Highlights

  • Fiscal 2026 net sales fell 6.5% to US$1.36 billion, with Atkins down 20.9% and Quest up 0.7%.
  • A US$331.0 million non-cash Impairment on Goodwill and Atkins and OWYN intangibles produced a US$155.9 million annual net loss.
  • Fourth-quarter Net Income reached US$30.5 million, or US$0.34 per diluted share, on net sales of US$333.3 million.
  • Management expects fiscal 2027 net sales to decline 13% to 17% and adjusted EBITDA to fall 9% to 14%.

Management at The Simply Good Foods Company (NASDAQ:SMPL) has described fiscal 2027 as a challenging but important year in its turnaround. Releasing full-year results on 27 October 2026, the maker of Quest, Atkins and OWYN nutrition products forecast a double-digit sales decline for the coming year while projecting higher gross margins as it puts more money into Brand marketing.

The outlook capped a fiscal 2026 that included a sizable impairment, restructuring and a heavy share repurchase program.

Atkins Weakness Weighs on Fiscal 2026 Sales

For the 52 weeks ended 29 August 2026, net sales declined 6.5% to US$1,356.5 million from US$1,450.9 million. Atkins sales fell 20.9% and OWYN dropped 9.7%, while Quest grew 0.7%. Total retail takeaway was down about 5%, with Atkins down about 22% and Quest up about 3%.

In the fiscal fourth quarter, net sales fell 9.7% to US$333.3 million. Atkins declined 14.9% and OWYN 20.6%. Gross Margin for the quarter was 34.0%, down 30 basis points on higher input costs, and adjusted EBITDA fell 13.2% to US$57.5 million.

Impairment Turns the Year to a Loss

The company recorded a US$331.0 million non-cash impairment charge on goodwill and the Atkins and OWYN intangible assets, reflecting current performance, lower Revenue projections and declines in its stock price. As a result, fiscal 2026 brought a net loss of US$155.9 million, or US$1.69 per diluted share, compared with net income of US$103.6 million a year earlier.

Annual gross margin narrowed by 360 basis points to 32.6%, partly because of US$6.5 million of one-time OWYN integration costs tied to product quality issues and US$5.7 million of restructuring costs. Adjusted diluted EPS was US$1.70, down from US$1.92, and adjusted EBITDA fell 18.8% to US$225.9 million. Fourth-quarter GAAP net income was US$30.5 million, compared with a loss a year earlier.

Operating cash flow was about US$181.0 million. Simply Good Foods bought back US$213.3 million of stock during the year, up from US$50.9 million, and ended with US$138.4 million in cash and US$350.0 million of term Loan principal, a net Debt to adjusted EBITDA ratio of 0.9x.

Fiscal 2027 Outlook Points to a Reset Year

For fiscal 2027, management expects net sales to decline 13% to 17% and adjusted EBITDA to drop 9% to 14%, while GAAP gross margin is projected to improve by 250 to 300 basis points. For the first quarter, the company expects net sales to fall 19% to 22% and adjusted EBITDA to decline 28% to 33%. The outlook assumes broadly stable economic conditions, consumer purchasing and Tariff rates.

Chief Executive Joe Scalzo said the company plans to reinvest part of its margin recovery in brand Marketing and expects performance to improve through the year as that marketing takes hold and comparisons ease. Net interest expense is projected at US$18 million to US$20 million, with capital expenditures of US$15 million to US$20 million.