The Simply Good Foods Company — Fiscal Year 2026 Earnings Summary

Financial Performance:

• Q4 2026 net sales were $333.3 million, a 9.7% decrease year-over-year from $369.0 million; full-year 2026 net sales were $1,356.5 million, a 6.5% decrease from $1,450.9 million.
• Q4 2026 net income was $30.5 million compared to a net loss of $12.4 million in the prior year; full-year 2026 net loss was $155.9 million compared to net income of $103.6 million.
• Q4 2026 reported diluted EPS was $0.34 versus a loss of $0.12; full-year 2026 reported loss per diluted share was $1.69 versus earnings of $1.02.
• Q4 2026 Adjusted Diluted EPS was $0.44 versus $0.46; full-year 2026 Adjusted Diluted EPS was $1.70 versus $1.92.
• Q4 2026 Adjusted EBITDA was $57.5 million, a 13.2% decrease from $66.2 million; full-year 2026 Adjusted EBITDA was $225.9 million, an 18.8% decrease from $278.2 million.
• Q4 2026 gross margin was 34.0%, a 30 basis point decline year-over-year; full-year 2026 gross margin was 32.6%, a 360 basis point decline.
• Q4 2026 cash flow from operations was approximately $181.0 million versus $178.5 million in the prior year; full-year capital expenditures were approximately $24.1 million.
• At fiscal year-end 2026, the Company held $138.4 million in cash and had a term loan principal balance of $350.0 million, resulting in a Net Debt to Adjusted EBITDA ratio of 0.9x.
• Net interest expense for Q4 2026 was $4.7 million (28.7% increase), while full-year 2026 net interest expense was $18.5 million (10% decrease).

Guidance and Future Outlook:

• Fiscal 2027 net sales are expected to decline between 13% and 17% year-over-year.
• Fiscal 2027 GAAP gross margins are expected to increase between 250 and 300 basis points year-over-year.
• Fiscal 2027 Adjusted EBITDA is expected to decline between 9% and 14% year-over-year.
• Fiscal 2027 net interest expense is projected between $18 million and $20 million.
• Fiscal 2027 capital expenditures are projected between $15 million and $20 million.
• Q1 2027 net sales are expected to decline between 19% and 22% year-over-year.
• Q1 2027 GAAP gross margins are expected to increase by approximately 100 basis points year-over-year.
• Q1 2027 Adjusted EBITDA is expected to decline between 28% and 33% year-over-year.
• Outlook assumes current economic conditions, consumer purchasing behavior, and prevailing tariff rates remain consistent.

Business Segments and Product Lines:

• Q4 2026 Atkins net sales declined 14.9% and OWYN net sales declined 20.6%, partially offset by Quest performance; Quest growth was 0.7% for the full year.
• Full-year 2026 Atkins distribution-related declines were largely as expected; OWYN's decline resulted from poor velocities on newly expanded distribution.
• Total Simply Good Foods retail takeaway decreased approximately 8% in Q4 2026 (Atkins -23%, OWYN -7%, Quest -2%) and 5% for the full year (Atkins -22%, Quest +3%, OWYN +1%).
• Q4 2026 G&A expenses included $1.9 million in restructuring costs; full-year G&A included $12.7 million in restructuring costs, $4.1 million in integration expenses, and $3.0 million in term loan transaction fees.
• Prior to Q4 2026, the Company recognized $331.0 million in non-cash impairment charges related to Goodwill and Atkins and OWYN brand intangible assets.

Market and Competitive Landscape:

• Net sales performance was driven by softer retail takeaway and velocity-related distribution pressure.
• The Company operates in the Nutritional Snacking category with brands Quest, Atkins, and OWYN.

Risks and Challenges:

• Fiscal 2027 is characterized as a challenging year with expected significant declines in net sales and Adjusted EBITDA.
• Full-year 2026 gross margin decline was driven by higher input costs, volume declines, and restructuring costs.
• Impairment charges were driven by current fiscal year performance, updated revenue projections, and declines in stock price.
• Net interest expense increased in Q4 due to a higher debt balance, though decreased for the full year due to lower interest rates.

Management Commentary and Tone:

• CEO Joe Scalzo described Fiscal 2026 as a "year of decisive action" where the Company reset the business, aligned priorities, improved cost structure, and overhauled marketing.
• Management stated they delivered on modest financial commitments, generated significant cash flow despite lower sales, and completed foundational work for long-term trajectory improvement.
• Fiscal 2027 is described as a "turnaround" year where the Company is reinvesting margin recovery behind brands to restore economic foundation and rebuild momentum.
• Management expects performance to improve over the course of 2027 as marketing investments take hold, pricing volume impact eases, and year-over-year comparisons become favorable.

Other Key Points:

• Weighted average diluted shares outstanding declined in both Q4 (88.5 million) and full-year (92.4 million) periods, reflecting share repurchases.
• Full-year 2026 financing activities included $213.3 million in repurchases of common stock, $50 million in principal debt payments, and $150 million in proceeds from new debt issuance.
• The Company will host a conference call on October 27, 2026, at 6:30 a.m. Mountain time to discuss results.
• The effective tax rate was 25.6% for Q4 2026 and 21.3% for full-year 2026.