Q1 2026 Simply Good Foods Co Earnings Call Transcript
Key Points
- The Simply Good Foods Co (SMPL) reported a 2% growth in Q1 consumption, driven by double-digit growth from Quest and OWYN, which together accounted for 71% of net sales.
- The company is executing well on initiatives to drive top-line growth and rebuild gross margins, with recent pricing actions aligning with expectations.
- A robust productivity program is delivering results, taking costs out of the system and ensuring a multiyear pipeline of initiatives.
- The Simply Good Foods Co (SMPL) has locked in incremental supply of key inputs like cocoa at more favorable prices, which will benefit future financials.
- The company has aggressively repurchased over 7% of its common stock since the start of the fiscal year, reflecting confidence in its long-term growth prospects.
- Atkins brand consumption declined by 19%, driven by lost distribution at several key retailers, which accounted for two-thirds of the headwind.
- Gross profit declined by 15.8% due to elevated inflationary costs, notably cocoa, and tariffs, impacting gross margin by 590 basis points.
- OWYN faced lingering product quality issues, affecting retailer inventory levels and resulting in a significant gap between net sales and consumption.
- The company expects Q2 net sales to decline by 3.5% to 4.5%, with adjusted EBITDA also expected to decline double digits due to elevated wage costs.
- The Simply Good Foods Co (SMPL) is facing increased competition in the RTD space, which could impact growth within this part of the portfolio.
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. 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.
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