Simply Good Foods’ third quarter was met with a significant negative market reaction following results that showed a year-on-year revenue decline and non-GAAP profit below Wall Street consensus. Management cited persistent challenges in its Atkins brand, which lost shelf space at major retailers and saw declining sales, while inflation, particularly in cocoa costs and tariffs, further pressured margins. CEO Geoff Tanner acknowledged the magnitude of these headwinds, noting, “This process will better align Atkins shelf space with sales in support of a sustainable business powered by a strong core assortment.”
Is now the time to buy SMPL? Find out in our full research report (it’s free for active Edge members).
Simply Good Foods (SMPL) Q3 CY2025 Highlights:
- Revenue: $369 million vs analyst estimates of $367.3 million (1.8% year-on-year decline, in line)
- Adjusted EPS: $0.46 vs analyst expectations of $0.47 (3.1% miss)
- Adjusted EBITDA: $66.24 million vs analyst estimates of $69.08 million (17.9% margin, 4.1% miss)
- Operating Margin: -3.2%, down from 12.7% in the same quarter last year
- Market Capitalization: $1.97 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Simply Good Foods’s Q3 Earnings Call
- Peter Grom (UBS) asked about OWYN’s product quality issues and the outlook for the brand. CEO Geoff Tanner explained the issue was tied to a raw material sourced before the acquisition, has now been addressed, and confidence remains high in OWYN’s growth trajectory.
- Stephen Robert Powers (Deutsche Bank) inquired about competition in the high-protein, low-sugar segment and capital allocation priorities. Tanner described the category as increasingly mainstream and competitive, emphasizing agility and innovation, while CFO Chris Bealer reiterated the company’s capacity for both M&A and share repurchases.
- Robert Moskow (TD Cowen) sought clarity on the implied growth rates for Quest and OWYN in the guidance. Bealer confirmed Quest is expected to grow high single digits and OWYN double digits, with Atkins expected to decline about 20%, impacting the overall outlook.
- Jon Andersen (William Blair) questioned how Simply Good Foods is reaching mainstream consumers outside the traditional nutritional aisle. Tanner described efforts to expand physical availability, secondary placements, and innovation targeting broader snacking occasions.
- Megan Clapp (Morgan Stanley) asked about SKU rationalization at Atkins and whether core products are still healthy. Tanner confirmed that most core SKUs are stable or growing, while declines are concentrated in lower-velocity items being eliminated.
Catalysts in Upcoming Quarters
In the upcoming quarters, our analysts will watch (1) progress on margin recovery as cocoa costs and tariffs moderate, (2) the impact of increased marketing and new product launches on Quest and OWYN’s growth, and (3) continued rationalization and stabilization efforts at Atkins. Execution in expanding physical distribution and innovation uptake will also be critical for restoring momentum.
Simply Good Foods currently trades at $19.72, down from $24.97 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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