Financial Data and Key Metrics Changes - Total net sales for Simply Good Foods in Q2 2025 reached $359.7 million, reflecting a 15.2% increase year-over-year, driven by contributions from Owen and organic growth [44] - Adjusted EBITDA increased by 17.6% to $68 million compared to the previous year [48] - Net income grew by 10.9% to $36.7 million, with adjusted diluted EPS rising to $0.46 from $0.40 [50] Business Line Data and Key Metrics Changes - Quest net sales grew by 16.5% in Q2, benefiting from strong retail takeaway and timing of shipments [44] - Atkins net sales declined by 11.5% due to lower consumption and reduced trade inventory [45] - Owen experienced a retail takeaway increase of 52%, with ready-to-drink shakes growing by 53% [36][37] Market Data and Key Metrics Changes - The nutritional snacking category grew by 12% in Q2, marking the 16th consecutive quarter of growth [16] - Quest now represents 60% of the company's net sales, with a strong growth trajectory [18] - Owen's brand awareness and household penetration remain low, indicating significant growth potential [38] Company Strategy and Development Direction - The company aims to lead the nutritional snacking category by leveraging innovation, expanding product availability, and increasing brand awareness [41][42] - Focus on transitioning underperforming Atkins SKUs to faster-turning Quest and Owen products to enhance overall contribution margins [66][70] - Continued investment in Atkins is planned, with new product launches and marketing strategies to stabilize the brand [34][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a dynamic environment with consumer sentiment pressures but remains optimistic about the demand for high-protein, low-sugar products [41] - The company expects full-year net sales growth of 8.5% to 10.5%, with adjusted EBITDA growth of 4% to 6% [54] - Management is confident in the long-term growth potential of Quest and Owen, despite short-term challenges with Atkins [110][112] Other Important Information - The company has repaid $100 million of its term loan since the beginning of the fiscal year, with a net debt to trailing 12-month adjusted EBITDA ratio of 0.7 times [51] - The effective tax rate for Q2 was 25%, compared to 23.7% in the previous year [49] Q&A Session Summary Question: What is driving the reduction in sales guidance for Atkins? - Management noted that the reduction is due to lost display space and distribution at a key customer, which was more significant than anticipated [64][66] Question: What prompted the relaunch of Quest shakes? - The relaunch is based on consumer demand for indulgent, high-protein options, with a focus on flipping the macros of traditional shakes [74][76] Question: How will the company build awareness for Owen? - Initially, the focus will be on expanding distribution, with marketing efforts to follow once a solid distribution base is established [120] Question: What is the outlook for the bar category, specifically for Quest? - Management is optimistic about innovation in the bar category, with new products expected to drive growth [125][126]

Financial Performance - Q2 net sales increased by 152% year-over-year to $3597 million, driven by 44% organic growth and the OWYN acquisition[9, 28] - First half net sales increased 129% year-over-year to $7009 million[28] - Q2 Adjusted EBITDA grew 176% year-over-year[10, 31] - Q2 Net Income increased 109% year-over-year to $367 million[10, 31] - The company reaffirms fiscal year 2025 outlook, expecting net sales growth in the 85% to 105% range year-over-year and Adjusted EBITDA growth in the 4% to 6% range year-over-year[9, 38] Brand Performance - Quest Q2 retail takeaway grew 13%[11] - OWYN Q2 retail takeaway grew 52%, with robust growth across channels[20, 21] - Atkins Q2 retail takeaway declined 10%, attributed to reduced displays and lost club distribution[19] Outlook and Strategy - Fiscal year 2025 net sales for OWYN are expected to be in the $140-$150 million range[21, 38] - The company expects Quest to approach net sales of $1 billion and remains confident in multi-year runway for growth[13] - The company plans to invest behind attractive opportunities, enabling sustainable growth and creating meaningful shareholder value[25]

Financial Performance - Net sales increased by $47.5 million, or 15.2%, to $359.7 million in the second quarter of fiscal year 2025, with OWYN contributing $33.8 million, or 10.8% to reported net sales growth [4]. - Adjusted EBITDA grew by 18% year-over-year to $68.0 million, compared to $57.8 million in the prior year [10]. - Organic net sales growth was 4.4%, primarily driven by the Quest brand, while international organic net sales declined by $2.1 million to $6.4 million [4]. - Net income for the second quarter was $36.7 million, an increase of $3.6 million, or 10.9%, compared to $33.1 million in the prior year [10]. - The company reported a net income of $74,869,000 for the twenty-six weeks ended March 1, 2025, compared to $68,684,000 for the same period in 2024, reflecting an increase of 9.5% [37]. - Net income for the twenty-six weeks ended March 1, 2025, was $74,869,000, compared to $68,684,000 for the same period in 2024, representing an increase of 3.1% [40]. - Adjusted EBITDA for the twenty-six weeks ended March 1, 2025, was $138,069,000, up from $119,805,000 in the prior year, reflecting a growth of 15.2% [40]. - EBITDA for the twenty-six weeks ended March 1, 2025, was reported at $119,510,000, compared to $110,904,000 for the same period in 2024, indicating an increase of 7.3% [40]. Sales and Revenue - The company expects net sales to increase by 8.5% to 10.5% and Adjusted EBITDA to grow by 4% to 6% for fiscal year 2025 [25]. - OWYN's fiscal year 2025 net sales are expected to be in the range of $140-150 million [25]. - Net sales for the thirteen weeks ended March 1, 2025, were $359,655,000, representing a 15.2% increase from $312,199,000 for the same period in 2024 [35]. - Gross profit for the twenty-six weeks ended March 1, 2025, was $260,623,000, up from $231,988,000 in the prior year, indicating a growth of 12.3% [35]. - The OWYN brand generated net sales of $66,060,000 for the twenty-six weeks ended March 1, 2025, compared to no sales in the prior year, indicating successful market entry [38]. Expenses and Costs - Gross profit increased by $13.3 million, or 11.4%, to $130.1 million, resulting in a gross margin of 36.2%, a decrease of 120 basis points year-over-year [5]. - Operating expenses rose by $6.6 million to $75.4 million, with G&A expenses increasing by $6.1 million, largely due to the OWYN acquisition [6]. - Operating expenses for the thirteen weeks ended March 1, 2025, totaled $75,416,000, an increase from $68,787,000 in the same period last year, reflecting a rise of 9.4% [35]. - Stock-based compensation expense for the twenty-six weeks ended March 1, 2025, was $8,792,000, slightly higher than $8,736,000 in the previous year [40]. - Interest expense for the twenty-six weeks ended March 1, 2025, totaled $14,199,000, compared to $11,630,000 for the same period in 2024, reflecting an increase of 21.8% [40]. - The company reported an interest income of $1,477,000 for the twenty-six weeks ended March 1, 2025, down from $2,014,000 in the prior year [40]. Assets and Liabilities - Total current assets increased to $444,467,000 as of March 1, 2025, from $440,280,000 as of August 31, 2024 [33]. - Long-term debt decreased to $298,537,000 as of March 1, 2025, down from $397,485,000 as of August 31, 2024, showing a reduction of 25% [33]. - The company's cash and cash equivalents at the end of the period were $103,682,000, down from $132,530,000 at the beginning of the period, a decrease of 21.7% [37]. - The company's net debt as of March 1, 2025, was $196,318,000, with total debt outstanding under the credit agreement at $300,000,000 [44]. - As of March 1, 2025, the company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was 0.7x [21]. - The trailing twelve months Adjusted EBITDA as of March 1, 2025, was $287,394,000, resulting in a net debt to Adjusted EBITDA ratio of 0.7x [44]. Shareholder Information - The weighted average shares outstanding for diluted earnings per share increased to 101,821,229 for the thirteen weeks ended March 1, 2025, compared to 101,276,575 for the same period in 2024 [35]. - Adjusted diluted earnings per share increased to $0.95 for the twenty-six weeks ended March 1, 2025, compared to $0.82 for the same period in 2024, marking a rise of 15.9% [42]. - The effective tax rate applied to Adjusted Diluted Earnings Per Share adjustments was assumed to be 25% for the reporting periods [42]. Future Outlook - The company expects to achieve synergies from the OWYN acquisition, although specific financial targets were not disclosed [30].

Core Viewpoint - The Simply Good Foods Company reported strong financial results for the second quarter and reaffirmed its fiscal year 2025 outlook, highlighting growth driven by the OWYN acquisition and organic sales growth in its existing brands [2][21][27]. Financial Performance - Net sales increased by $47.5 million, or 15.2%, to $359.7 million for the second quarter, with OWYN contributing $33.8 million to this growth [3][16]. - Adjusted EBITDA grew by 18% year-over-year, reaching $68.0 million, benefiting from favorable commodity prices and strong cost discipline [2][8]. - Net income for the second quarter was $36.7 million, a 10.9% increase from $33.1 million in the prior year [7][8]. Sales Growth - Retail takeaway for Simply Good Foods increased by approximately 7%, with Quest and OWYN showing point-of-sale growth of about 13% and 52%, respectively [4][11]. - Organic net sales grew by 4.4%, primarily driven by the Quest brand, while international organic net sales declined by $2.1 million [3][10]. Operating Expenses - Operating expenses rose to $75.4 million, an increase of $6.6 million compared to the previous year, largely due to the inclusion of OWYN [6][13]. - General and administrative expenses increased by $6.1 million, driven by the OWYN acquisition, with integration costs contributing to this rise [6][13]. Outlook - The company expects net sales to increase by 8.5% to 10.5% for fiscal year 2025, with adjusted EBITDA anticipated to grow by 4% to 6% [7][22]. - The outlook incorporates a headwind of approximately 2 percentage points due to the fifty-third week in fiscal year 2024 [7][27]. Balance Sheet and Cash Flow - As of March 1, 2025, the company had cash of $103.7 million and an outstanding term loan balance of $300 million, having repaid $50 million during the quarter [18][53]. - Cash flow from operations was approximately $63.3 million, down from $94 million in the prior year, primarily due to lower net working capital [18][41]. Acquisition Impact - The acquisition of OWYN, completed on June 13, 2024, is a significant factor in the company's growth, contributing to both net sales and adjusted EBITDA [1][27]. - OWYN's expected net sales for fiscal year 2025 are projected to be in the range of $140-150 million [27]. Management Changes - The company announced a succession plan for its Chief Financial Officer, with Shaun Mara set to retire on July 3, 2025, and Christopher J. Bealer appointed as his successor [20].

Core Viewpoint - The Simply Good Foods Company reported strong financial results for the second quarter and reaffirmed its fiscal year 2025 outlook, driven by the acquisition of OWYN and growth in its core brands, particularly Quest and Atkins [2][3][21]. Financial Performance - Net sales increased by $47.5 million, or 15.2%, to $359.7 million, with OWYN contributing $33.8 million, or 10.8%, to this growth [3][16]. - Adjusted EBITDA grew by 18% year-over-year to $68.0 million, benefiting from favorable commodity prices and strong cost discipline [2][8]. - Net income for the quarter was $36.7 million, a 10.9% increase from $33.1 million in the previous year [8][9]. Brand Performance - Simply Good Foods experienced a 7% increase in total retail takeaway, with Quest and OWYN showing point-of-sale growth of approximately 13% and 52%, respectively [4][11]. - Organic net sales grew by 4.4%, primarily driven by the Quest brand, while international organic net sales declined by $2.1 million [3][10]. Operating Expenses - Operating expenses rose to $75.4 million, an increase of $6.6 million, with selling and marketing expenses slightly up due to the inclusion of OWYN [6][13]. - General and administrative expenses increased by $6.1 million, largely attributed to the OWYN acquisition [6][13]. Outlook - The company expects net sales to increase by 8.5% to 10.5% for fiscal year 2025, with adjusted EBITDA anticipated to grow by 4% to 6% [7][22]. - The outlook incorporates a headwind of approximately 2 percentage points due to the fifty-third week in fiscal year 2024 [7][27]. Balance Sheet and Cash Flow - As of March 1, 2025, the company had cash of $103.7 million and an outstanding term loan balance of $300 million, having repaid $100 million year-to-date [18][19]. - Cash flow from operations was approximately $63.3 million, down from $94 million in the previous year, primarily due to lower net working capital [18][39]. Management Changes - The company announced the retirement of Chief Financial Officer Shaun Mara, effective July 3, 2025, with Christopher J. Bealer set to succeed him [20].

Core Viewpoint - Simply Good Foods (SMPL) is expected to report a year-over-year decline in earnings despite higher revenues for the quarter ended February 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1][3]. Earnings Expectations - The upcoming earnings report is anticipated to show earnings of $0.39 per share, reflecting a -2.5% change year-over-year, while revenues are projected to be $353.48 million, an increase of 13.2% from the previous year [3]. - The stock price may increase if the actual earnings exceed expectations, while a miss could lead to a decline in stock price [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.31% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +0.52% suggests that analysts have recently become more optimistic about the company's earnings prospects, although the stock carries a Zacks Rank of 4, complicating predictions of an earnings beat [10][11]. Earnings Surprise History - In the last reported quarter, Simply Good Foods exceeded the expected earnings of $0.46 per share by delivering $0.49, resulting in a surprise of +6.52% [12]. - The company has beaten consensus EPS estimates in the last four quarters [13]. Conclusion - While the company does not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].

Company Overview - The Simply Good Foods Company is a developer, marketer, and seller of branded nutritional foods and snacking products, headquartered in Denver, Colorado [4] - The company's product portfolio includes protein bars, ready-to-drink shakes, sweet and salty snacks, and confectionery products marketed under the Atkins™, Quest™, and OWYN™ brands [4] - The company aims to lead the nutritious snacking movement and plans to expand its healthy lifestyle platform through innovation, organic growth, and investment opportunities in the snacking space [4] Financial Results Announcement - The company will report financial results for the 13-week fiscal second quarter ended March 1, 2025, on April 9, 2025, before market open [1] - A conference call will be held to discuss these results, featuring comments from the President and CEO, Geoff Tanner, and the CFO, Shaun Mara [1] Conference Call Details - The conference call is scheduled to begin at 6:30 a.m. Mountain time (8:30 a.m. Eastern time) on April 9, 2025 [2] - Investors can participate in the live call by dialing 1-877-407-0792 from the U.S. or 1-201-689-8263 from international locations [2] - The call will be broadcast live over the Internet on the company's website, with a telephone replay available approximately two hours after the call concludes [3]

Core Insights - Quest Nutrition has launched its new Protein Milkshakes, featuring an industry-leading 45 grams of protein per bottle, while keeping sugar and carbohydrates low [1][3] - This launch follows the introduction of Overload Bars in February, which also emphasizes protein content with added flavors [1][2] Product Details - Quest Protein Milkshakes contain 45 grams of high bioavailability complete protein sourced from ultrafiltered milk, with only 2 grams of sugar and 4 grams or less of net carbs [8] - The shakes are available in Chocolate, Vanilla, and Strawberry flavors, providing a rich, indulgent taste [8] - Quest Overload Bars feature 20 grams of protein, 1 gram of sugar, and 4 grams or less of net carbs, with mix-ins like sprinkles and chocolatey chips, available in flavors such as Sundae Funday and Chocolate Explosion [8] Company Positioning - Quest Nutrition aims to lead the protein-forward product market by continuously innovating and expanding its offerings, as demonstrated by the recent product launches [2][3] - The Simply Good Foods Company, which owns Quest, focuses on nutritious snacking and aims to elevate the standards of food products through innovation and investment opportunities [5]

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines factor analysis with classic fundamental analysis to uncover the true story of companies and their stocks, highlighting the importance of future potential over past data [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, which are foundational to modern Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, conducting numerous seminars on the topic [1]

Core Viewpoint - The Simply Good Foods Company has announced a succession plan for its Chief Financial Officer, with Shaun P. Mara set to retire on July 3, 2025, and Christopher J. Bealer expected to succeed him [1][2]. Company Overview - Simply Good Foods is a developer, marketer, and seller of branded nutritional products under the Quest, Atkins, and OWYN brands, aiming to lead the nutritious snacking movement [1][5]. - The company is headquartered in Denver, Colorado, and focuses on innovative products in the consumer packaged food and beverage sector [5]. CFO Transition Details - Shaun P. Mara has been with the company since 2017 and has served as CFO since 2022 [2]. - Christopher J. Bealer will join the company on April 1, 2025, as Senior Vice President of Finance and is expected to take over as CFO upon Mara's retirement [2][4]. - Bealer brings nearly 23 years of experience in consumer packaged goods and has held significant roles at Reckitt Benckiser Group PLC and Whirlpool Corporation [3]. Leadership Insights - CEO Geoff E. Tanner expressed gratitude for Mara's contributions and confidence in Bealer's capabilities to drive future success [4]. - The Board of Directors emphasized the importance of a thoughtful succession planning process and expressed excitement about Bealer's role in the company's growth [4].