The Simply Good Foods Company Stock Earnings Reports

Q3 FY2025 highlights: Total net sales grew ~14% (driven ~10% from the Owen acquisition and ~4% organic). Quest (≈60% of sales) and Owen (≈10% of sales) delivered double‑digit consumption growth and remain the primary growth engines; Quest salty snacks and new innovations (Overload, milkshake) showed strong early traction and distribution gains. Atkins consumption declined (~13% in Q3) due mainly to distribution cuts and lapping prior merchandising events; management is proactively pruning low‑velocity SKUs and prioritizing a smaller, more profitable core assortment. Gross margin contraction (down ~350 bps in Q3) was driven by higher input costs (notably cocoa and whey), partial tariff impacts, and the inclusion of Owen; adjusted EBITDA rose modestly (~3%), but margins are under near‑term pressure. Management has stepped up productivity and taken selective pricing; they expect these offsets to fully realize over 12–18 months. Cash flow remains strong: substantial term loan repayments (about $240M repaid of the $250M Owen financing in ~11 months), $24M of share buybacks in Q3, and net leverage around 0.5x. Updated FY2025 guidance: total net sales up ~8.5–9.5% and adjusted EBITDA +4–5% (guidance assumes ~200 bps full‑year gross margin decline and includes a fiscal calendar extra week headwind). Key investor takeaways: strong category tailwinds and clear growth runway via Quest and Owen, near‑term margin headwinds from inflation/tariffs that management is mitigating via productivity and pricing, proactive portfolio rationalization at Atkins, and conservative capital allocation with an M&A-first posture and continued debt paydown.