UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________ FORM 10-Q _______________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 001 ...

Financial Data and Key Metrics Changes - Simply Good Foods reported Q3 net sales of $381 million, an increase of 13.8% year over year, driven by the acquisition of Owen and 3.8% organic growth [21][22] - Adjusted EBITDA for the quarter was $73.9 million, up 2.8% from the previous year, while net income was $41.1 million, slightly down from $41.3 million last year [23][24] - Gross margin declined to 36.4%, a decrease of 350 basis points year over year, primarily due to elevated input costs [22][24] Business Line Data and Key Metrics Changes - Quest, representing approximately 60% of net sales, achieved 11% consumption growth in Q3, with household penetration increasing by 120 basis points to 18.3% [11][21] - Atkins experienced a decline in consumption of 13% in Q3, attributed to distribution losses and the absence of high-volume merchandising events from the previous year [14][15] - Owen's retail takeaway grew by 24% in Q3, with ready-to-drink shakes seeing over 20% growth [17][21] Market Data and Key Metrics Changes - The nutritional snacking category continued to show robust growth, with overall consumption up double digits, reflecting a shift towards high protein, low sugar, and low carb options [7][19] - The company noted that Quest and Owen together account for approximately 70% of net sales, indicating strong market positioning [19][20] Company Strategy and Development Direction - Simply Good Foods aims to lead the generational shift towards healthier food options through innovation, expanding physical availability, and increasing brand awareness [19][20] - The company is focusing on optimizing the Atkins brand by reducing lower-velocity SKUs and enhancing the core product offerings [15][16] - There is a commitment to driving growth in the Salty Snacks platform, which saw a 31% increase in retail takeaway [12][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inflationary pressures impacting margins, particularly from cocoa and whey, and emphasized ongoing productivity and cost management efforts [8][9] - The outlook for the full year has been tightened, with expectations for net sales growth of 8.5% to 9.5% and adjusted EBITDA growth of 4% to 5% [28][30] - Management expressed confidence in the long-term growth potential of Quest and Owen, despite anticipated challenges with Atkins [19][20] Other Important Information - The company has repaid nearly all of the $250 million borrowed for the acquisition of Owen and has repurchased over $24 million worth of common stock [10][27] - The company is actively evaluating pricing strategies to address high input costs and maintain gross margins [96] Q&A Session Summary Question: Distribution expectations for Atkins and impact on sales - Management expects continued double-digit declines for Atkins due to distribution cuts but anticipates offsetting gains from Quest and Owen [36][39] Question: Performance expectations for Owen - Management remains confident in Owen's growth potential, expecting similar consumption trends to continue into FY 2026 [44][47] Question: Gross margin outlook and pricing strategies - Management indicated that gross margins are under pressure but are working on productivity and pricing actions to recover costs [65][68] Question: Capital allocation priorities - The company prioritizes M&A, debt repayment, and share buybacks as part of its capital allocation strategy [98][99] Question: Impact of Texas legislation on product portfolio - Management believes the impact of new regulations will be minimal, with only a few SKUs requiring reformulation [108][109]

Financial Data and Key Metrics Changes - Total net sales for Q3 2025 reached $381 million, an increase of 13.8% year over year, driven by Owen's contribution of $33.6 million or 10%, alongside 3.8% organic growth [23] - Adjusted EBITDA for the quarter was $73.9 million, reflecting a 2.8% increase from the previous year [25] - Gross profit increased to $138.5 million, a 3.7% rise from the year-ago period, but gross margin declined to 36.4%, down 350 basis points due to elevated input costs [24][25] - Reported EPS was $0.40 per diluted share, compared to $0.41 in Q3 last year, while adjusted diluted EPS increased to $0.51 from $0.50 [26] Business Line Data and Key Metrics Changes - Quest, representing approximately 60% of net sales, achieved 11% consumption growth in Q3, with household penetration increasing by 120 basis points to 18.3% [11] - Atkins experienced a 12.7% decline in net sales, attributed to distribution losses and the absence of high-volume merchandising events from the previous year [23][15] - Owen's retail takeaway grew by 24% in Q3, with ready-to-drink shakes seeing over 20% growth [18] Market Data and Key Metrics Changes - The nutritional snacking category continued to show robust growth, with overall consumption up double digits, reflecting a shift towards high protein, low sugar, and low carb options [8] - Quest's Salty Snacks platform saw retail takeaway grow by 31% in Q3, indicating strong market demand [12] Company Strategy and Development Direction - The company aims to optimize the Atkins brand by focusing on high-velocity SKUs and reducing lower-performing products, while continuing to support Quest and Owen's growth [16][18] - Simply Good Foods is positioned as a leader in the nutritional snacking category, focusing on innovation, expanding distribution, and increasing brand awareness [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inflationary pressures impacting margins, particularly from cocoa and whey, and emphasized ongoing productivity and cost management efforts [9][10] - The company expects to generate approximately 3% organic growth and mid-single-digit total adjusted EBITDA growth for the fiscal year [10] Other Important Information - The company has repaid $240 million of the $250 million borrowed for the acquisition of Owen, with a current leverage ratio of approximately 0.5 times [10][27] - Cash flow from operations for the fiscal year to date was $133 million, down from $167 million the previous year due to higher working capital needs [27] Q&A Session Summary Question: Distribution expectations for Atkins and impact on sales - Management expects continued double-digit declines for Atkins due to distribution cuts, but is proactively addressing these challenges with retailers [38][40] Question: Performance expectations for Owen - Management remains confident in Owen's growth potential, anticipating similar consumption trends as seen in Q3 [46][50] Question: Gross margin outlook and pricing strategy - Management is evaluating additional pricing actions to recover costs and support gross margins, which are currently under pressure [97][70] Question: Capital allocation priorities - The company prioritizes M&A, debt repayment, and share buybacks as part of its capital allocation strategy [99][100] Question: Impact of Texas legislation on product portfolio - Management believes the impact of new regulations will be minimal, with only a few SKUs requiring reformulation [110]

Company Performance - Simply Good Foods reported quarterly earnings of $0.51 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.50 per share a year ago [1] - The company posted revenues of $380.96 million for the quarter ended May 2025, exceeding the Zacks Consensus Estimate by 0.23% and up from $334.76 million year-over-year [2] - Over the last four quarters, Simply Good Foods has surpassed consensus EPS estimates three times and has also topped consensus revenue estimates three times [1][2] Stock Outlook - Simply Good Foods shares have declined approximately 17% since the beginning of the year, contrasting with the S&P 500's gain of 6.5% [3] - The company's current consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $376.45 million, and for the current fiscal year, it is $1.94 on revenues of $1.46 billion [7] Industry Context - The Food - Confectionery industry, to which Simply Good Foods belongs, is currently ranked in the bottom 11% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Simply Good Foods' stock performance [5]

Financial Performance - Q3 reported net sales increased by 13.8% year-over-year to $381 million, driven by the OWYN acquisition and 3.8% organic net sales growth[9, 31] - Fiscal year-to-date reported net sales increased by 13.2% year-over-year to $1,081.9 million, with OWYN contributing $99.6 million, or 10.4% to the growth[31] - Q3 Adjusted EBITDA grew by 2.8% year-over-year, while net income decreased slightly by 0.6% to $41.1 million[10, 34] - Fiscal year-to-date Adjusted EBITDA grew by 10.6% year-over-year, and net income increased by 5.4% to $116 million[11, 38] - The company's leverage improved to 0.5x, driven by Adjusted EBITDA growth and strong cash flow generation[11] Brand Performance - Quest retail takeaway grew by 11%, with household penetration increasing by 120 bps to 18.3%[9, 13] - OWYN Q3 retail takeaway grew by 24%, with balanced growth across channels, including MULO+C (+26%) and e-commerce (+19%)[9, 24, 25] - Atkins Q3 retail takeaway declined by 13%, primarily due to distribution losses[9, 23] Outlook and Strategy - Fiscal Year 2025 net sales for OWYN are expected to be $145 million[25] - The company expects Fiscal Year 2025 retail takeaway to increase low double-digits for Quest and decline low double digits for Atkins[17, 23] - The company is updating its Fiscal Year 2025 outlook, expecting net sales growth in the 8.5% to 9.5% range[10, 47]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section details the company's financial results for Q3 and year-to-date FY2025, including key metrics, brand and geographic performance, and profitability analysis [Q3 FY2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) In Q3 FY2025, The Simply Good Foods Company reported a 13.8% increase in net sales to $381.0 million, primarily driven by the OWYN acquisition and 3.8% organic growth from the Quest brand. While net income remained flat, Adjusted EBITDA grew by 2.8% to $73.9 million and Adjusted Diluted EPS saw a slight increase to $0.51 Q3 FY2025 Key Financial Metrics (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $381.0M | $334.8M | +13.8% | | Net Income | $41.1M | $41.3M | -0.5% | | Adjusted EBITDA | $73.9M | $71.9M | +2.8% | | Diluted EPS | $0.40 | $0.41 | -2.4% | | Adjusted Diluted EPS | $0.51 | $0.50 | +2.0% | - Net sales growth of **13.8%** was composed of a **10.0%** contribution from the OWYN acquisition and **3.8%** organic growth, driven by the Quest brand[3](index=3&type=chunk) - CEO Geoff Tanner highlighted that Quest and OWYN, now representing about **70%** of net sales, experienced double-digit consumption growth, while Atkins remained under pressure as anticipated[2](index=2&type=chunk) [YTD FY2025 Financial Results](index=3&type=section&id=Year-to-Date%20Third%20Quarter%20Fiscal%20Year%202025%20Summary) For the first thirty-nine weeks of FY2025, net sales grew 13.2% to $1.08 billion, with the OWYN acquisition contributing 10.4% to this growth. Adjusted EBITDA increased by 10.6% to $211.9 million, and Adjusted Diluted EPS rose 9.8% to $1.46 YTD FY2025 Key Financial Metrics (vs. YTD FY2024) | Metric | YTD FY2025 | YTD FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,081.9M | $955.6M | +13.2% | | Net Income | $116.0M | $110.0M | +5.5% | | Adjusted EBITDA | $211.9M | $191.7M | +10.6% | | Diluted EPS | $1.14 | $1.09 | +4.6% | | Adjusted Diluted EPS | $1.46 | $1.33 | +9.8% | - Year-to-date net sales growth was driven by a **$99.6 million** (**10.4%**) contribution from OWYN and **2.8%** organic growth from Quest[10](index=10&type=chunk) [Brand and Geographic Performance](index=1&type=section&id=Brand%20and%20Geographic%20Performance) Brand performance was mixed, with strong retail takeaway growth for Quest (+11%) and OWYN (+24%) in Q3, while Atkins declined (-13%). North America remains the dominant market, with sales growing to $373.6 million in Q3, whereas International sales saw a slight decline Q3 Retail Takeaway Growth | Brand | Retail Takeaway Growth (Q3) | | :--- | :--- | | Quest | ~11% | | OWYN | ~24% | | Atkins | ~-13% | Net Sales by Brand (Q3, in thousands) | Brand | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Atkins | $112,287 | $128,602 | | Quest | $227,737 | $198,096 | | OWYN | $33,551 | — | - North American net sales increased to **$373.6 million** in Q3 from **$326.7 million** in the prior year, while International sales decreased from **$8.1 million** to **$7.4 million**[36](index=36&type=chunk) [Profitability and Expenses](index=1&type=section&id=Profitability%20and%20Expenses) Q3 gross margin decreased by 350 basis points to 36.4%, impacted by net inflation and the inclusion of the lower-margin OWYN business. Operating expenses rose, driven by a $9.7 million increase in G&A, which included $5.2 million in integration expenses related to the OWYN acquisition - Q3 gross profit increased **3.7%** to **$138.5 million**, but gross margin fell **350 basis points** to **36.4%** due to net inflation and the OWYN acquisition[3](index=3&type=chunk) - Q3 Selling and marketing expenses decreased by **$2.7 million**, while General and administrative (G&A) expenses increased by **$9.7 million**, primarily due to OWYN integration costs (**$5.2 million**) and the inclusion of OWYN's G&A[5](index=5&type=chunk) - YTD gross margin decreased by **140 basis points** to **36.9%**, primarily due to the inclusion of OWYN[12](index=12&type=chunk) [Fiscal Year 2025 Outlook](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) This section outlines the company's updated financial guidance for fiscal year 2025, including expected growth rates for net sales and Adjusted EBITDA, along with key underlying assumptions and anticipated headwinds [Updated Guidance](index=1&type=section&id=Updated%20Guidance) The company has narrowed its full-year fiscal 2025 outlook. It now expects net sales to increase by 8.5% to 9.5% and Adjusted EBITDA to grow by 4% to 5%. This guidance incorporates an approximate 2-percentage point headwind from the 53rd week in fiscal 2024 FY2025 Outlook | Metric | Expected Growth | | :--- | :--- | | Net Sales | 8.5% to 9.5% | | Adjusted EBITDA | 4% to 5% | - The outlook includes expected net sales of **$145 million** for OWYN, which is the midpoint of the previously provided range[23](index=23&type=chunk) - The 53rd week in FY2024 creates an approximate **2-percentage point** headwind to both Net Sales and Adjusted EBITDA growth in FY2025, which is factored into the outlook[4](index=4&type=chunk)[23](index=23&type=chunk) [Key Assumptions and Headwinds](index=2&type=section&id=Key%20Assumptions%20and%20Headwinds) The company's outlook is based on the assumption of consistent economic conditions. It anticipates a significant gross margin decline of approximately 200 basis points for the full year, driven by inflation and tariff headwinds. To counteract these pressures, the company is increasing its productivity, cost savings, and pricing initiatives - The company is maintaining its outlook for a full-year gross margin decline of approximately **200 basis points** year-over-year[20](index=20&type=chunk) - The margin pressure is attributed to elevated inflation and tariff headwinds, particularly in the second half of the fiscal year[20](index=20&type=chunk) - Management is stepping up productivity, cost savings, and other mitigation efforts to offset headwinds while continuing to invest in long-term growth drivers[2](index=2&type=chunk)[20](index=20&type=chunk) [Financial Position and Cash Flow](index=4&type=section&id=Financial%20Position%20and%20Cash%20Flow) This section reviews the company's balance sheet, debt management, and cash flow performance, highlighting liquidity, leverage, and operational cash generation [Balance Sheet and Debt](index=4&type=section&id=Balance%20Sheet%20and%20Debt) As of May 31, 2025, the company held $98.0 million in cash. It has been actively deleveraging, repaying $50.0 million of its term loan in Q3 and a total of $150.0 million year-to-date. The outstanding principal on its term loan is $250.0 million, resulting in a low Net Debt to Adjusted EBITDA ratio of 0.5x Key Balance Sheet Items (as of May 31, 2025) | Item | Amount (in thousands) | | :--- | :--- | | Cash | $98,008 | | Total Current Assets | $436,939 | | Total Assets | $2,430,388 | | Long-term Debt | $248,920 | | Total Liabilities | $589,437 | | Total Stockholders' Equity | $1,840,951 | - The company repaid **$50.0 million** of its term loan debt during Q3, bringing fiscal year-to-date repayments to **$150.0 million**[19](index=19&type=chunk) - The company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was **0.5x** as of May 31, 2025[20](index=20&type=chunk)[42](index=42&type=chunk) [Cash Flow](index=4&type=section&id=Cash%20Flow) For the thirty-nine weeks ended May 31, 2025, net cash provided by operating activities was $133.1 million, a decrease from $166.8 million in the prior-year period. The decline was primarily attributed to higher uses of working capital, specifically an increase in inventory YTD Cash Flow Summary (in thousands) | Activity | YTD FY2025 | YTD FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $133,087 | $166,755 | | Net Cash used in Investing Activities | ($2,192) | ($2,345) | | Net Cash used in Financing Activities | ($165,206) | ($43,569) | - The decline in cash flow from operations was primarily due to higher uses of working capital, principally a **$23.2 million** increase in inventories[19](index=19&type=chunk)[35](index=35&type=chunk) [Non-GAAP Financial Measures Reconciliations](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted Diluted EPS, and Net Debt to Adjusted EBITDA, to their most directly comparable GAAP equivalents [Reconciliation of EBITDA and Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) The company provides a reconciliation from GAAP Net Income to non-GAAP Adjusted EBITDA. For Q3 FY2025, Net Income of $41.1 million was adjusted for items including interest, taxes, D&A, stock-based compensation ($4.0M), and OWYN integration costs ($5.2M) to arrive at an Adjusted EBITDA of $73.9 million Adjusted EBITDA Reconciliation Summary (Q3, in thousands) | Line Item | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Net Income | $41,102 | $41,334 | | EBITDA | $64,314 | $63,943 | | Adjustments (Stock Comp, Integration, etc.) | $9,540 | $7,931 | | **Adjusted EBITDA** | **$73,854** | **$71,874** | [Reconciliation of Adjusted Diluted Earnings Per Share](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Diluted%20Earnings%20Per%20Share) This section reconciles GAAP Diluted EPS to non-GAAP Adjusted Diluted EPS. For Q3 FY2025, GAAP Diluted EPS of $0.40 was adjusted for items like D&A ($0.05), stock-based compensation ($0.04), and OWYN integration costs ($0.05), net of tax effects, resulting in an Adjusted Diluted EPS of $0.51 Adjusted Diluted EPS Reconciliation Summary (Q3) | Line Item | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $0.40 | $0.41 | | Adjustments (D&A, Stock Comp, etc.) | $0.14 | $0.12 | | Tax Effects of Adjustments | ($0.04) | ($0.03) | | **Adjusted Diluted EPS** | **$0.51** | **$0.50** | [Reconciliation of Net Debt to Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Net%20Debt%20to%20Adjusted%20EBITDA) The report details the calculation of the Net Debt to Adjusted EBITDA ratio. As of May 31, 2025, total debt of $250.0 million less cash of $98.0 million resulted in Net Debt of $152.0 million. Divided by the trailing twelve months Adjusted EBITDA of $289.4 million, this yields a leverage ratio of 0.5x Net Debt to Adjusted EBITDA Calculation (as of May 31, 2025) | Component | Amount (in thousands) | | :--- | :--- | | Total Debt | $250,000 | | Less: Cash | ($98,008) | | **Net Debt** | **$151,992** | | **Trailing 12-Month Adj. EBITDA** | **$289,374** | | **Net Debt to Adj. EBITDA Ratio** | **0.5x** |

DENVER, July 10, 2025 (GLOBE NEWSWIRE) -- The Simply Good Foods Company (Nasdaq: SMPL) (“Simply Good Foods,” or the “Company”), a developer, marketer and seller of branded nutritional foods and snacking products, today reported financial results for the thirteen and thirty-nine weeks ended May 31, 2025. The acquisition of Only What You Need, Inc. ("OWYN") was completed on June 13, 2024. Therefore, the Company's year-ago performance for the thirteen and thirty-nine weeks ended May 25, 2024, does not include ...

分组1 - The Simply Good Foods Company (SMPL) has experienced a decline of 10% despite achieving over 30% revenue growth in the last four years [1] - The company's recent acquisitions have shown significant growth, contributing positively to its overall performance [1]

Core Viewpoint - Simply Good Foods (SMPL) has consistently surpassed earnings estimates and is well-positioned for future earnings reports, making it a strong candidate for investors in the Zacks Food - Confectionery industry [1]. Earnings Performance - In the last reported quarter, Simply Good Foods achieved earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.39 per share by 17.95% [2]. - In the previous quarter, the company was expected to post earnings of $0.46 per share but delivered $0.49 per share, resulting in a surprise of 6.52% [2]. Earnings Estimates and Predictions - Recent estimates for Simply Good Foods have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time [6]. Earnings ESP Analysis - Simply Good Foods currently has an Earnings ESP of +0.79%, suggesting that analysts are optimistic about the company's earnings prospects [8]. - The next earnings report for the company is expected to be released on July 10, 2025 [8].

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst holds certifications as FMVA and FPWMP, which provide skills in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst graduated with a CGPA of 3.6 in Finance from Alexandria University in 2024, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].