5 Must-Read Analyst Questions From Simply Good Foods's Q2 Earnings Call

Simply Good Foods delivered results in line with Wall Street’s expectations for the second quarter, driven by continued double-digit growth in its Quest and Owen brands, which now comprise roughly 70% of the company’s portfolio. CEO Geoff Tanner credited category momentum in high-protein, low-sugar snacks as a key driver, noting, “Quest approaches $1 billion in net sales and continues to see a long runway of opportunity.” However, ongoing declines in the Atkins brand, primarily due to distribution losses and reduced merchandising, weighed on overall performance. Management acknowledged margin pressure from inflation in inputs like cocoa and whey, partially offset by productivity and selective pricing actions.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Simply Good Foods’s Q2 Earnings Call

• Matt Smith (Stifel) asked about the impact of distribution losses at Atkins and how shelf space consolidation would affect sales. CEO Geoff Tanner clarified that while Atkins will face continued double-digit declines, proactive shelf space reallocation should offset losses through gains in Quest and Owen.

• Peter Grom (UBS) probed the slowdown in Owen’s tracked channel growth. Tanner explained the deceleration was anticipated due to lapping prior distribution wins and expressed confidence in re-accelerated gains as new resets take effect.

• Jim Salera (Stephens) inquired about Quest’s SKU expansion and capacity planning. Tanner said there is no set SKU target, emphasizing ongoing investment to expand salty snack offerings and out-of-aisle distribution as key growth drivers.

• Kaumil Gajrawala (Jefferies) questioned whether Atkins’ declines were purely distribution-driven or also reflected underlying demand. Tanner said Atkins is essentially flat when adjusting for distribution, reaffirming demand for core SKUs.

• Alexia Howard (Bernstein) asked about the impact of new Texas additive warning label legislation. Tanner responded that the company’s portfolio is largely insulated, with minimal reformulation needed and no significant cost implications anticipated.

Catalysts in Upcoming Quarters

Looking ahead, our analyst team will be watching (1) the pace and breadth of new distribution wins for Quest and Owen, especially outside traditional aisles and in new retail channels; (2) the effectiveness of margin recovery initiatives, including productivity programs and pricing actions, as input cost pressures persist; and (3) the impact of further shelf space rationalization at Atkins on overall portfolio mix. Progress in brand innovation and successful execution of channel expansion strategies will also be key markers of sustainable growth.

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