The Simply Good Foods Company (NASDAQ:SMPL) shares rose nearly 5% after the company reported third quarter fiscal 2026 results that exceeded Wall Street expectations for adjusted earnings and revenue.
The company posted adjusted diluted earnings per share of $0.42, beating analyst estimates of $0.35, while quarterly net sales came in at $357 million, ahead of consensus expectations of about $333 million.
Despite the quarterly outperformance, revenue declined 6.3% year over year, while profitability was pressured by lower sales volumes, higher input costs and restructuring expenses.
Net sales fell from $381 million in the prior-year period, and the company reported a net loss of $52 million compared with net income of $41.1 million a year earlier.
Adjusted EBITDA declined to $57.2 million from $73.9 million in the prior-year quarter, while adjusted diluted EPS decreased from $0.51.
The company attributed the revenue decline largely to weakness at its Atkins brand, where sales fell 24.6% year over year due to distribution-related declines and softer retail demand.
Growth from Quest and OWYN, which increased 1.1% and 3.6%, respectively, partially offset the decline.
“Our third quarter results reflect initial steps against the turnaround priorities we outlined last quarter. While we are still in the early stages of this work, we are beginning to see some signs of improved alignment around our three key priorities,” Simply Good Foods CEO Joe Scalzo wrote.
“We delivered third quarter net sales of $357 million and Adjusted EBITDA of $57 million, ahead of our expectations, with performance supported in part by the early effect of select cost actions we announced last quarter.”
The company reaffirmed its fiscal 2026 outlook, expecting net sales between $1.345 billion and $1.355 billion, representing a year-over-year decline of roughly 6% to 7%.
Adjusted EBITDA is expected to range between $220 million and $225 million, while gross margins are forecast to decline by approximately 375 basis points from the prior year.