Simply Good Foods: A Strong Start to Fiscal 2025 with OWYN Acquisition Boosting Growth

Simply Good Foods Company (Nasdaq: SMPL) kicked off fiscal year 2025 with a strong first quarter, driven by the acquisition of Only What You Need, Inc. (OWYN) and the continued growth of its nutritional snacking category. The company reported net sales of $341.3 million, up 10.6% from the year-ago period, and adjusted EBITDA of $70.1 million, a 13.1% increase. Here's a closer look at the key takeaways from the Q1 2025 earnings call.

OWYN Acquisition Drives Growth

The acquisition of OWYN, completed in June 2024, contributed significantly to Simply Good Foods' growth in the first quarter. OWYN net sales were $32.3 million, slightly greater than estimates, and helped drive the company's overall net sales growth. The inclusion of OWYN also resulted in a 90 basis points increase in gross margin to 38.2% and strong adjusted EBITDA growth.

Nutritional Snacking Category Momentum

The nutritional snacking category continued to gain momentum in the first quarter, with growth of about 12% driven by volume. All major sub-segments, including bars, shakes, and chips, increased during the quarter. This growth is attributed to the increasing relevance and mainstreaming of high protein, low sugar, and low carb foods.

Quest Brand Performance

Quest, one of the pioneers in the mainstreaming of high protein, low sugar, low carb foods, saw strong growth despite some chip stockouts early in the quarter. The Quest brand has created a $300 million retail sales business in a short amount of time and has an impressive pipeline of new products that represent a sustained source of growth for years to come.

Fiscal Year 2025 Outlook

Simply Good Foods reaffirmed its fiscal year 2025 outlook, with net sales expected to increase 8.5% to 10.5% and adjusted EBITDA expected to increase 4% to 6%. The company also noted that the fifty-third week in fiscal year 2024 is about a 2-percentage point headwind to both net sales and adjusted EBITDA growth in fiscal year 2025.



In conclusion, Simply Good Foods' strong start to fiscal 2025, driven by the OWYN acquisition and the continued growth of the nutritional snacking category, positions the company well to deliver on its objectives. With three uniquely positioned brands, world-class innovation and sales capabilities, and an outsourced co-manufacturing business model, Simply Good Foods is well-positioned to drive sustained growth and increased shareholder value.