SMPL Q4 CY2025 Deep Dive: Quest and OWYN Power Growth as Margin Pressure Persists

Packaged food company Simply Good Foods (NASDAQ:SMPL) reported Q4 CY2025 results exceeding the market’s revenue expectations, but sales were flat year on year at $340.2 million. Its non-GAAP profit of $0.39 per share was 8.2% above analysts’ consensus estimates.

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StockStory’s Take

Simply Good Foods delivered a Q4 marked by steady sales and a notable beat on profitability, as reflected by the positive market reaction following earnings. Management attributed the quarter’s performance to robust consumption growth in the Quest and OWYN brands, which together accounted for the majority of net sales. CEO Geoff Tanner pointed to “double-digit growth from Quest and OWYN” and highlighted the company’s ongoing execution of productivity initiatives to offset rising input costs and tariffs. Although declines in the Atkins brand tempered overall results, strong innovation and distribution gains supported the company’s showing.

Looking forward, Simply Good Foods’ guidance relies on continued momentum in its high-protein, low-sugar snack brands, while navigating headwinds from commodity inflation and tariffs. Management emphasized planned innovation launches, expected distribution growth, and productivity gains as drivers for a second-half inflection in both revenue and profit. CFO Chris Bealer stated, “We have good line of sight with our supply coverage,” citing anticipated benefits from lower cocoa costs and tariff relief. However, management acknowledged risks from whey price increases and the pacing of improvement in Atkins, signaling a cautious but focused outlook.

Key Insights from Management’s Remarks

Management credited Q4 performance to strong execution in Quest and OWYN, offset by ongoing challenges in Atkins and higher input costs. Key initiatives focused on innovation, distribution, and operational productivity.

• Quest brand momentum: Quest delivered 12% growth in consumption, underpinned by new product innovation and expanded distribution, particularly in salty snacks. Management cited a 40% increase in salty snack consumption and a steady rise in household penetration, supported by new flavors and channel-specific packaging.
• OWYN recovery underway: OWYN’s consumption grew 18% driven by distribution-led gains and improved product quality. Management increased marketing investment, aiming to convert low brand awareness into higher household penetration, and noted progress resolving prior product quality issues.
• Atkins remains under pressure: Atkins experienced a 19% consumption decline due to lost distribution, particularly at club retailers. Management initiated brand modernization, including new packaging, a lower price-point 4-pack, and refreshed marketing, with early signs of improved trial and repeat rates.
• Input cost and tariff headwinds: Margin pressure was attributed to elevated cocoa prices, new tariffs, and inflation across key ingredients. Management extended supply coverage at more favorable prices, especially for cocoa, with benefits expected to materialize late in the year.
• Productivity and cost initiatives: The company’s productivity program, launched 18 months ago, generated cost savings and is expected to support margin recovery over the coming quarters. Management highlighted continued investment in supply chain and operational efficiency.

Drivers of Future Performance

Simply Good Foods expects momentum in Quest and OWYN, productivity gains, and easing input costs to partially offset lingering pressure from tariffs and commodity inflation.

• Innovation and distribution growth: Management plans to launch new products and expand shelf presence, particularly in the Quest salty snack and OWYN plant-based lines. CEO Geoff Tanner highlighted a robust innovation pipeline and new distribution wins as cornerstones for accelerating second-half growth.
• Margin recovery drivers: CFO Chris Bealer pointed to anticipated relief on cocoa costs and tariffs later in the year, in addition to ongoing productivity programs. However, rising whey prices remain a headwind, and the company expects gross margins to stabilize before gradually improving.
• Atkins stabilization efforts: The company is working to modernize the Atkins brand with updated packaging, lower-priced offerings, and targeted marketing, aiming to stem distribution losses and improve repeat rates. Management believes early results from a clinical study related to GLP-1 weight loss drugs could help reposition Atkins for future growth.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will look for (1) evidence of improved momentum in Quest Bars and further gains in salty snack distribution, (2) stabilization of Atkins consumption and signs of success in brand modernization efforts, and (3) margin recovery as lower cocoa costs and tariff relief begin to flow through. The impact of new product launches and the pace of household penetration growth in OWYN will also be closely watched.

Simply Good Foods currently trades at $20.63, up from $19.37 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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