Simply Good Foods 2026 Q1 Earnings Revenue Slight Decline, Net Income Falls 33.7% as Guidance Affirmed

Simply Good Foods (SMPL) reported fiscal 2026 Q1 earnings on Jan 8, 2026, with total revenue declining 0.3% to $340.20 million, slightly below the prior year. While the company reaffirmed full-year guidance, EPS and net income fell sharply, reflecting margin pressures and strategic cost adjustments.

Revenue

The company’s revenue dipped to $340.20 million in Q1 2026, a 0.3% decrease from $341.27 million in Q1 2025. Despite this, the figure exceeded Wall Street estimates, indicating resilience in core operations.

Earnings/Net Income

Simply Good Foods’s EPS declined 31.6% to $0.26, down from $0.38 in the prior year, while net income fell 33.7% to $25.27 million. The drop underscores margin compression and elevated input costs, though the company has maintained profitability for nine consecutive years, highlighting operational stability.

Price Action

The stock price dropped 4.15% during the latest trading day but rebounded 9.09% month-to-date, reflecting mixed investor sentiment.

Post-Earnings Price Action Review

The strategy of buying Simply Good Foods shares after a revenue drop quarter-over-quarter on the financial report release date and holding for 30 days resulted in a significant underperformance. The strategy had a CAGR of -14.82% and an excess return of -114.19%, significantly below the benchmark return of 76.86%. The strategy also had a maximum drawdown of 0.00%, indicating that it did not experience any losses during the holding period, but the overall performance was lackluster.

CEO Commentary

Geoff Tanner, President and CEO, emphasized 2% consumption growth driven by Quest and OWYN, offset by Atkins declines. He reiterated confidence in the long-term plan, reaffirming full-year net sales and adjusted EBITDA guidance. Strategic priorities include margin rebuilding via pricing actions, productivity programs, and cost savings from cocoa supply contracts.

Guidance

The company reaffirmed FY2026 net sales growth guidance of -2% to +2%, with adjusted EBITDA expected to decline -4% to +1%. Q2 net sales are projected to decline 3.5%–4.5%, with gross margin declines narrowing to ~300 bps. Full-year gross margins are anticipated to decline 100–150 bps, with Q4 expansion of ~200 bps.

Additional News

The Simply Good Foods Company announced a $200 million increase to its share repurchase program, accelerating buybacks and repurchasing 7% of its stock year-to-date. CEO Geoff Tanner highlighted OWYN’s 18% consumption growth and Quest’s 12% net sales increase, driven by innovation and expanded distribution. However, Q2 challenges include a key club customer shift and OWYN product quality issues, with management expressing optimism about second-half recovery and margin expansion.

The company’s strategic focus on margin rebuilding and brand innovation, coupled with aggressive share repurchases, positions it to navigate near-term headwinds while capitalizing on long-term growth in the nutritional snacking market.