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January 9, 2026 • 3 min read
The Simply Good Foods Company (SMPL), a major player in the "better-for-you" snacking industry, operates a portfolio centered on two primary brands: Quest (active nutrition) and Atkins (weight management). While the company aims to capitalize on the growing consumer demand for low-carb and high-protein foods, their results for the first quarter of fiscal year 2026 reveal a divergence in performance between these core assets.
We are going to dig into the income statement from their latest 10-Q filing to see how the company is managing its product mix and profitability amidst rising costs.
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Total net sales for the thirteen weeks ended November 29, 2025, were essentially flat at $340.2 million, compared to $341.3 million in the same period last year. However, the aggregate stability hides significant volatility within the portfolio segments.
Quest continues to drive the company's top line. The brand generated $210.3 million in sales, a notable increase from $191.9 million in the prior year. This growth suggests robust demand for active nutrition products, such as protein bars and chips, which appeal to a broader consumer base beyond strict dieters.
In contrast, the Atkins brand faced a steep decline. Sales dropped to $90.3 million from $108.2 million in the prior year period. This contraction highlights the challenges facing legacy weight-management brands in the current market environment. Additionally, the OWYN (Only What You Need) brand contributed $31.2 million, a slight decrease from $32.3 million the previous year.
While revenue remained steady, the cost profile of the business shifted unfavorably. Cost of Goods Sold (COGS) rose to $230.3 million, up significantly from $210.8 million in the prior year. This increase occurred despite flat sales volume, indicating higher input costs or production inefficiencies.
As a result, Gross Profit fell to $109.9 million, down from $130.5 million a year ago. This represents a gross margin compression to 32.3%, compared to 38.2% in the first quarter of 2025.
Management appears to have responded to tighter gross margins by controlling operating expenses. Selling and marketing expenses were reduced to $29.7 million (down from $33.0 million). Despite these efforts to manage overhead, Net Income fell to $25.3 million ($0.26 per share), compared to $38.1 million ($0.38 per share) in the comparable quarter last year.
Despite the softer earnings, the company remained active in returning capital to shareholders. Simply Good Foods repurchased approximately $99.6 million of its common stock during the quarter. This significant buyback activity suggests management retains confidence in the company's long-term value proposition despite near-term headwinds.
The company ended the quarter with a solid liquidity position, holding $194.1 million in cash. Long-term debt increased to $396.7 million (net of deferred financing fees), up from $249.1 million at the end of the previous fiscal year, reflecting proceeds from a new incremental facility.
Simply Good Foods is navigating a complex period where its growth engine, Quest, is effectively offsetting the decline in its legacy Atkins business. However, the rise in Cost of Goods Sold has eroded profitability, forcing the company to reduce marketing spend to protect the bottom line. Investors will likely be watching to see if the company can stabilize Atkins while arresting the contraction in gross margins in the coming quarters.
Last updated: January 9, 2026