The Investor
09 Jul 2026, 13:11
Simply Good Foods (SMPL) Stock Surges 17% Premarket Despite Lower Earnings on Better-Than-Expected Results
Simply Good Foods (NASDAQ: SMPL) shares jumped 17% in premarket trading on Thursday after the nutritional snacking company reported fiscal third-quarter 2026 results that exceeded management's expectations and updated its full-year outlook, despite posting lower sales and earnings compared with a year ago.
Why Is SMPL Stock Rising Today?
The sharp rally appears to reflect investor relief that quarterly performance came in ahead of internal expectations as the company begins executing its turnaround strategy.
CEO Joe Scalzo said the company is already seeing early benefits from cost-saving initiatives announced last quarter, while emphasizing continued focus on strengthening execution, improving its business model, and investing behind its core brands to return to sustainable growth.
Simply Good Foods Continues Turnaround Efforts
Third-quarter net sales declined 6.3% year over year to $357 million, while adjusted diluted EPS fell to $0.42 from $0.51. Adjusted EBITDA decreased 22.5% to $57.2 million as higher input costs, restructuring expenses, and weaker Atkins sales weighed on results.
The company also reported a net loss of $52 million, primarily due to an $82 million non-cash impairment charge related to goodwill and the Atkins and OWYN brands, largely reflecting the decline in the company's share price rather than operating performance.
Despite ongoing challenges, Quest continued to outperform, posting sales growth of 1.1%, while OWYN sales increased 3.6%. Management said Atkins' weakness was largely driven by previously disclosed distribution losses and softer retail demand.
Fiscal 2026 Outlook Updated
Simply Good Foods updated its fiscal 2026 outlook, projecting net sales between $1.345 billion and $1.355 billion, adjusted EBITDA of $220 million to $225 million, and gross margin contraction of approximately 375 basis points.
Although the updated outlook still calls for lower sales and profitability than last year, investors appeared encouraged that management reaffirmed its turnaround strategy and indicated early operational improvements are beginning to materialize.
What Investors Are Watching Next
Investors will now focus on whether Simply Good Foods can stabilize the Atkins brand while continuing the growth momentum of Quest and OWYN. The company is also expected to continue restructuring efforts, invest in brand innovation, and support household penetration as it works to restore profitable long-term growth.
The strong premarket rally suggests investors were expecting weaker results and are responding positively to better-than-anticipated quarterly performance, improving execution, and early signs that the company's turnaround plan is gaining traction.
Simply Good Foods (NASDAQ: SMPL) shares jumped 17% in premarket trading on Thursday after the nutritional snacking company reported fiscal third-quarter 2026 results that exceeded management's expectations and updated its full-year outlook, despite posting lower sales and earnings compared with a year ago.
Why Is SMPL Stock Rising Today?
The sharp rally appears to reflect investor relief that quarterly performance came in ahead of internal expectations as the company begins executing its turnaround strategy.
CEO Joe Scalzo said the company is already seeing early benefits from cost-saving initiatives announced last quarter, while emphasizing continued focus on strengthening execution, improving its business model, and investing behind its core brands to return to sustainable growth.
Simply Good Foods Continues Turnaround Efforts
Third-quarter net sales declined 6.3% year over year to $357 million, while adjusted diluted EPS fell to $0.42 from $0.51. Adjusted EBITDA decreased 22.5% to $57.2 million as higher input costs, restructuring expenses, and weaker Atkins sales weighed on results.
The company also reported a net loss of $52 million, primarily due to an $82 million non-cash impairment charge related to goodwill and the Atkins and OWYN brands, largely reflecting the decline in the company's share price rather than operating performance.
Despite ongoing challenges, Quest continued to outperform, posting sales growth of 1.1%, while OWYN sales increased 3.6%. Management said Atkins' weakness was largely driven by previously disclosed distribution losses and softer retail demand.
Fiscal 2026 Outlook Updated
Simply Good Foods updated its fiscal 2026 outlook, projecting net sales between $1.345 billion and $1.355 billion, adjusted EBITDA of $220 million to $225 million, and gross margin contraction of approximately 375 basis points.
Although the updated outlook still calls for lower sales and profitability than last year, investors appeared encouraged that management reaffirmed its turnaround strategy and indicated early operational improvements are beginning to materialize.
What Investors Are Watching Next
Investors will now focus on whether Simply Good Foods can stabilize the Atkins brand while continuing the growth momentum of Quest and OWYN. The company is also expected to continue restructuring efforts, invest in brand innovation, and support household penetration as it works to restore profitable long-term growth.
The strong premarket rally suggests investors were expecting weaker results and are responding positively to better-than-anticipated quarterly performance, improving execution, and early signs that the company's turnaround plan is gaining traction.