Simply Good Foods turns again to ex-CEO amid GLP-1 advance

Core Viewpoint - Simply Good Foods is facing challenges with declining sales, particularly in its Atkins brand, but the return of former CEO Joe Scalzo may provide a strategic shift to reignite growth and profitability across its brands [4][10][18]. Financial Performance - In the first quarter, Simply Good Foods reported a net income of $25.3 million, a decline of over 33% [1]. - For the year ending August, the company generated net sales of $1.45 billion, reflecting a 9% increase year-over-year, but net income fell to $103.6 million from $139.3 million due to a $60.9 million impairment on the Atkins brand [3]. Brand Performance - The first quarter saw a 0.3% decline in net sales, attributed to lower sales from Atkins and OWYN, with the latter facing a "product quality issue" [2]. - Quest accounted for 67% of net sales, OWYN at 9%, and Atkins down to 27% after several quarters of decline [11]. Leadership Changes - Joe Scalzo is returning as CEO to replace Geoff Tanner, which analysts view positively due to his familiarity with the company and its brands [6][10]. - Scalzo's previous tenure included significant growth for Atkins, and his return is seen as a potential boost for the brand [19]. Strategic Focus - Analysts expect Scalzo to focus on maintaining momentum for Quest and OWYN while right-sizing the Atkins business, which now represents less than 30% of total sales [12]. - The company is working to modernize the Atkins brand and shift shelf space to more productive products [9]. Market Context - The rise of GLP-1 medications presents an opportunity for Atkins, as the company is conducting studies on the benefits of its products for users of these drugs [13][15]. - There is a belief that Scalzo's leadership could help Atkins regain relevance in a market increasingly influenced by dietary changes associated with GLP-1 usage [18][19].