive into those -- some of those tailwinds a little bit more. I think we all thought there was a pretty substantial cocoa cost deflation benefit that was coming your way maybe as soon as fourth quarter and then into fiscal '27. Can we kind of isolate that? Like it must be even bigger than you thought. And then the second question would be the G&A in fourth quarter, what percent of sales do you think is the right number for us to kind of plug in here? It's been as low as 9%, I think, in the past, and now it's well -- it's above 11%. So what do you -- where is the right level for us?
Yes. Thanks, Rob. Let me go through the first question on cocoa. So cocoa hasn't appreciably changed since the last call. So we're still expecting cocoa savings to start flowing through in Q4. We have actually whey -- one of our biggest commodity increases that we've seen since the last call is the cost of whey has gone up significantly. That's actually partially offsetting the cocoa savings. So I'm not sure if I fully understood your question on gross margin. But cocoa is not really that much changed.
Again, just to remind, we do log cocoa forward. So to some extent, the best savings on cocoa are going to come in '27. But whey is something we aren't able to lock forward just because of the nature of that commodity. And that commodity has been running up, frankly, all fiscal year, but especially in Q2. So that one is actually driving a little bit of adversity on cost.
From a G&A perspective, we are going to have the first quarter savings on G&A. There's obviously some puts and takes, but somewhere in the 10% range is probably a reasonable go-forward assumption. And we'll give a lot more detail on that when we get to -- obviously get to F '27. But when you see the Q4 P&L, that will be a pretty good baseline just as a starting point.
Yes, Rob, just to follow up on that. So whey as a market right now, we use whey protein isolate, protein concentrate and milk isolate. They're at historic highs right now, and there's a lot of pressure in that marketplace. So as we move through the second half of this year and into fiscal '27, we're expecting a fair amount of pressure on our protein structure at least over the foreseeable future.
Now will that market stay at the historic highs? Really hard to know at this point. And what does '27 total inflation look like, we're still forming that picture. Clearly, cocoa relative year-on-year is going to be a favorability, but there are some other things coming at us that are, frankly, headwinds. So we'll be working on those as we figure out our plans for next year.
Okay. And Joe, this kind of leads to the follow-up here is you talked about price increases being part of the strategy. But you also talked a lot about weaker velocities, losing some distribution with retail and then competition. So are the brands healthy enough for more price increases at this time? And where do you see the bigger opportunities to do it?
Yes. I believe a lot of our performance are the choices that we've made and the quality of the execution that we've delivered has a lot to do with our performance. So I've always been Rob, a believer that 10% of this is what happens to you, 90% of it is what you do about it. So I think I'm going to focus on the 90%. I do believe our brands are valuable. I do believe that we will have to price and can price and have that ability to our most recent price increases, elasticities have been kind of what we expected.
So if I'm -- if we continue to see inflation, you would expect us to use all the levers available to us to more than cover that inflation and use marketing to invest back in the business. If you look at the fundamental metrics around brand health, that's households. So are we growing households, are we growing buy rate, all those metrics on our brands have been deteriorating as we moved through the last 26 weeks, which is not a good place to be, which says we need to make better choices, we need to make better investments and we need to execute better. That's what we intend to do.
Our next question comes from the line of Steve Powers with Deutsche Bank.
Joe, I wanted to focus on the slowing base velocity within Quest chips and bars and maybe get a better sense for your root cause diagnosis on each because my sense is there maybe a little bit of nuance and differential between the 2. Just kind of what you're seeing as the main driver or drivers and how that informs your plans to reaccelerate that? .
Yes, Quest starts with at the highest level for the brand, right, are we focused on the right things for Quest. So 80% of the business is chips and bars, are we using a preponderance of our marketing investment against those forms. I think that's the first place to be. And my assessment would be no, not. So you're going to see a refocusing of our efforts against the core of the business.
The second thing is I think you then start looking at every element of the marketing mix. You look at the positioning of the brand overall. So how we've been positioning the brand, is it best positioned to compete in the category. So we've talked a little bit about bar competition. I don't think the positioning of our brand right now best positions us to compete. So we have a belief that our brand has the best nutritionals in the category. It was characterized by athlete-worthy nutrition. So these are products that athletes would use, they're that good, and you don't have to compromise with taste.
You will see us go back to that positioning which I believe is harder hitting than where we've been before. And then lastly, expect innovation, fewer, bigger ideas and innovation in the core, right? I think we've been focused more on distribution growth, quantity of ideas or quality of ideas. And we're going to get back to fewer, better consumer insight, execute well against it and deliver better household metrics as part of that. So the focus there is -- it starts with the fundamentals, where is our business. It's in chips and bars, where are we competitively advantaged? Are we talking about that?
And is our innovation and execution, good enough, on target enough, competitive enough to compete. So you should expect that from us from Quest. And this is a brand if you just step back, this is really the only brand in the category other than Atkins that's multiform, right? We're in a soft business and we're in a bar business. those brands don't exist. And the reason that it exists for Quest is because the brand promise is bigger than it's particular for, right? If you take a look at most bars, they're just bars. If you take a look at shakes, they're just shakes, right? Quest is a promise that transcends form, which means we have something if we just start leveraging it stronger going forward. I intend to do that.
Okay. Makes sense. And then maybe as a follow-up to Rob's question on pricing. You had also alluded earlier to maybe an over reliance on promotional intensity. I guess, to what extent do you see sort of the first wave of pricing opportunity to be actual specified price taking versus just a toggle unwise promotional intensity? .
Look, I think we've been absorbing pricing net of cost in our business. We've been absorbing costs now for a while without covering it in pricing. A branded business can't stay in that position. So we have a justification to take pricing in front of us right now. But the question for me is what's going to come at us next year? And if I think between reducing price promotion, increasing pricing, how much of that can I do in any 1 year, just based on the current situation. But expect us to use every lever here, right? You can't -- we can't sit in the mid-30s in gross margin and believe we've got a branded business that we can differentiate and drive household metrics, positive household metrics on.
So expect us to be more aggressive in that area, exactly how the plans play out, we'll have a lot to do with the external environment and what's going to happen from a cost inflation standpoint. Look, we also live in a -- we live in a time now in the last 2.5, 3 years, that there's constant inflation, right? So pricing has to be a core capability of your organization, your ability to get pricing, cold pricing and then manage elasticities. So -- and this organization is has that ability. It had that ability when I was here last time. It does have that ability. So we just have to leverage that muscle.
Our next question comes from the line of James Salera with Stephens Inc.
Joe, I wanted to start maybe a little bit of a -- high-level takeaway since you're coming back to the company, but have a lot of experience with these brands. I think the view previously from investors is that question, OWYN would bolster results while you got Atkins back into fighting shape, but based on some of the commentary today, it seems like there's more work to be done really across the whole portfolio. How do you think about allocating resources across the different brands? And do you have the bandwidth to go deep with multiple brands at the same time? Or should we expect fix Quest, then fix OWYN and then kind of like a rolling effort? .
Yes, it's a good question. It's one of those questions you don't know until you get into it, you start actually doing it. What I would tell you is we got to reset happening on OWYN. We talked in our prepared remarks about executional issues over the last, call it, 6-plus months. There's a reset coming on OWYN, but it's well positioned. I think plant-based protein is a really strong consumer-centric idea. I think once we get through their distribution reset on OWYN, we got to rebuild some margins in that business and we need to invest and grow. And I feel pretty comfortable that we can do that.
It's our smallest brand. So it's probably not going to contribute beside what we can get out of Quest. Quest is a business that I think just requires focus that we've just been -- we spread our -- I think we spread our attention too broadly. So I think in Quest, you get back into -- if I can -- we've always believed about Quest, you got to be growing bars. That has to be the core of the business. You have to grow bars. Once you grow bars, everything else you do is incremental. So we got to get back.
We lost a little of that. We got to get back to that mindset, and I'm very, very confident. Look, we have the best nutritional bars in the category. We just have to be on the patch about talking about that. So I think Quest is -- we can get Quest on the right track just based on the choices that we're making. And then Atkins, I probably understand that brand better than anyone in a -- we've got a -- we have been -- we've seen eroding gross margin, which has led to less marketing investment. And this is a business that has been all about marketing investment to grow the size of the brand franchise, more people in it.
As you -- as gross margins eroded, we cut marketing support and shrunk the household size, which has led to lower velocities on shelf, which we're now having to sort through. I do believe this is a brand that's ideally positioned to address GLP-1 users. We'll come back and talk to you about that. But we got to prove our way there, right? We've got to get to a core assortment. There's still a decent size number of consumers buying Atkins. We said in the prepared remarks, major retailers believe this is an important brand. And once we get it kind of resized at retail, we're then going to go start testing our way to what's the insight around GLP-1s? Is there a difference in the products' characteristics based upon what we see.
So are there different products that we might launch in that area. And then can we prove our way to growing household penetration again. I tend to be optimistic there, but I'm also show me. So we're going to go figure that out. And the simplest metric is I'm a big believer of return on investment. I'm a big believer in measure in it. The business, the brand, the ideas that give us the best return is where I'm going to put money first, and then we'll kind of go from there.
As a follow-up to some of your commentary on the marketing component, in particular, in the prepared remarks, you guys talked about kind of ideal marketing around 10 for sales. But since it's stepped below that, and there's a lot of noise in the space with other competitors and upstart brands, should we think about marketing spend in the near term, however you want to find that 6 months, 18 months, whatever as stepping up above that 10% of sales level given the sales declines and the need to maybe boost the relevancy or should we think of that 10% as a ceiling on the spend? .
I think you should be thinking about 10% at this point as the ceiling until we prove that there's ROI justifying more. And then again, I believe that it's more about our choices than it is about competition. I would tell you in this category, if I've learned anything, there is a large percentage of variety seeking protein years. These brands come and go. I've seen probably 3 cycles of them. I'm worried less about the individual brands, more about the choices that we make in those environments and making sure we're supporting our brands in the right way. So it's -- I think it's, again, more about how we think about our brands in that context than it is what competition is doing.
Our next question comes from the line of Alexia Howard with Bernstein.
Can I start by just asking about the guidance for the second half and what it implies the sales growth by brand. I mean if we assume that Atkins is still down mid-20s, then the guidance you provided suggests that both Quest and OWYN could be down mid- to high single digits. Is that the way we should think about this? And what -- if so, what's driving that? Because both brands had retail takeaway that were comfortably double-digit last quarter. I know that you've got the distribution losses at OWYN, maybe that's a big piece of it. Is it extra competition from pets Dorito's protein shakes launch that may be causing some more pressure on the Quest side, just trying to understand what's going on with the sales outlook and what that implies for F '27 and beyond. .
Thanks for the question, Alexia. As we said in the prepared remarks, we've taken a really strong look at the Q2 consumption, the drivers, the details by brand, and we've reflected those trends into our second half outlook. The one piece I would add on top of that, which you mentioned is the -- we are facing some OWYN distribution losses, primarily some that we've recently gained where the velocities didn't meet the hurdle rates. So those are the main drivers within the second half. It's really updating based on Q2 results and the trends that we were expecting on distribution for OWYN.
And then are you able to quantify how much brand investment you're adding into the second half investment versus what you were -- what the previous management team was initially expecting? .
What we said again on the prepared remarks is that we were holding the full year for the original planned amount. So on a full year basis, it's the same as we'd originally planned, even despite the sales declines that we've seen.
Our next question comes from the line of John Baumgartner with Mizuho Securities.
Maybe first off for Joe. Just coming back to Atkins and your reset of the fundamentals. You touched on the alignment with GLP-1. And I'm curious, based on what you see now internally looking at external competition, how would you compare and contrast making this alignment with GLP-1 with the prior repositioning of the brand from weight management into low carb below sugar 15 years ago. .
That's a good question, John. Look, it's clear the category has changed. In fact, food has changed from these GLP-1 medications, right? So as you -- how do you think about your brands, how you think about position and how you think about innovation has to change. I think, as we said in our prepared remarks, there are people that are on these medications, in particular, the people that are on them for weight management, you have to be very thoughtful about the products that we offer folks in who are on these medications because frankly, they don't eat that many calories, call it, 1,100 to 1,200 calories a day.
So nutrient dense becomes an important quality for the things that people need to eat, and that's well positioned for our portfolio. So I think ideally relative to rest of food and beverage, our category is well positioned for GLP-1s. I think the work ahead is, in particular, in a brand like Atkins, which is all about weight management, the presence of GLP-1s are positive because people are thinking about weight management. And one of the behaviors that we're seeing on the GLP-1 is the cycling on and off the medications.
So there's points where people are thinking about going on the medication, coming off the medication and then going back on and each one of a moment where they're open to a message. So our message has to be relevant at that point. So we're still doing some work around it. We did some principal research around the medications. On the last call, we talked a little bit about some of the claims that we can actually make on the clinical that we've done, we're still doing a little bit of work as it pertains to Atkins. As that work progresses, we'll come back to you and talk to you a little bit more about that.
But the work right now on Atkins is get the shelf reset appropriate for the size of the business today, rebuild gross margins and investigate positionings relative to the GLP-1s and by the time we're ready to test some ideas, we'll be able to talk to you about some of the insights. I think it's an exciting time, quite frankly. And so it's because it comes down to ideas and positioning, and I think that's an area of strength of this organization. So I can't wait to talk about it in the future.
Great. And then Chris, just going back to the staffing reductions in SG&A, just to get a better sense, was there excess of hiring to support revenue that didn't materialize and that now leads to rationalization? Was hiring reasonable but now you have new technology that lets you run leaner versus history? Or is this kind of more of a function of having the same tools, but reducing silos and leveraging folks across all 3 brands. .
Yes, let me address that. I think that as I come back to the organization, the company built some interesting capabilities across all the functions. I think -- so there's not one area, quite frankly, where I say we made a mistake. I think the pacing of the investment was unfortunate in 4 lead times. So I would say we need to get back to and getting to the structure that we want to be at right now, we made some choices on where we had to be excellent from a functional standpoint. We prioritized those choices and deprioritized other areas to get to the right sized organization for the size of our revenue today.
So I would say, going forward, we're kind of in an environment of no overhead growth until we restore revenue and growth back in the business. Once we get to that position, we'll talk about investment in organization capability going forward. Did I answer your question? Does that make sense?
Yes.
Our final question this morning comes from the line of Jon Andersen with William Blair.
Two quick ones. It sounds like you've kind of talked about these baseline resets for Atkins and now OWYN. It sounds like there may be a little bit of one with Quest, even if you're refocusing on the core, I don't know what that means for Bake Shop, some of the other items. But could you give us a sense for how long you think it takes for the reset to play out, this core assortment reset at retail for each of these brands. So we get a little bit of a sense for how that might affect the consumption for them going forward. .
And then second question, maybe more for Chris. You've been buying back stock. And I'm just kind of wondering how you're thinking about capital allocation going forward from here.
Yes, great question. I've been asking that timing question to myself and my crystal ball is kind of cloudy. So I would tell you this, obviously, this fiscal year is going to be a reset year, right? We're going to see walking back, continue walking back distribution on Atkins and we're able to lose some distribution on OWYN as we go forward. As we get closer to '27, I'll be able to give you a better view of how that plays out. But right now, I don't have a strong enough sense of how long the reset is going to take because those are a series of individual retailer decisions that we still have to work through with our sales organization.
Obviously, I want that to happen as quickly as it can happen, but they tend to have their own pacing and their own timing. The good news is we're moving forward on all the strategies that I talked about, choices, execution, focus, effective now, right? So we're already on the path to turning their business and moving in the right direction as a company. The timing, I think, will have a better sense as we talk to you about fiscal '27, which I believe will be in -- which call, October?
Yes.
October's call. So I'll have a better sense in October kind of what the pacing looks like for '27.
And then in terms of the buyback question, as you know, we use the structured framework to assess uses of excess cash. We have leverage just over a turn at the moment. So we still have plenty of capacity. But from an excess cash standpoint, once we've used cash for operational needs, we are going to look at excess cash and uses of that. And we continue to see buybacks as a good option for uses of excess cash. I would just say the level of cash, if you look at our balance sheet at the end of Q2, our level of cash has obviously come down significantly versus where it was at the end of Q1, given the refinancing we did last year. So think about the magnitude that we probably do. But buyback stock is still interesting at these prices, this valuation.
Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Scalzo for any final comments.
Yes. I just want to say thank you for your participation today, for your questions, and I look forward to talking to you all real soon. Have a good day.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
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Simply Good Foods Co — Q2 2026 Earnings Call
Simply Good Foods Co — Q1 2026 Earnings Call
1. Management Discussion
Greetings. Welcome to The Simply Good Foods Company's First Quarter Fiscal Year 2026 Earnings Call.
[Operator Instructions]
Please note, this conference is being recorded. At this time, I'll turn the conference over to Joshua Levine, Vice President, Investor Relations and Treasury. Thank you. You may now begin.
Thank you, operator. Good morning, and welcome to The Simply Good Foods Company's First Quarter Fiscal Year 2026 Earnings Call for the period ended November 29, 2025. The today, Geoff Tanner, President and CEO; and Chris Bealer, CFO, will provide you with an overview of our results, which were provided in our earnings release issued earlier this morning. Our prepared remarks will then be followed by a Q&A session.
A copy of the release and accompanying presentation are available on the Investors section of the company's website at thesimplygoodfoodscompany.com. This call is being webcast, and an archive of today's remarks will be made available. During the course of today's call, management will make forward-looking statements, which are subject to various risks and uncertainties that may cause actual results to differ materially.
The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. On today's call, we will refer to certain non-GAAP financial measures that we believe provide useful information for investors. Due to the company's asset-light business model, we evaluate our performance on an adjusted basis as it relates to EBITDA and diluted EPS. Please refer to today's press release for a reconciliation of our non-GAAP financial measures to their most comparable measures prepared in accordance with GAAP. Finally, all retail takeaway data included in our discussion today, unless otherwise noted, reflects a combination of [indiscernible] MULO++C measured channel data, and the company estimates for unmeasured channels for the 13 weeks ended November 30, 2025, as compared to the prior year.
I will now turn the call over to Geoff Tanner, President and CEO.
Thank you, Josh, and thank you for joining us for our call. I'm pleased with our Q1 performance, and I want to reiterate our confidence in our plan for the balance of the year. As a result, we are reaffirming our full year outlook for net sales and adjusted EBITDA. Consumption in Q1 grew 2%, led by double-digit growth from Quest and OWYN, which combined to generate 71% of our net sales. This was offset by expected declines on Atkins. Quest and OWYN continue to benefit from expanded distribution and marketing with added contribution from recent innovation. Growth was also supported by another robust quarter of the nutritional snacking category, which grew 10%. We are executing well on initiatives to drive the top line and to rebuild our gross margin. Specifically, with respect to our margin, recent pricing actions are now reflected on shelf with elasticities to date, in line with our expectations, albeit data remains limited.
Our robust productivity program, which we started 18 months ago is delivering results taking cost out of the system and ensuring we have a multiyear pipeline of initiatives for the future. These gains, which will be easier to see in the second half once we're past the peak levels of inflation, is a testament to the hard work from everyone in our organization, particularly the supply chain and operations team. Finally, we took advantage of the opportunity to extend supply coverage at attractive year-over-year prices on several key inputs, most notably cocoa, where we have now locked in incremental supply at sequentially more favorable level, which will begin to flow into the P&L late in Q4 and into fiscal 2027.
We know our results for the first half of this fiscal year, for reasons we've discussed previously, are below our longer-term expectations. However, we remain confident that our top and bottom line performance will improve once we get beyond Q2. And as mentioned, we are reaffirming our full year outlook. With this in mind, and with our stock at levels that we believe discounts our long-term growth opportunity, we borrowed an incremental $150 million during the quarter that allowed us to accelerate our share buyback program.
Since the start of the year, we have repurchased over 7% of our common stock. And as you saw in our press release today, the Board authorized a $200 million increase to our existing share repurchase program. Our decision to repurchase our stock reflects our continued confidence in our long-term runway, and we expect to continue with this program as long as the opportunity remains attractive. Simply Good Foods is well positioned as a leader in the nutritional snacking category. The growth is being propelled by the mainstreaming of consumer demand for high-protein, low-sugar and low carb product. We have a strong foundation for sustainable top line growth, which coupled with our history of strong margin and a proven track record of successfully converting a significant percentage of adjusted EBITDA into free cash flow, I believe will create shareholder value for the long term.
Turning to our brand. Quest had another solid quarter, delivering 12% consumption growth and nearly 10% growth in net sales. Key brand metrics are up nicely. Household penetration reached nearly 20% this quarter, up 200 basis points year-over-year and up 50 basis points versus last quarter, a continuation of sequential momentum we've observed for some time. Our salty snacks business once again performed very well in the quarter, with consumption up 40%, reflecting underlying distribution gains and velocity growth as well as somewhat easier year-ago comp when we were supply constrained. As a result, household penetration for Quest Salty surpassed 10% this quarter, up 220 basis points over the last 12 months. Our Salty innovation strategy has been focused on developing and launching a full suite of exciting flavors, which continue to prove highly incremental. This is enabling us to build a highly visible brand block on shelf that enhances our leadership position.
We're also introducing channel-specific packs, helping us attract new households and expand product usage occasions. To put this into perspective, ACV was up nearly 5 points in the quarter versus the prior year, and average items per store were up 34%. With visibility to further distribution gains and strong merchandising ahead, we remain confident and sustained growth for our Salty business. Quest Bars consumption was flat versus the prior year in Q1 with solid results from our Taste [indiscernible] Crispy line and new Overload platform.
As I've said in the past, reaccelerating growth in our Bar business is a critical imperative with Overload just first step. Beginning in the second half, we expect to benefit from several additional initiatives, which are already underway, including further platform innovation and improved in-store activations and merchandising to drive trial. We are hyper-focused on ensuring strong execution of these initiatives and improving performance in this important segment. Lastly, we continue to see solid performance of our new 45-gram Protein Milkshake, which during the quarter gained an additional 8 ACV points. We are gaining trial-focused placements across the store including a number of new opportunities we've secured at several retailers this winter and spring.
In addition, our high protein donut launched this quarter, initially on e-commerce and more recently with a large mass retailer. We expect ACV to ramp in the coming months as more retailers reset their shelves, which will provide us with a better read on performance. As we look ahead in the short term, we have a robust new year new merchandising program in place, including significant off shop displays, both in and outside our aisle.
I want to remind you, as we said last quarter, the consumption growth in Q2, will be below the full year outlook in large part due to business with a key club customer shifting from Q2 focus last year to more balanced across the rest of the year. However, we remain confident that the strong in-store activation and trial driving activity will deliver continued household penetration gains, positioning the brand for a strong second half.
As a result, Quest remains on track to deliver high single-digit consumption growth consistent with our outlook from last quarter. The brand is our largest and highest-margin business, Retailers view us as the innovation leader in the category, which is why we are benefiting from significant distribution and merchandising gains today with line of sight for further expansion in the spring. Finally, we continue to invest heavily in marketing, brand building and new capacity and production capabilities to support ongoing demand.
Shifting to Atkins. Consumption declined 19%, consistent with our outlook. Declines were largely driven by lost distribution at several key retailers, which accounted for 2/3 of the headwind. As we've said previously, we continue to work strategically with our retail partners to find the proper breadth and assortment for the brand and to repurpose space from Atkins tail in favor of incremental gains to more productive Quest and OWYN SKU, all in an effort to get a core assortment with a clear differentiated position in the category focused around weight.
These actions are consistent with our fiscal year outlook for the brand, which continues to call for consumption declines around 20%, driven mostly by distribution losses. Over the last few months, many of our initiatives to modernize the Atkins brand have begun to hit the market. These include introducing a 4-pack within our meal bar portfolio, offering consumers a more attractive industry price point, new packaging across nearly every SKU and updated website and refreshed marketing. Our shift to sharpen our opening price point where the 4-pack in meal bar is doing what was intended with unit velocities on average, up high single digits year-over-year building trial and repeat rates and a 300 basis point increase in the percentage of new buyers added to the brand.
As we are only 1 quarter into this initiative, we will continue to assess the benefits of the lower price point versus the overall revenue that the business generates over time. I would highlight that improved brand health, including new buyers and repeat rate as an important series of KPIs we will monitor and consider as we work to stabilize the business. The core promise of Atkins has always been to help consumers reach and maintain their weight goal backed by science and proven results.
As we continue to see a segment of consumers turn to GLP-1 drugs to help them with their weight loss, we recently completed a pilot clinical study to assess the effectiveness of Atkins for consumers using GLP-1 drug. The study showed several encouraging results, including positive data around muscle mass retention, digestive comfort and certain metabolic markets important to consumers with diabetes.
GLP-1 drugs are clearly a game changer for many people and how they lose weight, and we're excited in the coming months to share more information about our research and to how Atkins nutritional approach can help these consumers achieve their goals.
Moving on. We were pleased to see OWYN's performance in market this quarter with consumption up 18%, benefiting from distribution-led growth for RTDs and powders and an ongoing test in some club stores. Our top penetration was up 100 basis points to 4.5%. In the near term, consistent with our outlook from last quarter, we expect Q2 consumption growth to slow somewhat, due to the impact of initial elasticities following the recent pricing actions, lapping elevated prior year promotional levels and a lingering impact on velocity from the product issues we talked about on our last call.
I'm pleased with our team's effort to address the product quality issue. We've seen our ratings level improve versus the summer helped by our new and improved formula, which has been shipping since August. But we also know we have work to do to rebuild the quality perception with some consumers. As we look ahead, we remain confident in the brand and will leverage the full scale and capabilities of Simply Good to drive growth of the business. This includes leveraging our sales force to sell ACV opportunities, narrowing the gap to leading peers, increasing marketing double digits this year, with marketing as a percentage of sales expected to exceed 10%. Household penetration is only 4.5% and brand awareness is only 20%, [indiscernible] to a significant opportunity for more consumers to discover the brand. And lastly, launching both close in and platform innovation, building upon the brand's strong position and authenticity in the fast-growing clean label movement. To summarize, with only 1 quarter of the year completed, we are reiterating our full year outlook. We are on track and remain confident in our plan.
I want to close by thanking our team. They have attacked marketplace challenges head on with resilience and agility. Our nimble and flexible operating model, short- and long-term growth opportunities for Quest and OWYN and strong margins and balance sheet position us well. We are taking the right actions for the business to enhance our growth vectors and to position the company to win for the long term. I'll now hand the call over to Chris.
Thanks, Geoff. Good morning, everyone. Thank you for joining us.
Overall, we delivered a solid start to the year relative to our plan with net sales and adjusted EBITDA modestly ahead of our expectations. Quest continued to be the engine of growth on the top and bottom line, most notably in Salty snacks with solid execution across the organization as we position the company for improved results in the second half. First quarter reported net sales of $340.2 million were essentially flat versus a year ago. Quest net sales grew nearly 10%, driven by robust consumption growth of 12% while Atkins and OWYN declined 17% and 3%, respectively. For Atkins, while challenged versus prior year, net sales pace slightly ahead of the expectations we provided last quarter as retailer reductions in trade inventory proved less of a headwind than we had expected. On OWYN, Q1 net sales lagged consumption meaningfully driven by lingering product quality issues and the related impact on retailer inventory levels, which began the quarter in an elevated position.
As we enter New Year New [indiscernible], inventory balances are now more aligned for shipments to match consumption. Gross profit of $109.9 million declined 15.8% on a reported basis from the year-ago period, driven primarily by an elevated inflationary costs, most notably cocoa and our first full quarter of tariffs, which were approximately $4 million. Gross margin was 32.3% on a GAAP basis, a decline of 590 basis points versus prior year, largely reflecting higher input costs and about 120 basis points impact from tariffs, which were only partially offset by productivity and mix. Excluding approximately $2.6 million of onetime OWYN integration expenses in the current period, and $1 million of noncash purchase accounting inventory step-up expenses in Q1 of fiscal 2025, gross margin declined 540 basis points to 33.1%.
Selling and marketing expenses of $29.7 million declined 10.1% versus prior year, primarily the result of the planned pullback in Atkins marketing. Quest and OWYN marketing in aggregate increased nearly 10%. G&A expenses of $38 million were flat year-over-year. Excluding stock-based compensation, onetime integration and other costs, including $2.8 million related to the extension and upsizing of our term loan and revolving credit facilities. G&A declined 4.4% to $28.3 million, driven by cost synergies related to the OWYN acquisition and cost management across the organization.
As a result, adjusted EBITDA was $55.6 million, down 20.6% due to the margin pressures I spoke about a moment ago. Net interest expense of $3.8 million was down nearly 50% versus the prior year as a result of lower average debt balances, while the effective tax rate was 25.3%. Net income was $25.3 million, a decline of 34% versus last year due primarily to the aforementioned margin challenges and onetime costs. Diluted earnings per share was $0.26 versus $0.38 in the year ago period. Adjusted diluted earnings per share was $0.39 versus $0.49 in the year-ago period. Please note that we calculate adjusted diluted EPS as adjusted EBITDA less interest income, interest expense and income taxes divided by diluted shares outstanding.
Moving to the balance sheet and cash flow. As of the end of Q1, the company had cash of $194.1 million and an outstanding principal balance on its term loan of $400 million bringing our net debt to trailing 12-month adjusted EBITDA to approximately 0.8x. Cash flow from operations of $50.1 million represented an increase from approximately $32 million last year due to improved working capital. Capital expenditures were approximately $2.1 million. Higher cash and debt balances at quarter-end reflected the company's strategic decision to borrow an additional $150 million as part of the refinancing and extension of our credit facilities, which closed in November.
I would highlight that despite upsizing our credit facility, we were able to maintain a consistent spread over SOFR of our Term Loan B, reflecting the credit market's confidence in our long-term story, our cash flow and our balance sheet today. With the additional liquidity and our stock trading at attractive levels, we aggressively increased our rate of share repurchases, which we last spoke with you in October. For Q1, we repurchased 5 million shares for $100 million and on a fiscal year-to-date basis through January 6th, the company has spent nearly $150 million to repurchase more than 7% of the shares outstanding at the beginning of this fiscal year. Finally, as Geoff mentioned, with our prior authorization nearly exhausted and our stock remaining at attractive levels, the Board of Directors recently approved an additional $200 million increase to the company's existing stock repurchase program, building on the $150 million incremental authorization announced last quarter.
As of today, the company has approximately $224 million remaining under its current stock repurchase program. At current prices, we see share repurchases as a very attractive use of cash. Moving on to our discussion of our outlook, reflecting our Q1 results and continued confidence in the return to growing on the top and bottom line in the second half, we are reaffirming our outlook for fiscal year 2026. Specifically, we continue to expect the following: net sales growth is expected to be in the range of negative 2% to positive 2%, with growth from Quest and OWYN offset by Atkins. Gross margins are expected to decline in the range of 100 to 150 basis points, and adjusted EBITDA year-over-year is expected to be in the range of negative 4% to positive 1%. This includes increased marketing spend on Quest and OWYN to support growth while focusing on profitability for Atkins. Management is focused on the long-term growth of the total company, and we'll look to provide more fuel should we find the opportunities to do so.
Following the increase in the company's borrowings and accelerated rate of share repurchases, we are updating our outlook for certain below-the-line items. Net interest expense is now expected to be in the range of $19 million to $21 million while the weighted average diluted share count is expected to be approximately 96 million shares, our expected full year effective tax rate remains 25%.
As we look at the shape of fiscal year 2026, consistent with what we laid out last quarter, we continue to expect that the second half will be stronger on both the top and bottom line in our first half. Specifically, consistent with our prior outlook, we assume Q2 will be the weakest quarter for consumption and net sales growth versus prior year. While we will see the underlying benefit of recent distribution gains on Quest and OWYN, growth will be muted by a combination of initial price elasticities, lingering impacts from the product quality issues on OWYN and challenging [indiscernible] for Quest and OWYN, both of which benefited in the prior year from stronger new year new year merchandising programs.
All in, we expect Q2 net sales to decline in the range of 3.5% to 4.5%. Below net sales, we expect to deliver sequential improvement in year-over-year gross margin declines as compared to Q1 with Q2 gross margins down approximately 300 basis points versus prior year, helped by the contribution from pricing and productivity, which we expect will begin to offset headwinds from historically high cocoa prices recent increases in [indiscernible] and tariffs.
As a result, adjusted EBITDA is now expected to decline double digits, slightly below our previous outlook, given the impact of more elevated [indiscernible] costs than we had previously expected. By the second half, we expect growth to improve meaningfully on both the top and bottom line. Specifically, net sales growth is expected at the higher end of our full year range benefiting from distribution growth, including some recent wins, normalizing elasticities, lapping the initial impacts from OWYN's product issues and an exciting slate of innovation launches across our brands.
On the gross margin line, consistent with our outlook from last quarter, we expect second half levels to be roughly in line with or slightly better than our full year fiscal 2025 gross margins on a GAAP basis. This implies flattish year-over-year gross margins in Q3 before Q4 expansion of nearly 200 basis points on a year-over-year basis. I would also highlight that this reaffirmed outlook includes modest tailwinds on towards the end of the year from lower expectations for cocoa costs and tariffs given recently secured supply commitments and announced trade agreements and exemptions. These new benefits will be offset by higher assumptions away across the year.
For adjusted EBITDA, consistent with what we have said last quarter, phasing should generally track the shape of our expectations of gross margins with much stronger results by Q4, which we expect will be our strongest period of profit growth, up double digits year-over-year. We continue to expect capital expenditures to be in the $30 million to $40 million range due mainly to the ongoing previously discussed co-investment with a key co-man partner to support additional capacity in our fast-growing Salty snacks business.
Finally, I would note that our outlook assumes current economic conditions, consumer purchasing behavior and prevailing tariff rates will remain generally consistent across the company's fiscal year. While our outlook improves to a number of important assumptions, there remains several uncertain swing factors outside of our control that could represent risk to our outlook. For a comprehensive summary of our full year outlook, please see Slide 15 in our presentation. Thank you for your time and interest in our company. We are now available to take your questions.
[Operator Instructions]
And our first question will come from the line of Peter Grom with UBS.
2. Question Answer
Happy New Year. So Geoff, I appreciate the commentary on the path forward. But can you maybe just elaborate on the confidence in the back half inflection that's embedded in the guidance? And just what remains an uncertain volatile environment for the industry. maybe where do you have the highest degree of confidence or visibility conversely, where -- what do you see as some key risks or watch points? And I guess as we think about the shape of the year, just given the 1Q and the Q2 guidance, is it playing out as you anticipated?
Yes. So it's playing out very much as expected. And as we previously communicated our plan from the start have known about certain first half headwinds, for example, some shifted promotional activity out of first half and second and known about some second half tailwinds, which we communicated on our last call. If I break that down on the top line, as we look to the second half, we have line of sight to new distribution, some wins there, some merchandising games, particularly on Quest. I'm very pleased with our innovation pipeline that we have that we'll start shipping in the spring and then through the summer. Atkins will start moving past some of it large distribution labs, for example, at club. And we expect, as we normally see elasticities to burn off from pricing.
So on the top line, just listing a few drivers there that underpin our confidence in the second half. On the bottom line, we have a line of sight to improve gross margins, underlying profit growth because we mentioned in the script, we'll have the full benefit of pricing. We'll have the full benefit of productivity very pleased with the productivity progress we've made as an organization, setting us up for a stronger second half, but also into '27 and as mentioned, we've taken more favorable positions and cocoa, which has come down materially.
So on the top and on the bottom certainly have a lot of confidence that we -- the business will start to inflect through the second half and then into '27.
And then, Peter, this is Chris. I'd just build on Geoff's answer. Consistent with our prior outlook, our EBITDA is generally going to track pretty closely to the gross margin trajectory. Q3 gross margins, for example, will be flattish year-over-year. And Q4 will be the strongest position for us for both gross margin and EBITDA -- and EBITDA, as an example, we're expecting to be up about double digits. And I think importantly for me, that sets us up nicely for FY '27 on a margin standpoint.
Our next question is from the line of Brian Holland with D.A. Davidson.
I wanted to ask about Quest bars, flat, obviously underperforming vis-a-vis the broader category there. Innovation is contributing nicely overloads off to a good start, as you mentioned, et cetera, but obviously also implies then that the core or the legacy SKUs sort of in aggregate or declining. So maybe first question there, just -- Innovation is obviously important. The category thrives off that new product news. So that's important and obviously encouraging that you guys have accelerated that pipeline, but what are we -- what needs to be done on the legacy bar business just given the sheer size and scale, I mean, is this merchandising that we need to increasingly focus on, which I know you've talked about before? Or does there need to be some sort of rightsizing on some of these tail SKUs in that brand?
Yes. So if you look at Quest bars in the quarter, Q1, they were flat, [indiscernible] a little bit more recently -- more recent rates, which we expected, as we mentioned, lapping the prior year promotional events through New Year, New Year, some shift in timing. And we always see a higher initial impact from pricing, which we took on Quest bar. So what we're seeing on Quest right now is very consistent with what we expected and what we said on the last call. But to your question, we're obviously not happy with flat. That doesn't work. It's unacceptable.
We are the leader in the bar segment, and we should be driving it. I think I've talked about this in the past. Over the past year, in response to that, we have developed a comprehensive plan to reaccelerate our bar business, and that includes platform innovation, which you'll see in the spring. It includes additional merchandising and new distribution that we have line of sight to an additional marketing that we're going to put behind that. So right now, we're flat. That's unacceptable. To your point, it's a multipronged plan to reaccelerate bars, inclusive of innovation, but also driving our core bar business through merchandising, through distribution and through marketing. Obviously, this is a multiyear plan. It will take time, but I'm very confident in the plan, and you should start to see the impact of that and the results in the second half.
Appreciate the color. And then pivoting over to OWYN briefly. Obviously, there's a lot of noise right now between the increase in marketing spend, working through the product quality issues and that old inventory. But as we start to move forward, you're giving us metrics around brand awareness, household penetration, so maybe a 2-part question here. If I look at the relationship between household penetration, and I think 4.5% branded awareness at [indiscernible] awareness at like 20%. Is that the right delta today? Or does that imply better or worse conversion off that awareness than you compare that against other brands that you've managed?
And as we go forward, how should we be judging the step-up in marketing investment and your ability to convert, is it watching the relationship between household penetration and brand awareness that you're building over time?
Yes. That relationship between aided awareness and for us 4.5% house of penetration pretty standard. So what it does point to is the significant upside opportunity we have on this brand. So while the relationship is pretty standard, those numbers are very low. And that really is a key opportunity for us to drive a line, which is why we've increased marketing substantially, which then should translate into increased household penetration. One of the ways in which we plan to accelerate that in addition to marketing is to expand the footprint of OWYN. So right now, we've got a really good shakes business. We'll continue to drive that. We've got distribution upside. We've got a smallish powders business that's growing 50% plus that we plan to put more effort behind.
And then you should expect us to bring platform innovation that will expand the footprint of the brand further. So the key ways to expand pallet penetration marketing, which have increased more than double. Innovation, which expands the footprint and then continuing to drive out distribution, we see this brand having a tremendous runway just why we acquired it. It's on the leading edge of the clean movement, and we plan to pull all of those levers to drive awareness and drive console penetration.
Our next question is from the line of Megan Clapp with Morgan Stanley.
I wanted to stick with OWYN -- I wanted to stick with OWYN, if we could. So underlying consumption in the quarter clearly strong. I think a bit better than you had actually laid out when we talked last quarter, talked about kind of the gap and the destock related to some of the quality issues in inventory. I wondered if you could just give a little bit more color on how that kind of came up during the quarter or whether it was driven by one or multiple customers? And then Just, Chris, I think you said as you move into the New Year, new you period, you'd expect shipments to better align with consumption. Should we interpret that as there was still maybe a gap at the start of this quarter and it should close as we move through the second quarter. Just trying to kind of understand your level of confidence and consumption, which is clearly strong kind of matching shipments as we move through the balance of the quarter.
Yes, I'll start and turn it over to Chris, to your point, we were pleased with how consumption came in, in Q1, led by some distribution gains, mass test and a club customer. RTDs were solid, as I mentioned earlier, previous question, powders growing 50%. And this does underscore the leadership position we have in plant based and clean label, which grew 20%.
In terms of bridging the gap to sales, as Chris mentioned, the primary driver was we came in heavier on inventory and we had some lingering impact from the quality issue.
And then, Megan, just to build on that, we do believe we're in a better position now in terms of shipping to consumption. As you mentioned in the remarks, the ERP -- the ERP cutover was a big piece of why we were slightly heavy on inventory coming into Q1. We thought that was a prudent action to take to make sure we didn't have any supply disruption and then obviously, as Geoff mentioned, the lingering effects of the product issues also had an impact on the quarter. So from -- overall, though, in the long run, we do think consumption is the best measure of brand health. And as I said, we think we're set up now in Q2 to be much more -- much closer in terms of shaping the consumption.
Okay. That's helpful. And then, Chris, just a follow-up if I could on the margin. I think you said at the end of your response to Pete's question that you'll be set up nicely in fiscal '27 from a margin standpoint. I guess when we look at the shape of this year, I think you'll end the year in exit kind of in that mid-36% range on the gross margin and understand there can be kind of seasonality. And you probably don't want to give fiscal '27 guidance right now, but is that a good jumping off point as we think about fiscal '27 just that exit rate on 4Q, particularly as you talked about some of the favorability you expect from cocoa?
Yes. As I've talked about, I think last quarter as well, we do have good line of sight with our supply coverage. And we do obviously know what we paid last year for cocoa and for other commodities, we can see where the prices are. So we feel very confident about our overall gross margin. I think the mid-36 is range that you mentioned on Q4 is directionally right. And I think that is, as you said, a good jumping off point for F '27, but clearly, at this point, I'm not going to be guiding on F '27. But all as equal, it probably at least an assumption in terms of the starting point for the year.
Our next question is from the line of Alexia Howard with Bernstein.
Can I ask about margins? I seem to remember that when you first bought OWYN, it was a pretty low margin business, but you're obviously in the middle of extracting a lot of cost synergy from that. And I also seem to remember that you commented recently on quite a wide discrepancy between where the Quest margins are and [indiscernible] margins for Atkins. I mean as we look out over the next 18 months, do we see sort of a major ramp on the margin side, both on the gross margin side and on the operating margin side driven by things like cutting off the tail of unprofitable SKUs of Atkins, the underlying cost realization at OWYN, other drivers that you anticipate. I'm really thinking about the gross margin getting back to that sort of 37 territory. Is there a line of sight into that. And I'll pass it on.
Yes, from a margin standpoint, really in terms of getting back and rebuilding our margins up into that sort of 37 plus range. The biggest drivers really are the pricing productivity. We know there's a land you've talked about it last time, pricing productivity lag versus inflation, that lag is going to start to overlap in half 2 of this year. We also, as I said, have good line of sight to cost visibility, both on cocoa and our other commodities and we do have a nice tailwind coming from cocoa, which will start to kick in, in Q4 of this year or flow more into F '27. Obviously, as we talked about in the prepared remarks, we do have -- we do see inflation on way, which is going to offset that to some extent. But those are some pretty big drivers on margin and certainly very much in our control, which I -- which makes me very confident on rebuilding our margins.
In addition to that, there is the mix impact as we mix out of Atkins, as we mix into Quest, that is also obviously going to have a more long-term structural benefit on margins. And then as you mentioned, I think in the question, yes, we did drive some very nice synergies on OWYN as we integrated it. Those are building through this fiscal year. So those are kind of already embedded in that 36 -- mid-36 range for Q4, that's already sort of fully loaded from an OWYN margin standpoint.
And then I guess the final piece that we just put on OWYN, as we talked about as we build scale and we build, as Geoff mentioned, platform innovation, I would hope certainly that those would certainly be accretive to the OWYN margin as a brand.
The only build I would have on that is -- Alexia, is about 18 months ago, we did put in place a very robust and enhanced productivity program that took 6 to 9 months to ramp. But as we sit here today, we have strong visibility based on terrific work from this team and our supply chain teams and R&D teams and that will enable us to continue to support our margins that will allow us to continue to support investments in the business.
Our next question is from the line of Jon Andersen with William Blair.
Just a couple here. On sales overall flat for the quarter, can you help us a little bit with the composition? How much did pricing help in the first quarter and how much will pricing -- how much will flow through as we move into the second quarter and second half? And then I had a question -- a second question on Atkins. I think last quarter, you talked about 10% to 15% of the Atkins business being kind of tail, meaning in the bottom quartile of velocities. Is there an update on that? And what I'm really trying to get at is where you think you are kind of in the process of getting to that optimal assortment for that rightsized assortment on Atkins.
Jon, I'll take the top line question and maybe Geoff will take the Atkins one. Look, for Q1, I think what's important to keep in mind is we had. Yes, we were roughly flat year-over-year, but slightly better than we had anticipated and certainly a little bit better than we guided at the start of the year. Quest and Atkins really quite happy with where Q1 land is both of them were ahead of expectations. And OWYN, as we talked about, obviously, behind for the reasons we've already stated. In terms of composition of that, pricing really was almost 0 benefit in Q1. The effective date on shelf was really towards the very, very end of October. So we had a very small amount flowing into Q1. So a really minimal impact in Q1 and it will be closer to sort of low single-digit benefit for balance to go, which is consistent with what we said last quarter.
Yes, I'll take the Atkins question. I just don't think it's important to point out that the majority, 2/3 of the declines we're seeing on Atkins today are driven by loss distribution, particular impacts at club, which will be almost fully passed in April. But to your question, Atkins, if you look at the business today, as I've said in the past, 75% of Atkins sales today come from SKUs in the top half of category velocity, which in my experience, is generally considered safe. If you look at just the lowest quartile, 10% to 15%, which typically would be at risk. So no change there that helps dimensionalize the risk. And we'll say that rather than just lose those SKUs. We believe the right thing to do for the brand category and the company is to partner with retailers to drive to an assortment that would include replacing those SKUs with Quest and with OWYN, faster turning SKUs. I think that's the benefit of the category and the company.
What I would say is I have been pleased that we've seen more flow back than we had forecasted on in Q1 where we've lost distribution. So early days there, but the level of flowback we are seeing into the business, it partially explains why Atkins had a better than forecasted quarter.
The next question comes from the line of Matt Smith with Stifel.
Chris, just a follow-up question on cost visibility and tariff expense. You called out a $4 million headwind from tariffs in the quarter. When would you expect to start to see relief given the revised trade agreements? Should you start to see tariff favorability relative to your previous guidance in the second half of the year? Or does that really start to flow through in fiscal '27?
Yes. Thanks, Matt. I think importantly -- again, as we look at total cost and we see that, we do have good visibility out. We did get a little bit of relief since we set guidance on tariffs with especially the Annex 3 exemptions and that will start to flow through. It's going to be flowing through really starting in the second half of the year. Again, when you think about cost of inventory and as it flows through our inventory and we ultimately ship it. There is a timing lag. So that will be more of a second half benefit into next year.
Again, I'll just refer back to -- yes, we have some tariff benefit coming in, in the second half. We have cocoa benefit that's going to start flowing in, in Q4, but we do have a new sort of headwind that's come in, which is the way inflation. So all in, not concerned overall on cost, and that's why we haven't changed our gross margin guidance for the year and pretty -- actually pretty much right on the same number for Q4 in terms of what we were thinking, but yes, from a tariff standpoint, benefit the stock plan in the second half.
And Geoff, as a follow-up to your commentary on capital allocation, the company has been running as a portfolio of brands for some time, and you've been open to adding brands, but are you seeing a change in the category given the insurgent brand dynamics and competitive activity? Is that impacting your M&A view? And when we think about the share repurchase year-to-date has been fairly aggressive. Are you confident in the current brands that you own supporting your long-term algorithm?
That's a good question. So obviously, we haven't changed our framework for capital allocation. Certainly, M&A is something we look at. I think we've got a pretty decent track record with M&A. Right now, as we look at our stock price, which we think is significantly undervalued, we think the right use of cash is to be in there and buying the stock back, given our confidence in our long-term health of the business. But M&A is something that we're always looking at. There are -- as you mentioned, there are targets out there. Obviously, we want to get it at the right price. So we haven't -- that hasn't changed. Our buyback position is opportunistic in a sense in that we view our stock is significantly undervalued and we think the best use is to go in there and buy it back at these 2 levels.
And I'll just -- Matt, I'll just build on Geoff's answer that we have a very strong balance sheet. Obviously, we took, I think, advantage of the stock price, and we also took advantage of of our refinancing window to increase our debt level a little bit, like modestly, still less than a turn at this present time. We project that to still be around a turn by the end of the year. And we use that extra -- those extra funds to accelerate our stock buyback while our stock is cheap. And I think the authorization increase from our port recently is another $200 million, I think it's just in my mind, reflects our confidence in the long-term strength of our business, the long-term strength of our balance sheet. And while we still have attractive share prices, we'll continue to use our cash accordingly.
The next question is from the line of Robert Moskow with TD Cowen.
I wanted to dig a little deeper into the clinical study that you're conducting on GLP-1 users, and you say these are users who are following the Atkins nutritional approach. Can I assume that this means that you followed users who are on the Atkins diet. And if so, what's the next step, Geoff? Like what would you do with the results of this study to help you market the brand? How would you use it to help you retain distribution with retailers. Just a little bit more info on like what you intend to do with the results.
Yes. So the role of Atkins has always been to help people lose or maintain weight. And as we saw continue to see consumers turn to GLP-1 and drugs to help them with us 2 years ago. So a couple of years ago, we undertook a pilot clinical study to test whether Atkins could be a valuable tool or companion to people on the drugs. So we had 2 groups of patients on -- who were taking the drug 1 group using the Atkins diet and the other using a more traditional load back diet. We just got the results back in last month. So it's still very early, but those results were very encouraging. Patients on the Atkins diet have taken the drug, handed to retain more muscle mass, which is a critical issue for people on the drug. Tended to experience fewer side effects, a few headaches, nausea with gas, and there were some other significant differences on metabolic outcomes, particularly for those with diabetes. But it was a pilot study, but nonetheless, very, very encouraging that Atkins can play an important role. We have a lot more to learn. What you will start to see, to your point, is us leveraging the study results and our new year, new you media for starting in the next few weeks. You'll see us start to message around this, start to target around this. And literally, as we speak because these results are very fresh, our teams are in front of retailers who are also trying to figure out how to meet the needs of GLP-1 patients. So over the next few months, our selling team will be out in front of the trade and for the retailers talking to them about the results, talking to them about the importance of Atkins. So it's early. It's a pilot study. With that being said, we're very encouraged -- and you'll start to see us execute against us over the coming months.
The next question is from the line of Steve Powers with Deutsche Bank.
A couple of questions around planning assumptions, just going back to Quest Salty. The first one is maybe just give us an update, talk about distribution gains generally in the forecast. Curious as to what your distribution outlook is on Quest Salty specifically and if there are any gains embedded in the full year outlook, number one. Number two is just more generally on forecasting in that business. I think as I think about it, there are kind of competing factors on the one hand, favorably. I think there's a greater consumer awareness and consumer acceptance of kind of protein-based salty snacks, which is part of credit to your success.
On the other hand, that has brought with it increasing competition from other smaller independent brands as well as increasingly from conventional brands looking at the category. So just curious if you step back and think about those dynamics, whether that has changed your approach to forecasting in the Salty business.
Yes. Same way, Steve. Look, we could not be more pleased with our Salty business, plus 40% in the quarter. Admittedly, we had some easier laps a year ago, but could not be more pleased. The core drivers are innovation. We've got new flavors, new forms, pack sizes, exclusive retailers, which are performing extremely well. We continue to build distribution, again, merchandising, displays across the store, away from harm, gyms, airports, hotels, and I'm not sure if you've seen our new campaign, but it's pretty heavily weighted towards Salty. So those are the key drivers.
As we look to the second half, we're very confident in the continued momentum of Salty. We have line of sight to new distribution. We have line of sight to significant merchandising gain. And part of that is because retailers view Salty as highly incremental to the category. And as a result, they're rewarding us with new distribution and new merchandising. So a lot of confidence in the momentum. As we think long term, I do want to remind that Quest is the pioneer of the segment. We've built it from the ground up. It's been growing for years at a high clip. And that reflects that we know we have a superior product. And really importantly, consumer trust Quest and trust our Salty business has tremendous authenticity in the space. Salty is a $50 billion category. We only have 10% household penetration. Awareness is still relatively low. I've seen the multiyear pipeline, you should expect us to be looking at other forms of Salty.
We have no intention of taking our foot off the gas. Obviously, we've been operating under the assumption that competition is coming. The growth, the demand for this product just makes it obvious. But we're highly confident in the strength of our brands, strength of our products, our competitive mode from a supply chain perspective and both near term and long term, we have tremendous confidence in this business.
Very clear.
Just -- just want to add, Steve, to what Geoff said. Look, if you think about Quest as a brand and look at the areas that we're already building strong businesses, I think it's very important for me to Quest as a brand can absolutely play across the entire Salty universe. Today, we have a business that's really an enormous chips business, but there's a lot of other areas in Salty across the store where I strongly believe that Quest can build a meaningful business. And for that reason, that's one of the reasons we've been resourcing against that, both internally and with our manufacturers.
Yes. Very clear. And I know we're late in the call. Just a quick last question for me, if I could. Apologies if I missed it, but just going back to OWYN. You mentioned in the remarks and the slides that as you think about the long-term path to growth that innovation in new categories will play an important role. I'm curious if fiscal '26 is too early to see some of that or if we should expect that as the year progresses.
It's a big opportunity for us. One of the -- if you remember, Steve, was one of the reasons that we're excited -- why we were so excited about OWYN was to be able to combine our very talented R&D organization, and let them lose on one. So there's a very strong pipeline. What I'll say is, you should expect to see probably the first foray from us, I'd say, certainly, this fiscal probably for the timing around there. I'm really excited about the opportunity. Yes, it's significant.
And the final question is from the line of Tyler Pros with Stephens.
RTD is becoming an increasingly competitive space, how should we think about growth within this part of your portfolio? And is this a unique subcategory where we could see consumption for Quest, OWYN and Atkins all positive this year?
RTD is certainly competitive. It's not surprising for a while. The category was somewhat supply constrained. I think limited the extent of competition. Unsurprisingly, you're seeing some new entrants into the category. When I point out the category is still growing 10% plus in RTDs, which is significant. When it comes to our brands, I'll start with -- on very uniquely positioned within that category. It's not just another RTD milkshake or chocolate or strawberry flavor. It is positioned as the leading clean and plant-based proposition in the market, very differentiated. Retailers see that, consumers see that, so I feel very confident.
This clean movement, I think, is in the early innings, and we intend to ride it as the leader. So I think from a perspective, OWYN, very differentiated, we've been very pleased with how Quest has performed in the space, Quest has the highest protein level at 45 grams, phenomenal tasting, which you'd expect from Quest. So differentiated position there. And Atkins plays a very different job in the category. Atkins is about helping consumers maintain their waste. It's a different job, and I think a differentiated job, particularly when we start to leverage the GLP-1 findings, where shaped could be a very important tool to consumers on the drugs.
So we believe that we have 3 very differentiated positions -- differentially positioned brands inside a category that's still robust still growing double-digit. So we have a lot of confidence in the future growth here.
At this time, we have reached the end of our question-and-answer session. Now I'll hand the floor back to management for closing remarks.
Thanks. I want to thank everyone for their participation today on today's call. If you have any follow-ups, please feel free to reach out to Josh, and we look forward to speaking with you again on our Q2 call in April. Have a good day.
Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation. Have a wonderful day.
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Simply Good Foods Co — Q1 2026 Earnings Call
Simply Good Foods Co — Q4 2025 Earnings Call
1. Management Discussion
Greetings, and welcome to The Simply Good Foods Company Fiscal Fourth Quarter 2025 Conference Call. [Operator Instructions]
It is now my pleasure to introduce your host, Joshua Levine, Vice President of Investor Relations. Thank you. You may begin.
Thank you, operator. Good morning, and welcome to The Simply Good Foods Company's Fourth Quarter and Full Fiscal Year 2025 Earnings Call for the period ended August 30, 2025. Today, Geoff Tanner, President and CEO; and Chris Bealer, CFO, will provide you with an overview of our results, which are provided in our earnings release issued earlier this morning.
Our prepared remarks will then be followed by a Q&A session. A copy of the release and accompanying presentation are available on the Investors section of the company's website at thesimplygoodfoodscompany.com. This call is being webcast, and an archive of today's remarks will be made available.
During the course of today's call, management will make forward-looking statements, which are subject to various risks and uncertainties that may cause actual results to differ materially. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings.
On today's call, we will refer to certain non-GAAP financial measures that we believe provide useful information for investors. Due to the company's asset-light high cash flow business model, we evaluate our performance on an adjusted basis as it relates to EBITDA and diluted EPS. Please refer to today's press release for a reconciliation of our non-GAAP financial measures to their most comparable measures prepared in accordance with GAAP.
The acquisition of Only What You Need, or OWYN, was completed on June 13, 2024. As we have now lapped the anniversary date of the OWYN acquisition, the use of organic refers to year-over-year growth for brands we have owned for more than 12 months on a comparable basis. For Q4, organic growth includes year-over-year growth for Simply Good Foods' business, excluding the period of time prior to the closing of the OWYN acquisition, as well as the impact of lapping the extra week in the fourth quarter of fiscal year 2024.
Finally, all retail takeaway data included in our discussion today, unless otherwise noted, reflects a combination of Circana's MULO++C measured channel data, and company estimates for unmeasured channels for the 13 weeks ended August 31, 2025, as compared to the prior year.
I will now turn the call over to Geoff Tanner, President and CEO.
Thank you, Josh. Good morning, everyone, and thank you for joining us. Fiscal year 2025 was a solid year for Simply Good Foods. We delivered 9% reported net sales growth, including 3% on an organic basis and grew adjusted EBITDA by 3%. On a pro forma basis, including OWYN, but excluding the extra week from the prior year, net sales increased over 4% with adjusted EBITDA up approximately 6%. We largely completed the integration of OWYN, invested in our people and capabilities, and put our cash to work, paying off $150 million of debt and repurchasing more than $50 million of our stock.
Our vision is clear. To be the scaled leader in high-protein, low-sugar and low carb food and beverage. There is a generational shift towards these products that is quickly mainstreaming. One of the most impactful trends in food and beverage today. This is best highlighted by the continued strength of the nutritional snacking category. Our traditional aisle, which includes on-trend, high-protein performance nutrition, as well as adult nutrition and several other fast-growing subcategories.
In aggregate, this broader category has grown at least high single digits for the past 5 years and grew plus 13% this year, reinforcing how relevant it is today and supporting studies that show more than 70% of Americans are actively seeking more protein and less sugar, as well as fewer carbs in their diets.
In support of our vision, we have been on a journey to rapidly evolve our organization to win in this exciting and dynamic space. In the last couple of years, we have rapidly shifted our portfolio. Quest and OWYN now represent nearly 3/4 of our net sales with both growing double digits in fiscal year 2025. Quest, which generated almost 2/3 of the company's net sales in Q4 is the category disruptor, flipping the macros on large mainstream snacking categories.
Over the past 2 years, we have accelerated the pace of product innovation while broadening our reach with marketing up about 50% since fiscal 2023, and household penetration now approaching 20%. Our recent acquisition of OWYN enhanced our presence in the fast-growing ready-to-drink shake segment, while positioning us to become a leader of the rapidly accelerating clean label movement.
To support our fast-growing Salty Snacks business, we're expanding capacity for the second time in 2 years with construction on an additional production line now in progress. We increased our investment in innovation, strengthening R&D, and reducing time from concept to launch. We invested in new sales talent and selling capabilities, expanding our opportunity to drive distribution, both within and beyond our core aisle, and to deepen penetration within channels. And we ramped up productivity initiatives to combat inflation and free up funds to fuel our growth.
Additionally, to compete and win in our space, we have consciously increased our organizational output across all facets of the company. We have challenged our [indiscernible] to reduce lead times and innovation and marketing, embrace agility in our supply chain, and evolve our marketing playbook to incorporate an insurgent mindset to compete against brands large and small. The goal is an organization that combines the agility and speed of an insurgent challenger with the advantages of scaled R&D, supply chain and selling capabilities. I am excited by the improvements we have made and how these actions position our company to win.
In the near term, however, we must address two important challenges. We understand the magnitude of each have plans against us and are confident we will work through these headwinds as we continue to evolve the company.
First, as we've discussed in the past, Atkins is losing shelf space in the highly competitive nutritional snacking aisle. Over the last several years, as sales for this category doubled in size with space at a premium, Atkins large distribution and merchandising footprint has come under pressure, with sales declines in recent periods, mainly driven by distribution cuts at several retailers, especially at [ clubs and MAX ]. 75% of Atkins' retail sales today come from approximately half of its SKUs, which turn in the top 2 quartiles of the category velocity rankings.
As we enter fiscal '26, our tail SKUs that turn in the bottom of category velocity rankings have been trimmed back at [indiscernible]. As we consider potential future distribution risk across our top accounts, it's important to note that only approximately 10% to 15% of Atkin SKUs on average are still in the bottom quartile today. While painful in the short term, this process will better align Atkin shelf space with sales in support of a sustainable business powered by a strong core assortment.
Encouragingly, at a large retailer, where we recently saw a double-digit decline in distribution, our average velocities are up nicely across the reset, giving us confidence we're on the right track. To help strengthen the brand and attract new consumers, in September, we began to flow into market several initiatives. These include new advertising that reorients Atkins from a more general lifestyle brand back towards weight management, as well as modernize packaging, innovation and an updated website. We've also brought to market a smaller pack size within our bar portfolio, providing consumers a more attractive entry price point, intended to stem declines in one of the more challenged parts of the business.
Our strategy acknowledges the need to rightsize Atkins space rather than trying to prop up our underperforming tail. A key component of this approach is proactively working with senior teams at our key retailers to manage our assortment and flow back to support the continued expansion and prioritization of Quest and OWYN. Again, while these decisions may be painful for the Atkins brand in the short term, we're taking the right decisions and the right actions with the brands, the category, and for Simply Good.
Our second major challenge is inflation. In order to ensure we had adequate supply to meet consumer demand, we contracted for cocoa at historically high prices which, in addition to tariffs weighed heavily on our margins in the back half of fiscal 2025. This pressure will continue in the first half of fiscal year 2026. At this point, we're confident our gross margins will improve beginning modestly in Q3 and more meaningfully into Q4, driven in part by the coverage we've already secured on cocoa through most of the second half at rates well below prior year. We continue to monitor the markets and note that current spot levels present further potential favorability as we exit this year and primarily into fiscal 2027. In addition, we've also responded to inflation with aggressive productivity actions and pricing, which we announced to the trade in August, and which will be in market by the end of Q1 of fiscal 2026.
I'm pleased with the significant progress our teams have made on productivity, a capability that we significantly expanded over the past 2 years with benefits that will flow into our margins in the second half of fiscal 2026, and into '27. Looking ahead, we're in a strong position. We operate in an on-trend, high-growth category, benefiting from a generational shift towards high protein, low sugar, low cap products. We will lead this shift and create value for our shareholders by accelerating innovation, expanding physical availability of our products and from breakthrough marketing. Our world-class R&D team asset-light model, category leadership role with retailers and enhanced selling capabilities give us a competitive edge, and our strong balance sheet provides optionality for M&A.
Turning to Quest, which represented almost 2/3 of our net sales in Q4. Quest delivered year-over-year consumption growth of 11% in the quarter and expanded Household penetration to 19%, up 170 basis points versus prior year. For fiscal year 2025, Quest grew consumption 12% and net sales of 13% on a 52-week basis, helping to deliver a 5-year CAGR of nearly 20% under our ownership. As the brand approaches $1 billion in net sales, we're very pleased with this performance, and we remain confident in our ability to continue to disrupt the nutritional macros across many categories. Credit goes to the Quest team, a nimble and competitive culture and a framework for growth based on disruptive innovation, expanding physical availability and increasing brand awareness.
Our Quest Salty Snacks portfolio continues to outperform with consumption up 31% for the quarter and 34% for the full year. From representing 20% of Quest retail sales 3 years ago, [ Salty ] is on target to be our largest platform by the end of fiscal year 2026. The size of the addressable market is large. We have a rich pipeline of innovation. We continue to gain shelf and merchandising space in and outside our aisle. And as mentioned, we've invested to expand capacity.
Our Quest [ bar ] business grew 2% in Q4 and for the full year, driven by our [ Hero ] line and our new overload [ bar ] platform. If you recall, our hero or chocolate-covered crispy line of bats and our recently launched overload bars with delicious inclusion heavy offerings are part of the wave of more indulgent protein bars. These products amp up taste and texture while delivering the nutritional macros consumers are looking for. While we're moving in the right direction on bars, our goal is to further accelerate our growth in this space. Over the past 18 months, we've built an impressive pipeline of exciting new platforms, flavors and textures that we'll bring to market in the coming years.
Our Quest bakeshop platform continues to perform, and I'm excited for the launch of our first [indiscernible] shop line extension a great tasting, high-protein donut expected to hit shelves during Q1 of fiscal 2026. We're also encouraged by the early performance of our new RTD milkshake platform, which is disrupting the category in a way only Quest can, with leading macros and great taste. With strong commercial execution and more platform expansion to come in the spring, we're confident we can win in the fast-growing competitive RTD category.
Lastly, with the recent launch of the second generation of our It's Basically Cheating advertising campaign. Campaign of [ humorous ] ads highlights how Quest uniquely enables consumers to succumb to their food desires by resolving the inherent tension between food that taste great, and food with good nutrition. Ads have already begun on Thursday in our football and will continue to be featured across a range of digital, social and other media properties throughout the year. Quest is our largest and highest-margin brands and the innovation leader in the category. As we rapidly evolve our organization, Quest will be at the forefront, continuing to deliver strong growth.
Moving to Atkins. Fiscal year 2025 was a challenging year. Consumption declined 12% for Q4 and 10% for the full year, largely driven by losing distribution at club, and not repeating certain high-volume, low ROI merchandising events principally in math. Challenges continue to be concentrated primarily in bars and confections, whereas shakes were down 4% in the quarter and only 2% for the full year, supported by the success of the 30-gram [indiscernible] RTDs we launched a year ago.
In the e-commerce channel, where space is not a constraint, we continued to drive solid growth with a key partner, up mid-single digits. As mentioned, as we evolve our company, Atkins will be a more focused brand around a core assortment, and we are being proactive in our efforts to get there. We acknowledge that there will continue to be short-term pain for Atkins with consumption expected to decline approximately 20% in fiscal year 2022.
Consumer research continues to show that Atkins core strength lies in its scientific credibility and proven history of helping consumers achieve their weight loss or maintenance goals. In short, Atkins works. This gives us confidence that even as we are partnering with key retailers to repurpose Atkins space to accelerate growth for Quest and OWYN, we're making the right investments and taking the correct actions to stabilize and ultimately support the long-term sustainability and profitability of the brand.
Turning to OWYN. Consumption grew 14% in the fourth quarter and 34% for the full year, with household penetration up 100 basis points to 4.2%. Double-digit RTD retail sales benefited from new distribution gains at a key [ mass ] customer and a tester club. I want to address the somewhat slower consumption growth we've observed over the last few months. The impact of lapping distribution, which I've discussed before, was exacerbated by a product quality issue related to a raw material sourcing decision for [ P protein ] made prior to the closing of the acquisition. Specifically, this [ P Protein ], which was used in a portion of production during Q2 resulted in taste and texture issues on certain lots as the product aged. While the affected product made up only a small minority, I want to be clear that it was 100% safe and met all of our allergen testing protocols. However, the product experience was poor and showed up in ratings and reviews. Therefore, as we ramp distribution and trial coming into Q4, our consumer response was not as robust as we would have liked. And as a result, velocity slowed.
We have already mitigated the issue and begun aggressive programming and trade and customer marketing aimed at reaccelerating trial and growth rates. In spite of the challenge, OWYN still grew double digits in Q4, which is a testament to the unique positioning and strength of the brand. And early on here in Q1, OWYN sustained a mid-teens growth rate in September even as it lapped a big event at Club last year. With the integration largely completed, we will now leverage the full scale and capabilities of Simply Good to drive growth of the business.
In fiscal year 2026, this will include significantly stepped up trade and marketing investments I spoke about. In addition to leveraging our retail teams to drive displays, both distribution gaps and bring highly differentiated innovation to market. In addition to shakes, powders also represent a huge opportunity for us at 12% of the brand's mix today growing significantly. OWYN's mission is to forge a new standard of clean. Its products are free from the top 9 allergens and have a cleaner and simpler list of ingredients. Simply put, OWYN is built for today's evolving consumer preferences.
Recently completed research shows OWYN has leading equities in clean, plant-based nutrition. Aided awareness is low at 20%, reflecting significant headroom with ACV for shakes in the mid-60s and only 26% for powders. This is why we must invest more to drive awareness and build household penetration. We're only scratching the surface for what this brand can be, and we're fully committed to unleash its full potential.
To summarize, fiscal year 2025 was a solid year, but much work remains to evolve the company to win in this exciting category. I acknowledge our guidance for fiscal '26 is below our long-term algorithm, and we are committed and confident we're making the right investments and taking the right actions in fiscal 2026 to set up fiscal 2027 for success. Approximately 3/4 of our portfolio through Quest and OWYN is driving strong top and bottom line growth. We're building a fast-paced, agile culture, backed with world-class capabilities necessary to win in this category. With Quest and OWYN driving growth, Atkins being reshaped for the future and productivity and pricing initiatives underway, we're confident in our ability to deliver sustained growth and value creation for years to come.
I'll now hand the call over to Chris to provide you with details of our financial results and outlook.
Thank you, Geoff. Good morning, everyone. Overall, our fiscal year finished generally in line with our guidance, with some modestly higher costs impacting our margins as we exited the year. Organic net sales grew at least 3% in each of the last 3 quarters. We continue to invest in our brands, our talent and our capabilities to position the company for the long term. And we generated a lot of cash that we put to work. We are operating from a position of strength as we exit fiscal 2025 and assess the challenges facing us in fiscal 2026. I will now discuss our financial results.
For net sales, total Simply Good Foods fourth quarter reported net sales of $369 million declined 1.8% versus last year. Excluding the small contribution from OWYN prior to the anniversary date of the acquisition's closing, as well as the lap of the 53rd week, organic net sales grew 3.5%. The key driver of this organic growth was Quest, which grew 15.9%, primarily from strong performance in our salty snacks business. While Atkins declined 18.3% as a result of distribution losses, and related trade inventory reductions.
Gross profit of $126.6 million declined 13.3% on a reported basis from the year-ago period, driven mainly by lapping the 53rd week and elevated inflationary costs, most notably cocoa. Gross margin was 34.3%, a decline of 450 basis points versus prior year on a GAAP basis, largely reflecting higher input costs, and the initial impact of tariffs that were only partially offset by productivity and pricing. Excluding the inventory step-up related to the acquisition of OWYN, which was a 90 basis point headwind to gross margins in the fourth quarter of last year, gross margins declined 540 basis points.
Selling and marketing expenses of $32.4 million were down 20.6% versus prior year, primarily the result of a planned pullback in Atkins marketing and lapping the 53rd week. G&A expenses of $40.6 million declined 1.6%, primarily due to lapping the 53rd week, that was mostly offset by OWYN integration expenses. Excluding stock-based compensation and onetime integration and other costs, G&A declined 16.6% to $27.6 million, driven by lapping the 53rd week and the initial realization of cost synergies related to the OWYN acquisition. As a result, adjusted EBITDA was $66.2 million, down 14.5% from the year ago period. Excluding the lap of the 53rd week, adjusted EBITDA declined in the high single-digit range.
During the fourth quarter, we determined that there were indicators of impairment related to the Atkins brand and related intangible assets. After conducting a quantitative impairment assessment we recorded a noncash loss on impairment of $60.9 million. The impairment is the result of Atkins performance in fiscal year 2025 and updated projections of future revenue. Net interest expense of $3.6 million was down $4.3 million versus the prior year as a result of lower debt balances, while the effective tax rate was 20.2%. Net loss was $12.4 million, down from the net income of $29.3 million last year due primarily to the impairment charge I just mentioned.
On a full year basis, reported net sales grew 9%, mainly driven by the OWYN acquisition, which added nearly 8 points of growth, partially offset by approximately 2% impact from lapping the 53rd week. On an organic basis, net sales increased 3%, driven by Quest, which grew 13.4%, as well as a small contribution from OWYN in Q4. Atkins was down 12.9%. Gross profit grew 2.8% year-over-year on a reported basis, driven by net sales growth that was partially offset by inflation, while gross margins for the full year declined 220 basis points as a result of elevated input costs, as well as dilution from the OWYN acquisition. Finally, adjusted EBITDA grew 3.4%, driven primarily by net sales growth, while reported net income declined largely as a result of the loss on impairment and other significant onetime costs primarily related to the OWYN acquisition.
Fourth quarter diluted loss per share was $0.12, versus earnings per share of $0.29 in the year ago period, driven primarily by the impairment charge I mentioned a moment ago, which was a $0.45 after-tax headwind in the quarter. Q4 adjusted diluted earnings per share was $0.46, compared to $0.50 in the year ago period. On a full year basis, the company generated diluted EPS of $1.02, a decline of 26.1% versus the prior year, largely due to the aforementioned impairment charge and onetime integration costs. Adjusted diluted EPS of $1.92 increased 4.9% versus the comparable prior year period. Please note that we calculate adjusted diluted EPS as adjusted EBITDA less interest income, interest expense and income taxes divided by diluted shares outstanding.
Moving to the balance sheet and cash flow. As of the end of Q4, the company had cash of $98 million, an outstanding principal balance on its term loan of $250 million, bringing our net debt to trailing 12-month adjusted EBITDA to approximately 0.5x. Full year cash flow from operations was $178 million, compared to approximately $216 million last year. The decline was primarily due to higher uses of working capital. Capital expenditures finished the year at approximately $20 million, reflecting the timing of initial payments related to the strategic investments we are making to support additional capacity. I will discuss this in more detail in a moment.
For fiscal year 2025, the company repaid a total of $150 million of its term loan debt, bringing total repayments from the OWYN acquisition to $240 million, or essentially all of the $250 million borrowed to fund the purchase. We remain very comfortable with our gross debt levels today. In addition, during the quarter, the company used approximately $27 million to repurchase nearly 900,000 shares. For the full year, the company used approximately $51 million to repurchase nearly 1.6 million shares, or almost 2% of our outstanding common stock. Finally, as detailed in this morning's press release and to reflect management's and the Board's continued confidence in the business, the Board of Directors recently approved a $150 million increase to the company's existing stock repurchase program. As of October 23, 2025, the company has approximately $171 million remaining under its revised stock repurchase authorization.
Moving on to a discussion of our outlook. Since we last spoke with you in July, here is what has changed. First, as a result of accelerating pressures from inflation and tariffs, we announced the targeted pricing actions that will be in market by the end of Q1, and are expected to be a low single-digit benefit once fully implemented. These actions cover all three brands and will help us restore our margins, but in the near term, will cause our top line trends to be more subdued as a result of initial elasticity.
Second, near-term growth slowed for OWYN as a result of the identified quality issue, which will also require incremental trade and brand investment to reaccelerate growth. Third, the impact from tariffs are now generally more certain. Apart from any changes in the prevailing tariff rates for Chinese imports, considering the ongoing negotiations where timing and magnitude remains uncertain. Assuming no significant change in prevailing tariff rates on China, we estimate our total tariff exposure will be less than 2% of our fiscal 2026 cost of goods sold on a net basis, including the benefit of currently identified mitigants against which we are already taking action. Given the trade agreements announced to date, the blended tariff rates will come in slightly higher than we were previously expecting.
Fourth, we have a secured coverage on cocoa supply that as we move through the second half of fiscal 2026 will be progressively at prices below prior year, giving us good visibility on cost and margin improvement, as we move through fiscal 2026 and into 2027. We continue to diligently monitor the commodity markets with opportunity to further lock in more favorable costs and ensure supply.
And finally, while not a change, I want to point out that we remain committed to investing in our growth platforms for the long term, even while we face higher inflation, especially in the first half. Therefore, for fiscal year 2026, we expect the following.
Net sales growth is expected to be in the range of negative 2% to positive 2%, with growth from Quest and OWYN offset by Atkins. Gross margins are expected to decline in the range of 100 to 150 basis points, and adjusted EBITDA year-over-year is expected to be in the range of negative 4% to positive 1%. This includes increased marketing spend on Quest and OWYN to support growth, while focusing on profitability for Atkins. Management is focused on long-term growth for the total company and we'll look to provide more fuel should we find the opportunity to do so.
As we look at the shape of fiscal year 2026, the year will be a tale of two halves, with the second half expected to be stronger on both the top and bottom line than our first half. Starting with net sales. We expect growth in the first half to be at or below the lower end of our full year range, with Q2 likely to be our weakest quarter of the year. The first half will be impacted by initial elasticities related to our recently announced pricing actions and the wraparound drag from Atkins distribution losses. While we will see the underlying benefit of recent distribution gains on Quest and OWYN, growth will be muted by the lingering effects from the OWYN quality issue, and a generally tough lap for Quest and OWYN, both of which benefited in the prior year from strong merchandising programs, particularly in Q2.
By the second half, we expect trends to improve meaningfully, driven by an exciting slate of innovation launches across our brands, normalizing elasticities, lapping the initial impacts from OWYN's product issues and tailwinds from distribution. Therefore, we expect net sales growth in the second half of the year to be at the higher end of our full year outlook range.
Moving down the P&L. The shape of the year will be even more pronounced, driven by elevated inflation and tariffs impacting our margins in the first half, before we benefit from the combination of lower cocoa costs, building productivity and realized pricing in the second half. This lag will be most acute in Q1, when we will have very little benefit from pricing and productivity to help offset the higher costs, including the historically high cocoa inflation and our first full quarter of tariffs. As a result, we expect Q1 gross margins around 32.5%, representing a year-over-year decline of nearly 600 basis points.
Beginning in Q2, we expect to deliver sequential improvement in year-over-year trends for gross margin. And by the second half, we expect our gross margins to be in line, or slightly better, than our full year fiscal 2025 gross margins on a GAAP basis, implying gross margin expansion in Q4 of nearly 200 basis points year-over-year. Adjusted EBITDA should generally track the shape of our expectations for gross margins, with pressures in the first half and much stronger results by the second half. Specifically, we expect first quarter adjusted EBITDA to decline by approximately 25% year-over-year. By Q2, we would expect more subdued year-over-year declines in the high single-digit range before we return to growth in the second half. Similar to gross margins, we expect the fourth quarter to be our strongest period of growth, up double digits year-over-year.
I would note that our outlook assumes current economic conditions, consumer purchasing behavior and prevailing tariff rates will generally remain consistent across the company's fiscal year. While our outlook includes a number of important assumptions, there remains several uncertain swing factors outside of our control that could represent risk to our outlook.
Before we open up the call for questions, I wanted to finish by explaining our plans to spend $30 million to $40 million on CapEx in fiscal 2026. Nearly all of this investment will be to support growth in our most attractive areas and particularly to reinforce our competitive mode in our [ Salty ] business. We have been very clear that there is a big opportunity to drive continued expansion in our [ Salty ] platform. Consumers love the products and retailers are leaning in with us. The investment in incremental and more flexible capacity enables us to support our long-term growth aspirations on the business and has an attractive payback. Strong cash flow generation is a hallmark of this company and next year will be no different. Our low debt levels and high cash conversion rate provides us the optionality to create meaningful long-term value for our shareholders in multiple ways, including by investing in capacity through share buybacks and via M&A.
For a comprehensive summary of our full year outlook, please see Slide 17 in our presentation. I want to commend our team for their hard work and tenacity to deliver the year and thank them for their support and collaboration in my first quarter as CFO. That concludes our prepared remarks. Thank you for your interest in our company. We are now available to take your questions.
[Operator Instructions] Our first question comes from the line of Peter Grom with UBS.
2. Question Answer
I wanted to just pick up on the comments around OWYN and kind of the product quality issues that you alluded to that impacted the quarter. Geoff, it sounds like these are now kind of in the rear view here. So just curious how you think about the path from here, maybe what you've seen more recently from the brand?
And then I guess just related, when you think about the full year sales guidance, what's the range of outcomes as it relates to OWYN based on what we know today?
I appreciate the questions. As we said on the call, our guidance for the year had always expected Q4 to slow a bit as we were lapping now own distribution wins. However, as mentioned, Q4 was impacted by product quality issue.
Related to the raw material sourcing for P Protein, a decision that was made prior to causing the acquisitions. More specifically, the P Protein was used in production during Q2, which did impact taste and texture on certain plots is the product age used in our estimate around 10%. But certainly material enough to impact consumption, and we certainly saw it come through in ratings and reviews. So as soon as we saw it, we jumped on it.
I will say the product 100% [indiscernible] within the OWYN allergen-free guideline. A small portion of product was impacted but enough to impact consumption and [ sharpened ] ratings and reviews. So what do we do about it? We have rectified the issue. We've got a newer and more stable formulation that is shipping, been shipping since August will be fully in market by fiscal Q2. Obviously, work with customers that were more disproportionately impacted. We increased trade to reach that trial, and we've increased marketing as part of that.
So we've dealt with the issue. It's mostly in the rear-vision mirror. There's probably a little bit of product out there, but that's why we're ramping up our investments in both trade and marketing. We continue to be extremely confident about the trajectory of this business. Strategically, it's expanded our presence in the Shake category. It reaches a new consumer, namely those looking for plant, clean label, feedback from retailers that this is a very distinct incremental segments. The integration has gone well. The synergies are on track. So this was -- this product issue. We've jumped on. We've dealt with it.
But as you do look -- as you look forward, I could not be more excited about the OWYN brand. It's the clear leader in clean. And as we sit today, even versus where we were -- when we completed the acquisition, you're seeing the increasing emergence of clean and consumers looking for clean options, and we certainly hear that for retailers. We see distribution upside on the core business. ACV is still low. As you look at brand awareness, with only aided awareness around 20%. That's why we're significantly increasing marketing. But this is not just on the core shakes business. I think as we mentioned on the call, the powders business, smallest portion today, but that's extremely high growth, very incremental.
And one of the things we did right at close of acquisition is we integrated the R&D teams. And we've been working -- you should assume we've been working on some exciting platform innovation that will build from there. So we saw the product issue. It impacted consumption. We jumped on it. We've addressed it. It's one of the reasons we increased investment just to really get that trial accelerated. Confident in the near term. Confident in the long term. And we're very pleased we acquired this business.
Our next question comes from the line of Steve Powers with Deutsche Bank.
Geoff, maybe picking up on where you started the conversation just on the low sugar, high protein macro trends. Assuming it is strong and enduring a structural shift as you discussed in your opening, and I don't -- I think there are a lot of reasons to believe it is. I guess, how do you handicap future competition? Maybe how have those views changed since you first arrived at Simply? And maybe a bit more detail how you've incorporated those allowances and forecasts into your business planning for fiscal '26?
If I could also, Chris, just picking up on where you wrapped up on capital allocation. Just given the dynamics that the business is contending with organically this year, both top line and cost related, as well as the decision to lean into CapEx a bit more to drive capacity. Just -- I was curious to see if there's any shift in your appetite or capacity to handle M&A.? It didn't sound like it from your comments, but I just wanted to clarify that.
Yes, I'll start, Steve. So to your question on the category and competition, this is a fantastic category, especially versus [ same-store ]. We're seeing now 5 years of high single, or low double-digit, growth. Category grew 13% and fiscal '25 and most of that was volume.
To your point on competition, it's not a surprise to us, but it's a very competitive space, particularly with those growth rates. What I will say is competition is not new to us. It's not a new dynamic for Simply. This category has always had a pretty high level of competition. We've always been able to do well. And it's the reason why we've invested so heavily in R&D, more recently bolstered our sales capabilities. We're category captain at retailers. And we've got a very agile and robust supply chain. I think M&A capabilities and the success we've had to play a role there.
As you think about the market, though, what I would point out is this -- one of the dimensions, Steve, is if the category is mainstreaming. It's not just limited anymore to the core traditional aisle. And as that category made streams, the addressable market for us is increasing substantially, which is why we're putting much more emphasis on getting out of our aisle. You can see that with chip, the displays we're getting merchandising, placement, secondary placement. And you can see that with the kind of products we're bringing to market more mainstream products like chips, like [indiscernible], like milk shake. So competition [ and ] dynamics, it's something we've always dealt with.
What I would say, and then I'll hand it over to Chris, is one of the things I've tried to do at Simply, is to up [indiscernible] output to better handle competition than we have in the past. So that's a more agile organization. Everything needs to be faster. Innovation needs to be faster to market. And marketing more digital, more always on. Our -- the decision-making that -- in the organization needs to be quicker. And this is something that we continue to work on as an organization as we face up to large-scale competitors and [ insurgent ] brands. It has to be part of the DNA of Simply Good, and we're committed to being an organization that combines the best of a scaled organization, with the mindset and agility of an insurgent operator. So I'll turn it over to Chris for the second part.
Thanks for the question. So just maybe just to set the table up there. In '25, just to remind you, we generated around $180 million of of cash from operations. We spent about $20 million in CapEx. We paid off $150 million in debt, and we bought back just over $50 million in shares. So as we look at that, this business continues to generate a lot of cash. We're starting our '26 with a very low net debt level, and we're very comfortable with our debt levels.
As we look at cash priorities, we're constantly evolving the best use of excess cash through a very structured framework. I would say our priorities have not changed. I would say that we look at these options really as and, and not [indiscernible] So we believe we can buy back shares. We believe we can invest in capital, we believe that if the right M&A opportunity comes along, we certainly have capacity to take that on. And we do look at M&A really through a constant lens. But in the short term, today, we look at our stock, we believe it's attractively valued. And we do think buyback represent a good opportunity for us to create long-term value.
That's just the one built on that with me from a CapEx perspective. As you think about our supply chain, Steve, we have an agile supply chain built to follow the consumer, which is a real asset for us. And that is part of our operating model. However, where we see an opportunity to invest, to strengthen a competitive mode, we will, which we've seen on chip. It's obviously the fastest growing part of our portfolio. And in that instance, we're willing to invest capital in partnership with a key strategic [indiscernible] to strengthen our competitive mode.
Our next question comes from the line of Robert Moskow with TD Cowen.
I just want to make sure I'm getting my math right, because the top line guidance was a thing that I think surprised us being lower, and [ 0 ] at the midpoint, the Atkins decline was not the surprise though. So given that, I think, Quest exited the year at 14% organic growth. And I think you even said that despite the problems on OWYN, you were also double digit there. Just mathematically, it looks like these two are going to be up high single digit in fiscal '26? I just want to make sure I got that math right.
And if so, are you forecasting a deceleration in Quest in '26? Is that also part of the guide along with OWYN's issues?
Yes. So I think you got the math roughly right. We're looking at Quest up really high single digits. OWYN will be in the double-digit range. And as we talked about on the call, Atkins is going to be down in consumption of about 20%. I think a couple of factors that -- perhaps we'll explain it. We have -- as we said on the call, we have a [indiscernible] increase that we've announced to trade. It's not in market yet. So when we [ show up ] the consumption numbers yet. So we do have a price elasticity effect that will be heaviest in the first half.
We're also assuming Atkins trade inventories will come down, driven by the distribution losses, which also helps explain a little bit the consumption versus net sales guidance. And then from a Quest perspective and OWYN perspective, if you look at the first half, they have some tough laps which we will have to work through, which is also why half 1 is a little bit lower, perhaps in the full year.
Our next question comes from the line of Jon Andersen with William Blair.
I've got several. But I'll just [indiscernible] on this. Maybe big picture. So Geoff, you mentioned earlier that -- and we're seeing this, obviously, too, that the category is mainstreaming to some extent. And as you pointed out, not necessarily constrained to the traditional aisle anymore as a result. So I guess my question is, if kind of the incremental household, or incremental consumer, for these types of products may not may not be in that traditional aisle, maybe more in a mainline aisle. How are you kind of approaching serving that customer, getting in front of that customer, interrupting that path to purchase? What kind of capabilities are you building if you invest in? How do you see the offering evolving and maybe moving around the store?
Yes, it's a good question. And we certainly see it if you just look at the increase in household penetration that Quest has experienced and OWYN has experienced. Quest up 19% and OWYN up close to a point. But you're right. So as the category has mainstreamed, as more and more consumers are looking for high-protein low-carb low-sugar options, they're looking for those options everywhere they shop. This is no longer just isolated to the more traditional [indiscernible]. In my opinion, this one of the biggest trends that are shaping this category, the mainstreaming of it. And that is why we -- over the last year, in particular, we've had a focused effort on expanding the physical availability of our products outside our aisle.
And so you will see secondary placement in mainline aisles, for example, chips. We've built a new retail team that is focused on driving displays across the store. We have made progress in new channels, particularly in the club space. We've invested in away from home. So I think universities, gem and airports. And what I would say is we're still in the early innings of that. That is one of the biggest growth vectors that we are focused against right now, and we've built the capabilities to do that.
The second piece to that is continuing to bring products that are more mainstream. Not just limiting our innovation to bars and shakes. And we've seen that with [ Quest Chips ], and we are in the early innings of [ Quest Chips ]. You've seen that with our Bake Shop launch, which has proven to be highly incremental. And that -- thinking more broadly with innovation and really tapping into what I think possibly the greater strength we have in our organization, which is our R&D team. And disrupting the macros of large snacking category.
So this is all in support of mainstream -- mainstreaming. Being available everywhere consumers shop and are looking for our products, and offering them a broader range of products that flip the macros on large unhealthy snacking categories.
Our next question comes from the line of Megan Clapp with Morgan Stanley.
I wanted to ask about Atkins. Geoff, I think you mentioned at this point, 75% of the brand sales come from SKUs in the top 2 quartiles of category velocity. Are you able to just tell us, are those SKUs growing at this point? Just trying to kind of square with the 20% decline you're expecting this year. Is that concentrated in kind of the lower-velocity SKUs? Are you still seeing some pressure within the core? And just how should we think about kind of that 10% to 15% in the bottom quartile? Is the bulk of the rationalization you think as we get through '26 is going to be behind you?
Yes. So -- yes. By far, the majority of the SKUs in the top 2 quartiles that represent 75% of sales are growing and healthy. The issue with Atkins as we've talked about in the past and on the call today, is it had a long tail SKUs that have underperformed. So the declines that have impacted Atkins have been by mostly driven by what you're seeing in the tail SKUs. And if you want to zero in on that 10% to 15% in the bottom quartile of the category. So that's where we're focused. That's where we're focused on rationalizing that tail and working with retailers to drive to a more optimal assortment and more sustainable assortment concentrated around the core.
Our next question comes from the line of Brian Holland with D.A. Davidson.
I wanted to ask about the selling and marketing line, which if we go back, depending on what starting point you want to use, come down about 300, 400 basis points as a percentage of sales. This obviously dates back to when Atkins was the only asset in the portfolio.
You talked this morning about leaning into the Owen brand despite the fact that you have margin pressures elsewhere, so you're taking an incremental hit to support that brand. You've had pretty clear success since you rolled out copy on Quest. So you have some proof of concept there back in early '24. And obviously, Atkins maybe is in a different place than it was if we go back 5 or 6 years, as far as what it requires from a support level.
But again, just thinking about where that number has come down? And thinking about modeling this business going forward, and the earnings power? Just wondering what the right level of brand support for this portfolio requires?
Yes. I'll take it and turn over to Chris. So we've been really pleased with the impact that advertising has had on Quest. Over the last couple of years, Quest is up substantially, up double digit in dollars. And the new campaign that we rolled out just over a year ago had an almost immediate impact on consumption. You could see it. I've been doing this for 25 years. And it's very rare to see such an immediate impact of advertising on the business. Just rolled out, released a 2.0 version of It's Basically Cheating, and the test scores there were terrific. So advertising works for us in the space.
As you think about how we're allocating our marketing spend? So Quest up double digits, significant advertising to support that business. And then as we look at the trajectory we see on OWYN, and the future we see on OWYN, and the customer conversations with OWYN, we think the right decision for us is to make a substantial increase in marketing in that business for the long term. You're right, where we have rationalized advertising is on Atkins as we've brought spending back in line with the size of that business and with the trajectory of that business.
And then just one more point on advertising, shifting more and more to digital, so social media, winning with influencers, retail media outlets. So there's also a mix shift within our marketing expense.
And then the only thing I'd really add to Geoff's comments is, as we find opportunity through the year to invest more in marketing, we absolutely will. And that's definitely a priority for us is to set ourselves up well for future continued sustained growth.
Our next question comes from the line of Kaumil Gajrawala with Jefferies.
Wanted to dig into something that you talked about related to the OWYN product issue on -- I don't know if you said it was reviews or if it was something on social. But maybe if you could just talk a little bit about how you might be addressing [ only ] from a brand issue, maybe the product quality issues are resolved. But what impact did it have on the brand? You've talked a lot about sort of incremental marketing, but maybe what specifically are you doing? And perhaps what is the narrative, or has the narrative been impacted in any way from this issue?
Yes. So let me just reinforce that the product issue is largely behind us. We've been shipping new, more stable product since August. And that the impact was less than 10% product that notwithstanding, it did have an impact on consumption and ratings and reviews, which did drop.
The product and market was a little more concentrated in a few channels. We've overinvested in those channels to get the ratings back up, to drive trial. And I'm confident that this business will be very quickly back to where it was. And to underscore that even with the issue in market, the brand is growing mid-teens.
As you look long term, again, we have tremendous confidence in this business. The clean movement is really accelerating. We're hearing it from retailers. We're planning on making significant investments in marketing to drive awareness from a pretty low base. We see distribution opportunities in front of us. And I'm really excited about disruptive innovation we'll be bringing out within the next year on the business.
Our next question comes from the line of John Baumgartner with Mizuho Securities.
Geoff, you mentioned the price increase that's forthcoming at retail. How are you thinking about elasticity on the back of that? Should it be higher than history given the health of the consumer?
And related to that, if you can just please clarify the focus on the entry prices for Atkins bars? Are you finding that absolute prices today after the last few price increases taken, have prices become an impediment to consumption among existing buyers? Or is this more of a mix shift, whereas as the category mainstreams, new households come in, maybe more middle-income consumers, does it require lower prices to attract new households?
Yes. So on pricing, we have announced pricing on portions of the portfolio kind of in the mid- to high single-digit range. We expect elasticity to be in line with what we would historically see. But we have seen that. Initially, the elasticity impact may be a little higher and then tends to burn off, which is, as you heard Chris mention earlier, it's one of the drivers of our first half, second half inflection.
To your question on have we seen pricing dampen growth? Absolutely not. This has proven to be a category that is pretty resilient to pricing in the long run. You don't get to 5 years of high single, low double-digit growth if that's happening. So this seems to be a category that's very resilient to pricing in the long run.
To your question on the Atkins [indiscernible] entry price point. We -- the Atkins products, our entry price point was at a 5 pack, where the majority of competition was in a 4 pack, and that just created a higher absolute price on shelf as we did our research, we identified an opportunity to come out with a 4 pack at a lower absolute price. And it's early, too early to call it. We are certainly seeing the entry price point bring in new users to the brand.
Our next question comes from the line of Matt Smith with Stifel.
Just wanted to come back to the comments on sales expectations by brand and phasing. First, Atkins consumption is expected to be around -- down around 20%. You also called out that inventories may move lower, given some of the distribution losses. Do you have an estimate for where you would expect that inventory headwind to come in?
And second, you called out a tough merchandising comparison in the second quarter, specifically for Quest. Is that related to lapping the large club event last year? And can you provide an update on how your distribution opportunity, or expansion is going within the club channel? I think you had some positive takeaways from a large event last year and you were going through an evaluation period. Curious how you're continuing to see that evolve?
Yes. Just address the [indiscernible] Atkins. Yes, we do see Atkins. We think net sales will be down more than 20% in the first half, which is, as you rightly pointed out, is the consumption decline we called out on the call earlier, as well as the distribution impact. That distribution comes down, obviously, will be load at retail for those points. So that will be coming down more than 20% in the first half and a bit better in the second half.
In terms of Quest, yes, there is a -- we are lapping some heavy merchandising in Q2 last year. Also remember that as we just talked about, we have price elasticities that will be really an effect -- full effect in the second quarter, which is an impact. But we're very happy with where especially the [ Salty ] business is running, obviously still very strong and lots of momentum left on our business.
Yes. I can pick up the question on Quest. You're right. Last year, during New Year -- New Year, we had a test a large club customer where we have really not had any business at all. Quest performed very well. And we've had continued conversations with that customer about how to roll that out. And the way it looks like it's going to phase at this point is that it will be more spread out throughout the year, more consistent distribution versus having all of that distribution as we did in January, February and a little bit into March. So that that's where we're landing right now.
We continue to work with that customer and really excited about the new relationship we're building with that customer. It does represent for Simply significant white space from a distribution perspective. And just more specifically back to the Quest [ chips ] and the lapse is the spreading effect of that volume that will now be more spread throughout the rest of the year as the process is concentrated.
Our last question comes from the line of Jim Salera with Stephens, Inc
I wanted to circle back on the margin component of the guidance. Are you guys able to remind us what percentage of [ COGS Poco ] represents? And if you can give any commentary around kind of the layering of your hedges? There's been a lot of volatility in cocoa. So we're just trying to get a sense if prices continue to fall, could there be gross margin relief maybe earlier than 3Q, or to a greater magnitude in 3Q? Just any comments there would be helpful.
Yes. I mean in terms of cocoa, just to remind you, cocoa is -- we do buy cocoa directly. We also have cocoa as a significant component of our coatings layers and inclusions. As a percentage of our overall cost is in the mid-single-digit range. And then from a coverage perspective, which I think was the other part of your question, we do have -- we are covered out quite far into the year, certainly first half, to remind you, I think we talked about it on the call. We are covered in the first half of the year at a fairly high prices that we were -- we took as we were just ensuring supply.
As we get into Q3, we'll be transitioning into much lower cost and actually deflationary year-over-year. And then as we go into Q4, that will take even more into effect, lower prices, which will then carry into FY '27.
And then the only other point I would say on margins as you started with a more general point is we have pricing. As we said, really starting in Q1, really mostly in fiscal November and rebuilding into Q2. Productivity, we said -- we've always said is on a lag, and that will be really kicking in fully in the second half. So that's why we have pretty good confidence if you look at our costs. Costs are well understood through most of the fiscal year. Pricing is building, productivity is building. And we do see, even in the spot prices, specifically on cocoa, even further opportunity again as we think about Q4 and into '27.
The spot has come down quite considerably in the last couple of months, and certainly considerably from the position we have today through the first half.
We have reached the end of the question-and-answer session. I'll now turn the floor back to Geoff Tanner for closing remarks.
I just want to thank everyone for their participation today on the call. If you got any follow-up, please feel free to reach out to Josh, and we look forward to speaking to you in January.
Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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Simply Good Foods Co — Q4 2025 Earnings Call
Finanzdaten von Simply Good Foods Co
Umsatz
Der Umsatz stellt die Summe aller Einnahmen eines Unternehmens z. B. für dessen Produkte oder Dienstleistungen dar.
Umsatz (TTM) einfach erklärtDirekte Kosten
Direkte Kosten sind die Kosten, die direkt im Zusammenhang mit der Herstellung des Produkts oder der Dienstleistung entstehen.
Bruttoertrag
Der Bruttoertrag gibt an, wie viel vom Umsatz nach Abzug der direkten Herstellkosten im Unternehmen verbleibt. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der Bruttomarge (engl. Gross Margin).
Brutto Marge einfach erklärtVertriebs- und Verwaltungskosten
Die Vertriebs- & Verwaltungskosten (engl. Selling, General & Administrative expenses, kurz SG&A) beinhalten alle Aufwände für Marketing und den Verkauf sowie die allgemeine Verwaltung des Unternehmens.
Forschungs- und Entwicklungskosten
Die Forschungs- und Entwicklungskosten (engl. research & development costs, kurz R&D) geben Auskunft darüber, wie viel das Unternehmen in die Forschung und die Entwicklung seiner Produkte investiert. Vor allem prozentual vom Umsatz und im Vergleich zu direkten Wettbewerbern sind die Kosten interessant.
EBITDA
Das EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ist der Gewinn des Unternehmens vor Zinsen, Steuern und Abschreibungen. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der EBITDA-Marge.
Abschreibungen
Abschreibungen stellen Wertminderungen von Vermögensgegenständen des Unternehmens dar (z.B. durch Abnutzung von Maschinen).
EBIT (Operatives Ergebnis)
Das EBIT (engl. Earnings Before Interest and Taxes) ist der Gewinn des Unternehmens vor Zinsen und Steuern, das auch als operatives Ergebnis bezeichnet wird. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von
der EBIT-Marge.
Nettogewinn
Der Nettogewinn stellt den Gewinn oder Verlust nach Abzug aller Kosten dar.
Nettogewinn einfach erklärtaktien.guide Premium
| Mai '26 |
+/-
%
|
||
| Umsatz | 1.392 1.392 |
4 %
4 %
100 %
|
|
| - Direkte Kosten | 937 937 |
3 %
3 %
67 %
|
|
| Bruttoertrag | 456 456 |
16 %
16 %
33 %
|
|
| - Vertriebs- und Verwaltungskosten | 243 243 |
17 %
17 %
17 %
|
|
| - Forschungs- und Entwicklungskosten | - - |
-
-
|
|
| EBITDA | 213 213 |
15 %
15 %
15 %
|
|
| - Abschreibungen | 18 18 |
6 %
6 %
1 %
|
|
| EBIT (Operatives Ergebnis) EBIT | 195 195 |
17 %
17 %
14 %
|
|
| Nettogewinn | -199 -199 |
237 %
237 %
-14 %
|
|
Angaben in Millionen USD.
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Firmenprofil
Die Simply Good Foods Co. beschäftigt sich mit der Entwicklung, der Vermarktung und dem Verkauf von nahrhaften Lebensmitteln und Snackprodukten. Zu ihren Produkten gehören Nährstoffriegel, trinkfertige Shakes, Snacks, Süßwaren und Tiefkühlmahlzeiten unter den Marken Atkins, SimplyProtein, Atkins Harvest Trail und Atkins Endulge. Das Unternehmen wurde am 30. März 2017 gegründet und hat seinen Hauptsitz in Denver, CO.
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| Hauptsitz | USA |
| CEO | Mr. Scalzo |
| Mitarbeiter | 328 |
| Gegründet | 2017 |
| Webseite | www.thesimplygoodfoodscompany.com |


