Simply Good Foods slashes outlook, slips to second-quarter loss

Simply Good Foods has slashed the Atkins marque owner’s outlook for income and profits, with a “turnaround” program acceptable successful question arsenic it slipped to a loss.

The astir pronounced displacement made successful the second-quarter results announcement contiguous (9 April), which besides included an impairment charge, is successful adjusted EBITDA, which the US concern present envisages falling 19% to 22% to a scope of $217m to $225m.

In January, erstwhile the shaper of Quest and Only What You Need (OWYN) products announced its first-quarter performance, the fiscal 2026 guidance was reaffirmed arsenic apt to beryllium up 1% to down 4%. No extremity figures were provided astatine that stage.

Meanwhile, Colorado-based Simply Good Foods has lowered its outlook for nett sales, present expected to beryllium down 7-10% compared to the January forecast of up 2% to a diminution of 2%. The scope is expected astatine $1.31bn to $1.35bn.

The institution is besides much downbeat connected gross margins, which it sees dropping 300 to 350 ground points versus the 100-150-point retreat astatine the commencement of the year.

“I privation to marque it rather wide that we are not satisfied with our existent performance,” president and CEO Joe Scalzo said successful today’s (9 April) commentary arsenic helium reported the results to 28 February.

“Our caller results person not met our expectations and we person taken contiguous and cardinal actions to turnaround some our fiscal show and our in-market performance.”

Simply Good Foods reported a nett nonaccomplishment for the 2nd 4th of $159.7m versus a $36.7m nett a twelvemonth earlier.

Share net besides deteriorated, coming successful astatine a $1.73 nonaccomplishment per diluted stock compared to a affirmative $0.36. Adjusted diluted EPS remained successful the achromatic astatine 45 cents, small changed from 46 cents successful the corresponding period.

Scalzo acceptable retired his stall arsenic nett income and adjusted EBITDA besides fell.

“The semipermanent fundamentals of our category, our portfolio and our institution capabilities are compelling, but successful the near-term our organisation indispensable absorption connected 3 priorities, which are strengthening our concern exemplary economics by improving our outgo operation and margins, ensuring consistency successful our strategical choices driving organisational clarity and efficiency, and rebuilding marque concern down superior selling execution to thrust household penetration,” helium said.

Net income implicit the 3 months fell 9.3% to $326m, portion adjusted EBITDA was down 18.3% astatine $55.5m.

The diminution successful income was led by the Atkins and OWYN brands, which each notched up a driblet of 26.6% and 16.8%. Quest offset the slide, eking retired maturation of 0.3%.

“The company's nett income show was mostly driven by mediocre retail takeaway comparative to what we experienced successful the archetypal quarter,” the announcement read.