The Simply Good Foods Company (NASDAQ:SMPL) shares fell almost 19% after it reported mixed results for the fiscal second quarter, with revenue falling short of Wall Street expectations.
The company reported net sales of $326.0 million, missing analysts’ projections of $359.7 million.
Adjusted earnings per share (EPS) came in at $0.45, ahead of estimates of $0.41.
The quarter included a net loss of $159.7 million, compared with net income of $36.7 million in the same period last year.
Gross profit declined, weighed down by operational pressures, and the results were further impacted by a significant $184 million non-cash impairment loss.
Adjusted EBITDA totaled $55.5 million, below the projected $68 million.
The company, a leading player in the nutritional snacking category, cited ongoing supply chain challenges and higher input costs as key factors influencing the quarter’s results.
Simple Good Foods CEO Joe Scalzo said he wanted to make it “quite clear” the company is not satisfied with its 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,” Scalzo said.
“The long-term fundamentals of our category, our portfolio and our company capabilities are compelling, but in the near-term our organization must focus on three priorities, which are strengthening our business model economics by improving our cost structure and margins, ensuring consistency in our strategic choices driving organizational clarity and efficiency, and rebuilding brand investment behind superior marketing execution to drive household penetration."
Looking ahead, Simply Good Foods updated its full-year 2026 guidance, projecting net sales between $1.31 billion and $1.35 billion, representing a 7% to 10% decline year-over-year.
Gross margins are expected to contract by 300 to 350 basis points, while adjusted EBITDA is forecasted between $217 million and $225 million, down 19% to 22% from the prior year.