Simply Good Foods Q2 2025: Contradictions in Atkins Sales, Gross Margins, and OWYN Growth

These are the key contradictions discussed in The Simply Good Foods Company's latest 2025Q2 earnings call, specifically including: Atkins' sales and promotional strategy, gross margin expectations, OWYN's growth outlook, Atkins' sales guidance and competitive environment, Quest's growth expectations and marketing strategy, and Atkins sales guidance and investments:



Quest Brand Growth and Expansion:
- Quest's retail takeaway grew by 13% in Q2, with its Salty Snacks platform doubling manufacturing capacity, leading to a 45% increase in the quarter.
- The growth was driven by leading with innovation, expanding physical availability, and increasing brand awareness, especially with the successful national test at a key club customer.

Atkins Brand Challenges and Restructuring:
- Atkins' consumption declined 10%, primarily due to not repeating significant year-ago volume driving displays and bonus pack programs at several key customers.
- The company is partnering with retailers to shift display support into Quest and OWYN, which will help offset declines, but a smaller physical footprint is expected moving forward.

OWYN Acquisition and Growth:
- OWYN's retail takeaway rose 52%, with a distribution increase of 22%, continuing to grow velocity despite lapping significant distribution gains from a year ago.
- Growth is attributed to emerging as the clear plant-based leader, low awareness levels, and effective sales force driving distribution growth.

Financial Performance and Margin Adjustment:
- The company's net sales increased 15.2%, with adjusted EBITDA rising 17.6%, driven by volume growth and the inclusion of the OWYN acquisition.
- Despite higher inflationary pressures, the company is managing costs through productivity initiatives and expects to offset costs related to recently announced tariffs.