Simply Good Foods reported first‑quarter 2026 results on January 8, 2026, showing net sales of $340.2 million—flat year‑over‑year and a 0.3% decline. The company’s gross profit was $109.9 million, giving a gross margin of 32.3%, a 590‑basis‑point drop from the same period last year. Operating expenses were $72.3 million, and net income fell to $25.3 million, resulting in a GAAP diluted earnings per share of $0.26.
The adjusted diluted EPS of $0.39 beat the consensus estimate of $0.36, a $0.03 or 8.3% outperformance. In contrast, the company’s revenue of $340.2 million missed the higher consensus estimates of $346.1 million and $337.9 million, though it was slightly above the $335.93 million estimate. The GAAP EPS miss reflects the impact of higher input costs and the first full quarter of tariffs.
Segment performance was uneven: Quest sales grew 9.6% (12% consumption growth), driving a 12% increase in revenue contribution; OWYN experienced 17.8% consumption growth, adding 8% to net sales; Atkins sales declined 19.3%, pulling the overall mix toward lower‑margin products.
Margin compression was driven by elevated input inflation—particularly cocoa and whey—and a $4 million tariff impact, roughly 120 basis points of margin erosion. CFO Chris Beeler noted that “inflationary input costs—especially cocoa—and the first full quarter of tariffs, which totaled about $4 million, have materially compressed our gross margin.”
Management reaffirmed the fiscal‑year 2026 outlook, guiding for net sales growth of 0% to 2% (previously –2% to +2%) and a gross margin decline of 100–150 basis points. CEO Geoff Tanner said, “Our first‑quarter performance came in modestly ahead of our expectations. With our initiatives to accelerate our top line and rebuild our margins in the second half on track, we are reaffirming our full‑year outlook.”
Investor reaction was mixed: the adjusted EPS beat generated enthusiasm, but the revenue miss and margin compression tempered the overall sentiment. The company also announced a $200 million increase to its share‑repurchase program, signaling confidence in its financial position.
Strategically, Simply Good Foods is concentrating on its high‑growth Quest and OWYN brands, while managing the integration costs of OWYN and the decline in Atkins. The company is pursuing productivity initiatives and pricing actions to support margin recovery in the second half of the fiscal year.
Overall, the first‑quarter results illustrate a company navigating headwinds from input costs and tariffs while leveraging strong demand in its premium brands. Management’s confidence in the full‑year outlook and the adjusted EPS beat suggest that the company remains on a path to recover margins and sustain growth.
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