The Simply Good Foods Company Reports Fiscal Third Quarter 2025 Financial Results and Updates Fiscal Year Outlook
DENVER, July 10, 2025 (GLOBE NEWSWIRE) -- The Simply Good Foods Company (NASDAQ:SMPL) ("Simply Good Foods," or the "Company"), a developer, marketer and seller of branded nutritional foods and snacking products, today reported financial results for the thirteen and thirty-nine weeks ended May 31, 2025. The acquisition of Only What You Need, Inc. ("OWYN") was completed on June 13, 2024. Therefore, the Company's year-ago performance for the thirteen and thirty-nine weeks ended May 25, 2024, does not include results of the OWYN business. The reference to "organic" or "legacy" Simply Good Foods in this press release encompasses Simply Good Foods' business excluding OWYN.
Third Quarter Summary:(1)
Net sales of $381.0 million versus $334.8 million
Net income of $41.1 million versus $41.3 million
Earnings per diluted share ("EPS") of $0.40 versus $0.41
Adjusted Diluted EPS(2) of $0.51 versus $0.50
Adjusted EBITDA(3) of $73.9 million versus $71.9 million
Updating Fiscal Year 2025(4) Outlook:
Net sales expected to increase 8.5% to 9.5%
Adjusted EBITDA expected to increase 4% to 5%
The fifty-third week in Fiscal Year 2024 is an approximately 2-percentage point headwind to both Net Sales and Adjusted EBITDA growth in Fiscal Year 2025 and is incorporated in the outlook above
"I am pleased with the continued momentum on our business, with net sales up 14% highlighted by approximately 4% organic net sales growth. Consumption increased double-digits again for both Quest and OWYN which, in aggregate, represent about 70% of net sales today, while Atkins remained under pressure, as expected," said Geoff Tanner, President and Chief Executive Officer of Simply Good Foods. "Considering our year-to-date performance on the top and bottom line, and trends to begin the fourth quarter, we are narrowing our full-year outlook. I want to commend our teams for their tenacity amidst a dynamic operating environment in delivering a year where we expect to generate approximately 3% organic net sales growth and mid-single-digit Adjusted EBITDA growth, as well as to successfully integrate OWYN."
"As a leader in the fast-growing Nutritional Snacking category, Simply Good Foods is uniquely positioned to lead the continued mainstreaming of consumer demand for high-protein, low-sugar, low-carb food and beverage products, and to create meaningful shareholder value. We have a simple framework for growth: Introduce world class innovation, expand physical availability of our products across the store and online, and leverage award-winning marketing to build awareness of our brands. We are stepping up our productivity and other mitigation efforts to offset elevated headwinds from inflation and tariffs in the short term, while enabling the Company to continue to support growth-driving investments for the long-term."
Third Quarter 2025 Results
Net sales of $381.0 million increased $46.2 million or 13.8% versus the comparable year ago period. OWYN net sales contributed $33.6 million, or 10.0%, to reported net sales growth, while organic net sales grew 3.8%, driven by Quest.
Total Simply Good Foods retail takeaway(6) increased about 3% driven by growth for Quest and OWYN of approximately 11% and 24%, respectively, while Atkins declined about 13%.
Gross profit of $138.5 million increased 3.7% versus the comparable year ago period. The increase in gross profit was driven by the inclusion of OWYN and modest benefits from productivity and pricing, partially offset by inflationary headwinds on our legacy business. As a result, gross margin was 36.4%, a 350 basis points decrease versus the comparable year ago period, driven by net inflation and OWYN.
Operating expenses of $79.2 million increased $4.3 million versus the comparable year ago period. Selling and marketing expenses of $33.8 million decreased $2.7 million versus the comparable year ago period driven by declines in the legacy business that were partially offset by the inclusion of OWYN. General and administrative ("G&A") expenses of $41.2 million increased $9.7 million versus the comparable year ago period. Excluding integration expenses of $5.2 million and stock-based compensation of $4.3 million, G&A increased $4.8 million to $31.4 million, driven primarily by the inclusion of OWYN.
Net interest income and interest expense of $4.2 million reflected a modest increase versus the comparable year ago period.
Net income of $41.1 million decreased 0.6% versus $41.3 million in the comparable year ago period.
Adjusted EBITDA of $73.9 million increased 2.8% versus $71.9 million in the comparable year ago period.
Reported earnings per diluted share ("Diluted EPS") were $0.40 versus $0.41 in the comparable year ago period. The weighted average diluted shares outstanding were approximately 101.6 million versus 101.3 million in the comparable year ago period.
Adjusted Diluted EPS was $0.51 versus $0.50 in the comparable year ago period.
Year-to-Date Third Quarter Fiscal Year 2025 Summary:
Net sales of $1,081.9 million versus $955.6 million
Net income of $116.0 million versus $110.0 million
Earnings per diluted share ("EPS") of $1.14 versus $1.09
Adjusted Diluted EPS of $1.46 versus $1.33
Adjusted EBITDA of $211.9 million versus $191.7 million
Net sales of $1,081.9 million increased 13.2% versus the comparable year ago period. OWYN contributed $99.6 million, or 10.4%, to reported net sales growth, while organic net sales grew 2.8%, driven by Quest. International organic net sales were down $1.6 million versus the comparable year ago period.
Total Simply Good Foods retail takeaway increased about 6% driven by strong Quest and OWYN growth of about 12% and 44%, respectively, while Atkins declined about 9%.
Gross profit of $399.1 million increased 9.2% from the comparable year ago period. The increase in gross profit was driven primarily by the inclusion of OWYN and organic volume growth, partially offset by inflationary headwinds. As a result, gross margin was 36.9%, representing a decrease of 140 basis points versus the comparable year ago period primarily due to OWYN. The non-cash inventory step-up related to the OWYN Acquisition in the current fiscal year was a 10 basis point headwind.
Operating expenses of $230.5 million increased $23.5 million versus the comparable year ago period. Selling and marketing expenses of $101.9 million decreased $1.2 million versus the comparable year ago period, primarily driven by declines in the legacy business which were offset by the inclusion of OWYN. General and administrative ("G&A") expenses of $115.3 million increased $26.9 million compared to the year ago period. Excluding stock-based compensation of $12.6 million, integration expenses of $12.1 million, and term loan transaction fees of $0.7 million, G&A increased $14.6 million to $89.6 million, driven primarily by the inclusion of OWYN.
One-time Business Transaction costs related to the OWYN Acquisition were $0.8 million.
Net interest income and interest expense of $16.9 million increased $3.2 million versus the comparable year ago period. The interest expense component increase was primarily driven by a higher term loan debt balance due to the OWYN Acquisition.
Net income of $116.0 million compared to $110.0 million for the comparable year ago period.
Adjusted EBITDA of $211.9 million increased 10.6% versus $191.7 million in the comparable year ago period.
Reported earnings per diluted share ("Diluted EPS") of $1.14 increased 4.6% versus $1.09 in the comparable year ago period. The weighted average diluted shares outstanding was approximately 101.7 million versus 101.2 million in the year ago period.
Adjusted Diluted EPS of $1.46 increased 9.8% versus $1.33 in the comparable year ago period.
Balance Sheet and Cash Flow
At the end of the third quarter of fiscal year 2025, the Company had cash of $98.0 million and an outstanding principal balance on its term loan of $250.0 million. During the quarter, the Company repaid $50.0 million of its term loan debt, bringing fiscal year-to-date repayments to $150.0 million. Since the closing of the OWYN Acquisition, when the term loan balance increased by $250.0 million, the Company has repaid $240.0 million. Cash flow from operations was about $133.1 million versus $166.8 million in the comparable year ago period. The decline was primarily due to higher uses of working capital, principally inventory.
As of May 31, 2025, the Company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was 0.5x(7).
Fiscal Year 2025 Outlook
Considering our year-to-date performance on the top and bottom line, and trends to begin the fourth quarter, we are narrowing our full-year outlook. The Company continues to expect organic net sales growth to be driven primarily by volume. In addition, the Company is maintaining its outlook for full year gross margin to decline by approximately 200 basis points year-over-year, driven by elevated inflation and tariff headwinds in the second half which the Company expects will be partially offset by ongoing productivity, cost savings, and pricing.
Therefore, the Company anticipates the following in Fiscal Year 2025:
Net Sales expected to increase 8.5% to 9.5%
OWYN Net Sales of $145 million, the mid-point of the previously provided $140-150 million range
Adjusted EBITDA expected to increase 4% to 5%
The fifty-third week in Fiscal Year 2024 is an approximately 2-percentage point headwind to both Net Sales and Adjusted EBITDA growth in Fiscal Year 2025 and incorporated in the outlook above
The foregoing outlook assumes current economic conditions and consumer purchasing behavior remain generally consistent over the balance of the Company's fiscal year.
___________________________________(1) All comparisons for the third quarter or fiscal year-to-date period ended May 31, 2025, versus the comparable year-ago period ended May 25, 2024. (2) Adjusted Diluted Earnings Per Share is a non-GAAP financial measure. The Company excludes acquisition-related costs, such as Business Transaction costs, integration expense and depreciation and amortization expense in calculating Adjusted Diluted Earnings Per Share. Please refer to "Reconciliation of Adjusted Diluted Earnings Per Share" in this press release for an explanation and reconciliation of this non-GAAP financial measure.(3) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP financial measure. Please refer to the "Reconciliation of EBITDA and Adjusted EBITDA" in this press release for an explanation and reconciliation of this non-GAAP financial measure.(4) The Company does not provide a forward-looking reconciliation of expected Fiscal Year 2025 Adjusted EBITDA to Net Income, the most directly comparable GAAP financial measure, because we are unable to provide such a reconciliation without unreasonable effort due to the unavailability of reliable estimates for certain components of consolidated net income and the respective reconciliations, and the inherent difficulty of predicting what the changes in these components will be throughout the fiscal year. As these items may vary greatly between periods, we are unable to address the probable significance of the unavailable information, which could significantly affect our future financial results.(5) "Organic" or "Legacy" growth refers to combined performance of Simply Good Foods' business excluding OWYN.(6) Combined Quest, Atkins, and OWYN Circana MULO++C store and Company unmeasured channel estimate for the 13-weeks ending June 1, 2025, vs. the comparable 13-week year ago period.(7) Net Debt to Adjusted EBITDA is a non-GAAP financial measure which Simply Good Foods defines as the total debt outstanding under our credit agreement with Barclays Bank PLC and other parties ("Credit Agreement"), reduced by cash and cash equivalents, and divided by the Company's trailing twelve month Adjusted EBITDA, as previously defined. The Company does not provide a forward-looking reconciliation of Net Debt to Adjusted EBITDA to Net Debt to Consolidated Net Income, the most directly comparable GAAP financial measures, expected for Fiscal Year 2025, because we are unable to provide such a reconciliation without unreasonable effort due to the unavailability of reliable estimates for certain components of consolidated net income and the respective reconciliations, and the inherent difficulty of predicting what the changes in these components will be throughout the fiscal year. As these items may vary greatly between periods, we are unable to address the probable significance of the unavailable information, which could significantly affect our future financial results.
Conference Call and Webcast InformationThe Company will host a conference call with members of the executive management team to discuss these results today, Thursday, July 10, 2025, at 6:30 a.m. Mountain time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial 877-407-0792 from the U.S. or 201-689-8263 from international locations. In addition, the call and accompanying presentation slides will be broadcast live over the Internet hosted at the "Investors" section of the Company's website at www.thesimplygoodfoodscompany.com. A telephone replay will be available approximately two hours after the call concludes and will be available through July 17, 2025, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13754202.
About The Simply Good Foods CompanyThe Simply Good Foods Company (NASDAQ:SMPL), headquartered in Denver, Colorado, is a consumer packaged food and beverage company that is bringing nutritious snacking with ambitious goals to raise the bar on what food can be with trusted brands and innovative products. Our product portfolio consists primarily of protein bars, ready-to-drink (RTD) beverages, sweet and salty snacks, and confectionery products marketed under the Quest, Atkins, and OWYN brands. We are a company that aims to lead the nutritious snacking movement and is poised to expand our healthy lifestyle platform through innovation, organic growth, and investment opportunities in the snacking space. To learn more, visit www.thesimplygoodfoodscompany.com.
Investor ContactJoshua LevineVice President, Investor Relations and Treasury The Simply Good Foods Company
Forward Looking Statements
Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as "will", "expect", "intends" or other similar words, phrases or expressions. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We caution you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These risks and uncertainties relate to, among other things, our ability to achieve our estimates of OWYN's net sales and Adjusted EBITDA and our anticipated synergies from the OWYN Acquisition, our net leverage ratio post-acquisition, our Adjusted EPS post-acquisition, our ability to maintain OWYN personnel and effectively integrate OWYN, our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints and inflationary pressure on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical conditions affecting us and the industry in which we operate, our ability to maintain adequate product inventory levels to timely supply customer orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably, the loss of one or more members of our management team, potential for increased costs and harm to our business resulting from unauthorized access of the information technology systems we use in our business, expansion of our wellness platform and other risks and uncertainties indicated in the Company's Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company's expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's assessments as of any date subsequent to the date of this communication.
The Simply Good Foods Company and SubsidiariesConsolidated Balance Sheets (Unaudited, dollars in thousands, except share and per share data)
May 31, 2025
August 31, 2024
Assets
Current assets:
Cash
$
98,008
$
132,530
Accounts receivable, net
152,580
150,721
Inventories
164,464
142,107
Prepaid expenses
7,313
5,730
Other current assets
14,574
9,192
Total current assets
436,939
440,280
Long-term assets:
Property and equipment, net
24,102
24,830
Intangible assets, net
1,325,953
1,336,466
Goodwill
589,974
591,687
Other long-term assets
53,420
42,881
Total assets
$
2,430,388
$
2,436,144
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
73,012
$
58,559
Accrued interest
44
265
Accrued expenses and other current liabilities
37,664
49,791
Total current liabilities
110,720
108,615
Long-term liabilities:
Long-term debt, less current maturities
248,920
397,485
Deferred income taxes
176,695
166,012
Other long-term liabilities
53,102
36,546
Total liabilities
589,437
708,658
See commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued
—
—
Common stock, $0.01 par value, 600,000,000 shares authorized, 103,583,702 and 102,515,315 shares issued at May 31, 2025, and August 31, 2024, respectively
1,036
1,025
Treasury stock, 3,058,475 shares and 2,365,100 shares at cost at May 31, 2025, and August 31, 2024, respectively
(102,789
)
(78,451
)
Additional paid-in-capital
1,342,011
1,319,686
Retained earnings
603,236
487,265
Accumulated other comprehensive loss
(2,543
)
(2,039
)
Total stockholders' equity
1,840,951
1,727,486
Total liabilities and stockholders' equity
$
2,430,388
$
2,436,144
The Simply Good Foods Company and SubsidiariesConsolidated Statements of Income and Comprehensive Income(Unaudited, dollars in thousands, except share and per share data)
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
May 31, 2025
May 25, 2024
May 31, 2025
May 25, 2024
Net sales
$
380,956
$
334,757
$
1,081,879
$
955,634
Cost of goods sold
242,437
201,131
682,737
590,020
Gross profit
138,519
133,626
399,142
365,614
Operating expenses:
Selling and marketing
33,799
