The Simply Good Foods pany(SMPL) - 2026 Q1 - Quarterly Results

Financial Performance - Total net sales for Q1 2026 were $340.2 million, a decrease of 0.3% compared to the same period last year, with Quest growing by 9.6% while Atkins and OWYN declined by 16.5% and 3.3%, respectively [4]. - Gross profit was $109.9 million, down 15.8% year-over-year, resulting in a gross margin of 32.3%, a decline of 590 basis points from the prior year [5]. - Net income for the quarter was $25.3 million, a decrease of 33.7% compared to the previous year, with diluted EPS at $0.26 versus $0.38 [10][12]. - Adjusted EBITDA was $55.6 million, down 20.6% year-over-year, with an expected range for the full year between -4% and +1% [11][21]. - Adjusted EBITDA for the thirteen weeks ended November 29, 2025, was $55,624, down 20.5% from $70,068 in the same period last year [38]. - The company reported a basic earnings per share of $0.26, down from $0.38 in the same quarter of the previous year [33]. - Diluted earnings per share for the thirteen weeks ended November 29, 2025, was $0.26, compared to $0.38 for the same period in 2024, a decrease of approximately 31.6% [40]. - Adjusted diluted earnings per share for the thirteen weeks ended November 29, 2025, was $0.39, down from $0.49 for the same period in 2024, reflecting a decrease of approximately 20.4% [40]. Expenses and Costs - Operating expenses decreased by 4.7% to $72.3 million, with selling and marketing expenses down 10.1% to $29.7 million, primarily due to planned reductions for Atkins [6]. - Integration expenses for the thirteen weeks ended November 29, 2025, amounted to $0.06 per share, compared to $0.05 per share in the same period of 2024 [40]. - Stock-based compensation expense was $0.03 per share for the thirteen weeks ended November 29, 2025, slightly down from $0.04 per share in the previous year [40]. - The company incurred business transaction costs of $0.01 per share in the prior year, which were not present in the current period [40]. Cash Flow and Share Repurchase - Cash flow from operations increased to approximately $50.1 million, up from $32.0 million in the comparable year-ago period, attributed to improved working capital [14]. - The company repurchased approximately 5.0 million shares for about $100 million during the quarter, with a total of 7.4 million shares repurchased for $146.6 million year-to-date [14][15]. - The company repurchased common stock amounting to $99,638 during the period [35]. Assets and Liabilities - Total current assets increased to $513,839, up 13.2% from $453,684 as of August 30, 2025 [31]. - Total liabilities rose to $716,511, an increase of 21.6% from $589,212 in the prior period [31]. - Cash and cash equivalents at the end of the period were $194,051, a significant increase from $121,759 at the end of the previous year [35]. - Net debt as of November 29, 2025, was $205,949,000, calculated from total debt of $400,000,000 minus cash and cash equivalents of $194,051,000 [42]. - The Net Debt to Adjusted EBITDA ratio is 0.8x, indicating a manageable level of debt relative to earnings [42]. Outlook and Guidance - The company reaffirmed its fiscal year 2026 outlook, expecting net sales to range between -2% and +2% year-over-year and gross margins to decline by 100 to 150 basis points [8][21]. - The company expects net interest expense to be in the range of $19 to $21 million for the fiscal year, reflecting an increase in the term loan balance [19]. Taxation - The effective tax rate for the quarter was 25.3% [9]. - The company’s overall assumed statutory tax rate for the periods analyzed was 25% [40]. - The tax effect of adjustments for the thirteen weeks ended November 29, 2025, was $(0.05) per share, compared to $(0.04) per share in the same period of 2024 [40].