The Simply Good Foods Company Reports Fiscal Second Quarter 2026 Results & Revises Outlook

Key Highlights

• Net sales decreased to \$326.0 million from \$359.7 million in the prior year period.
• Net loss of \$159.7 million, a sharp reversal from net income of \$36.7 million last year.
• Loss per diluted share of \$1.73 versus earnings per diluted share of \$0.36 in the comparable period.
• Adjusted diluted EPS of \$0.45, slightly down from \$0.46 last year.
• Adjusted EBITDA of \$55.5 million, down 18.4% from \$68.0 million in the prior year period.
• Fiscal Year 2026 Outlook Updated: Net sales expected to range between \$1.31 and \$1.35 billion (down 10% to 7% year-over-year).
• Company repurchased approximately 4.6 million shares for \$89 million during the quarter.
• Strategic borrowing: Company borrowed an additional \$150 million with a three-year extension to credit facilities in November 2025.

Detailed Financial Results

The Simply Good Foods Company, a leader in the nutritional snacking sector, released its fiscal second quarter results for the period ended February 28, 2026. The results showed a marked deterioration in performance compared to the prior year, with net sales declining by \$33.7 million and the company swinging to a substantial net loss. This loss was primarily driven by a significant impairment charge, which is reflected in the reconciliation of adjusted and reported earnings.

Weighted average diluted shares outstanding decreased modestly to 92.3 million due to ongoing share repurchases. The company’s cash flow from operations year-to-date was \$58.2 million, compared to \$63.3 million last year. Capital expenditures were approximately \$7.6 million.

Loss per share metrics are notable: reported diluted loss per share was \$1.73, versus a profit of \$0.36 last year. Adjusted diluted EPS, excluding one-time charges and non-recurring costs, was \$0.45, only slightly lower than last year’s \$0.46. Adjusted EBITDA, a key profitability metric for investors, fell to \$55.5 million, down 18.4% year-over-year.

Fiscal 2026 Outlook and Guidance

• Net sales expected between \$1.31 and \$1.35 billion, representing a decline of 10% to 7% year-over-year.
• For Q3 FY26, net sales are expected to be in the range of \$329 to \$336 million (down 14% to 11% year-over-year).
• Adjusted EBITDA expected for Q3: \$46 to \$50 million (down 38% to 32% year-over-year).
• The company’s guidance assumes current economic conditions, consumer purchasing patterns, and no major disruptions.

The company does not provide a forward-looking reconciliation for expected Adjusted EBITDA to Net Income due to the difficulty in estimating certain items and their potential significance.

Balance Sheet & Capital Actions

• Cash balances: \$439.3 million as of February 28, 2026.
• Long-term assets include property & equipment (\$42.7 million) and intangible assets (\$1.00 billion).
• Share repurchases: 13.5 million shares held in treasury, up from 4.0 million at August 30, 2025.
• Common stock: 104.0 million shares issued, up from 103.7 million last period.
• Additional paid-in capital: \$1.35 billion.
• Retained earnings: \$456.5 million, down from \$590.9 million.
• Total stockholders’ equity: \$1.49 billion, down from \$1.81 billion.

The significant decrease in retained earnings and total equity reflects the net loss and share repurchase activity. The company’s strategic debt extension and additional borrowing of \$150 million is also notable, as it impacts liquidity and leverage.

Shareholder and Price-Sensitive Information

• Impairment Charge: The company reported a substantial impairment loss that contributed to the net loss for the quarter and year-to-date. This is a material and price-sensitive event that could affect investor sentiment and share value.
• Lower Sales and EBITDA Guidance: Management has revised its fiscal 2026 outlook downwards, indicating continuing challenges in the business environment that are likely to impact future profitability and cash flows.
• Large Share Repurchase: The company’s buyback of 4.6 million shares for \$89 million during the quarter, and increased treasury stock, could support the share price but also signals management’s confidence despite the challenging results.
• Strategic Debt Move: Borrowing an additional \$150 million and extending credit facilities could be seen as bolstering liquidity, but also increases financial risk and leverage.

Risks and Forward-Looking Statements

The company emphasizes that forward-looking statements are subject to risks including consumer preference changes, supply chain constraints, inflation, tariffs, competitive activity, pandemic or other global disruptions, loss of management, increased costs, and cybersecurity threats. Investors should be aware that actual results may differ materially from guidance due to these uncertainties.

Conference Call

Management will host a conference call for investors and analysts on April 9, 2026, at 6:30 a.m. Mountain Time (8:30 a.m. Eastern Time) to discuss these results and outlook.

Disclaimer

This article is for informational purposes only and should not be construed as investment advice. All financial figures are based on unaudited reports and subject to change. Investors are encouraged to review the full official filings and consult with their financial advisor before making investment decisions. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially.

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