Simply Good Foods earnings weakened in fiscal 2026 as sales fell and impairment charges contributed to a full-year loss. The Quest, Atkins and OWYN owner said on October 27 that it expects further declines in sales and adjusted EBITDA in fiscal 2027, despite an anticipated recovery in gross margin.
Key Takeaways
- Fiscal 2026 sales fell 6.5% to $1,356.5 million, and the company reported a $155.9 million net loss.
- Fourth-quarter net income improved to $30.5 million, although sales and adjusted EBITDA declined.
- Management expects fiscal 2027 sales to fall 13% to 17% and adjusted EBITDA to decline 9% to 14%.
Simply Good Foods earnings reflect weaker brand sales
For the 52 weeks ended August 29, 2026, net sales declined from $1,450.9 million a year earlier. Atkins sales fell 20.9% and OWYN sales dropped 9.7%, partly offset by 0.7% growth at Quest.
The company reported a net loss of $155.9 million, compared with net income of $103.6 million in fiscal 2025. Before the fourth quarter, it recorded $331.0 million in non-cash impairment charges related to goodwill and the Atkins and OWYN brand intangible assets.
Adjusted EBITDA, a non-GAAP measure, fell 18.8% to $225.9 million. Operating cash flow was about $181.0 million, compared with $178.5 million a year earlier. The company ended fiscal 2026 with $138.4 million in cash and $350.0 million in outstanding term-loan principal.
| Item | Details |
|---|---|
| Fiscal 2027 net sales | Expected to decline 13% to 17% year over year |
| Fiscal 2027 adjusted EBITDA | Expected to decline 9% to 14% year over year |
| Fiscal 2027 GAAP gross margin | Expected to increase 250 to 300 basis points year over year |
| Fiscal 2027 first-quarter net sales | Expected to decline 19% to 22% year over year |
| Fiscal 2027 first-quarter adjusted EBITDA | Expected to decline 28% to 33% year over year |
Fourth-quarter profit rises despite lower sales
Fourth-quarter sales fell 9.7% to $333.3 million from $369.0 million. The company attributed the decline largely to softer retail takeaway and distribution pressure tied to sales velocity. Atkins and OWYN net sales fell 14.9% and 20.6%, respectively.
Net income was $30.5 million, compared with a $12.4 million loss a year earlier. Adjusted EBITDA fell to $57.5 million from $66.2 million, while adjusted diluted earnings per share slipped to $0.44 from $0.46. Gross margin narrowed by 30 basis points to 34.0%, largely because of higher input costs.
Management forecasts further declines in fiscal 2027
The company expects its first-quarter sales and adjusted EBITDA declines to be steeper than the ranges forecast for the full fiscal year. Its outlook assumes economic conditions, consumer purchasing behavior and prevailing tariff rates remain generally consistent throughout the year.
Chief Executive Joe Scalzo said the company plans to reinvest part of its expected margin recovery in its brands. He expects performance to improve during the year as marketing investments take hold, the volume impact of pricing eases and year-over-year comparisons become more favorable.
Next milestone
The company scheduled a results conference call for October 27, 2026, at 8:30 a.m. Eastern time.
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