Simply Good Foods Beats Q2 Expectations, Shares Jump Nearly 7% on Upbeat Outlook

(Investing.com) – Shares of Simply Good Foods Co. (NASDAQ: SMPL) jumped nearly 7% in premarket trading on Wednesday after the company reported second-quarter results that beat analyst expectations and maintained its positive outlook for the full fiscal year 2025.

For the quarter ended March 1, Simply Good Foods reported adjusted earnings per share (EPS) of $0.46, significantly higher than analysts’ forecasts of $0.41. Net revenue was $359.7 million, up 15.2% year over year, though slightly below the consensus estimate of $364.55 million.

Quest and OWYN are key growth drivers
The Quest brand continued to be a bright spot with retail sales up 13% YoY. In addition, OWYN, the recently acquired nutritional drinks brand Simply Good Foods, contributed significantly with $33.8 million in revenue.

In contrast, the long-standing Atkins brand saw retail sales decline by about 10%, suggesting a shift in consumer tastes or increased competition in the traditional product segment.

CEO praises first-half performance

“I am very pleased with the second quarter results as well as the first half of the financial year as a whole. We are expanding our distribution channels, driving product innovation and increasing brand awareness – all of which are delivering positive results,” said CEO Geoff Tanner.

Maintains Full-Year Outlook, Continues Debt Reduction
The company maintained its FY25 net revenue growth forecast of 8.5% to 10.5%, and adjusted EBITDA growth of 4% to 6%. Management noted that this forecast includes a negative impact of approximately 2 percentage points due to one week less in FY25 than the prior year.

At the end of the quarter, Simply Good Foods held $103.7 million in cash and $300 million in outstanding debt. During the second quarter, the company proactively repaid $50 million of its term loan, reflecting its efforts to manage its finances and improve its capital structure.