The Simply Good Foods Company (NASDAQ:SMPL) reported second-quarter results on Thursday that included adjusted earnings per share of $0.45, exceeding analyst expectations of $0.41. However, revenue fell short of forecasts and the company cut its full-year guidance amid ongoing brand performance challenges.
Shares dropped 12.21% in premarket trading following the announcement.
Revenue for the quarter ended February 28 totaled $326.0 million, below the consensus estimate of $346.6 million and down 9.4% from $359.7 million in the same period a year earlier. The decline was largely driven by steep drops in the Atkins brand, which fell 26.6%, and OWYN, down 16.8%, while Quest posted modest growth of 0.3%.
CEO Joe Scalzo addressed the weak performance, stating, “I want to make it quite clear that we are not satisfied with our current performance. Our recent results have not met our expectations, and we have taken immediate and fundamental actions to turnaround both our financial performance and our in-market performance.”
For the third quarter, the company expects revenue between $329 million and $338 million. The midpoint of $333.5 million is significantly below the analyst consensus estimate of $379.8 million.
Simply Good Foods also reduced its fiscal 2026 revenue outlook, now projecting between $1.31 billion and $1.35 billion. The midpoint of $1.33 billion falls well short of the $1.44 billion consensus forecast.
Gross margin declined by 460 basis points to 31.6%, as rising costs—particularly for cocoa—as well as tariffs weighed on profitability.
The company also recorded a $249.0 million non-cash impairment charge tied to the intangible assets of the Atkins and OWYN brands. As a result, Simply Good Foods reported a net loss of $159.7 million, or -$1.73 per share, compared with net income of $36.7 million in the same quarter last year.
Adjusted EBITDA decreased 18.4% to $55.5 million from $68.0 million a year earlier. For fiscal 2026, the company now expects adjusted EBITDA in the range of $217 million to $225 million, representing a year-over-year decline of roughly 19% to 22%.