Simply Good Foods has lowered its Atkins brand owner’s outlook for sales and profits, with a “turnaround” plan launched as it slumps to losses.
The most publicized change made in today’s (9 April) second quarter results announcement, which includes an impairment charge, is in adjusted EBITDA, which the US business now expects to decline by 19% to 22% to a range of $217m to $225m.
In January, when the maker of Quest and Only What You Need (OWYN) products announced its first-quarter earnings, 2026 revenue guidance was reaffirmed as likely to rise 1% to 4%. No final figures were given at the time.
Meanwhile, Colorado-based Simply Good Foods lowered its outlook for net sales, which are now expected to fall 7-10% compared to a January forecast of a 2% to 2% increase. The range is expected to be $1.31bn to $1.35bn.
The company also saw a sharp decline in gross margins, which saw it decline by 300 to 350 basis points compared to a decline of 100-150 basis points earlier in the year.
“I want to make it clear that we are not satisfied with our current performance,” said president and CEO Joe Scalzo in a statement today (9 April) as he reported results on 28 February.
“Our recent results did not meet our expectations and we have taken immediate and important steps to transform our financial performance and market performance.”
Simply Good Foods reported a second quarter net loss of $159.7m compared to a profit of $36.7m last year.
Earnings per share also declined, coming in at $1.73 per diluted share compared to a profit of $0.36. Adjusted diluted EPS remained in the black at 45 cents, little changed from 46 cents in the corresponding period.
Scalzo posted his store as net sales and adjusted EBITDA also fell.
“The long-term foundations of our division, our portfolio and the strength of our company are compelling, but in the near future our organization must focus on three important things, strengthening the economy of our business by improving our cost structure and margins, ensuring consistency in our choices that lead to transparency and organizational efficiency, and rebuilding product investments to improve market quality,” said exenet.
Net sales in the three months fell 9.3% to $326m, while adjusted EBITDA fell 18.3% to $55.5m.
The decline in sales was led by Atkins and OWYN brands, which each saw declines of 26.6% and 16.8%. Quest offset the slide, posting growth of 0.3%.
“The company’s sales success was largely driven by poor inventory compared to what we experienced in the first quarter,” the announcement read.
“Quarter over quarter, Quest consumption was impacted by slower speeds in chips and bars. OWYN consumption decreased year-over-year due to the prior year’s promotional timing and poor speeds, including expanded new distribution.”
Simply Good Foods recorded a non-cash charge of $249m related to Atkins and OWYN products.
“This significant impairment is the result of a challenging fiscal year 2026 and revised projections for future revenue,” the company said.
“Simply Good Foods cuts outlook, drops to second-quarter loss” was originally published by Just Drinks, a product owned by GlobalData.
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