Q3 2025 Simply Good Foods Co Earnings Call Transcript
Key Points
- Net sales increased by 14% year over year, driven by the acquisition of OWYN and 4% organic growth.
- Quest brand delivered double-digit retail takeaway and net sales growth, with consumption up 11% and household penetration increasing.
- OWYN's retail takeaway increased by 24% in Q3, with strong contributions across channels.
- The company repaid nearly all of the $250 million borrowed for the OWYN acquisition within a year.
- Cash flow generation remains strong, with significant debt repayment and share repurchases enhancing financial flexibility.
- Atkins brand experienced a 13% decline in consumption due to distribution losses and reduced merchandising events.
- Gross margin declined by 350 basis points due to elevated input costs, particularly cocoa and whey.
- Inflation and tariffs are expected to continue impacting margins, with mitigation efforts taking time to realize.
- Atkins is expected to face continued double-digit declines in fiscal 2026 due to distribution cuts.
- The company anticipates a low double-digit decline in adjusted EBITDA for Q4, excluding the extra week.
Greetings. Welcome to Simply Good Foods Company's third quarter fiscal year 2025 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. Joshua, you may begin.
Thank you, operator. Good morning, and welcome to the Simply Good Foods Company's third quarter fiscal year 2025 earnings call for the 13-week period ended May 31, 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 at approximately 7 AM Eastern Time. 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 www.thesimplygoodfoodscompany.com.
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