Breaking Down The Simply Good Foods Company (SMPL) Financial Health: Key Insights for Investors

You're looking at The Simply Good Foods Company, and the headline numbers from their fiscal year 2025 results are giving you whiplash. Honestly, it's a classic tale of two companies under one roof: on one hand, you saw strong top-line momentum with net sales hitting $1,450.9 million, a solid 9% increase on a reported basis, but on the other, net income dropped sharply to $103.6 million from $139.3 million the year prior. Here's the quick math: that drop is largely due to a significant $60.9 million non-cash impairment charge tied to the Atkins brand, which tells you exactly where the near-term risk lies. The core opportunity is clear, though: the Quest and OWYN brands are driving the future, showing double-digit consumption growth, while the legacy Atkins business is struggling for shelf space. That brand divergence is the single most important thing to understand right now. We need to map out if the $278.2 million in Adjusted EBITDA growth is enough to offset the drag from Atkins and the cost pressures they're seeing, especially after the stock plunged 19.43% following the Q4 earnings release.

Revenue Analysis

You're looking for a clear picture of where The Simply Good Foods Company (SMPL) actually makes its money, and the fiscal year 2025 results give us a defintely mixed but instructive view. The headline figure is strong: The Simply Good Foods Company delivered total net sales of $1,450.9 million for the fiscal year ending August 30, 2025, which marks a reported increase of 9.0% over the prior year.

But here's the quick math investors need to see: that growth is not uniform, and it's heavily influenced by a key acquisition. The reported 9.0% increase includes a 7.9% contribution from the Only What You Need (OWYN) acquisition, which closed in the prior fiscal year. When you strip out the acquisition effect and the extra week in the 2024 fiscal year, the organic net sales growth-the growth from brands The Simply Good Foods Company has owned for more than twelve months-was a more modest 3.0%. That's the core health of the legacy business.

The primary revenue streams show a clear divergence in performance. The company's strategy is built on three major nutritional snacking brands: Quest, Atkins, and the newly integrated OWYN. Quest and OWYN are the growth engines, while Atkins is the headwind.

• Quest: The undisputed leader, representing 63% of full-year net sales. Retail takeaway-a measure of consumer purchases-grew robustly by about 12% for the full year.
• Atkins: The legacy brand, now only 25% of net sales. Its retail takeaway declined about 10% for the full year, reflecting a challenging market for its specific diet positioning.
• OWYN: The plant-based protein brand, contributing 10% of net sales. Its retail takeaway surged by approximately 34% for the full year, validating the acquisition strategy.
• International: The smallest segment, making up the remaining 2%.

The most significant change in the revenue profile is the shift in brand power. The combined Quest and OWYN brands now account for about 73% of total net sales, and they are driving all the momentum. The Atkins brand, on the other hand, is under serious pressure; the company even took a $60.9 million non-cash impairment loss on the brand's intangible assets in fiscal 2025 due to its performance and updated revenue projections. This is a clear signal that the future of The Simply Good Foods Company's revenue is tied to the high-protein, low-sugar, and plant-based trends championed by Quest and OWYN. You can dive deeper into who is betting on this shift by Exploring The Simply Good Foods Company (SMPL) Investor Profile: Who's Buying and Why?

To summarize the brand contributions for the full fiscal year 2025:

The key action for you is to monitor the Quest and OWYN retail takeaway figures. If those double-digit growth rates slow, the total revenue picture will quickly flatten, given the structural decline in Atkins' contribution. The company is now a two-engine growth story, and the health of those two engines is paramount.

Profitability Metrics

You're looking at The Simply Good Foods Company (SMPL) because you want to know if their margins can hold up against inflation and brand shifts. The short answer is that their core operations are highly efficient, but a major brand impairment in fiscal year 2025 (FY25) significantly compressed the bottom line.

For the full fiscal year 2025, The Simply Good Foods Company reported net sales of $1,450.9 million and a gross profit of $525.7 million. This translates to a Gross Profit Margin of 36.2%. To be fair, that margin is well above the 21.59% average for the broader Food Processing industry as of the first quarter of 2025, reflecting the premium pricing and differentiated nature of their nutritional snacking products.

The operational efficiency (Operating Profit Margin) is where the company shines. Here's the quick math: with a calculated operating profit of approximately $157.7 million, the Operating Margin is about 10.87%. That's a strong number, significantly outpacing the S&P 500 Consumer Staples sector's trailing twelve-month (TTM) Operating Margin of 7.0667% as of September 2025. This suggests their cost management, outside of the direct cost of goods sold (COGS), is defintely working, especially with the integration of the OWYN acquisition.

Still, the Net Profit Margin for FY25 came in at about 7.14%, based on net income of $103.6 million. This is actually lower than the general all-industry average net margin of 8.54%. What this estimate hides is the one-time, non-cash loss: a $60.9 million impairment charge related to the Atkins brand. This charge, a direct result of Atkins's sales decline, is a critical data point showing the financial impact of a struggling legacy brand.

The trend is clear: Gross Margin declined by 220 basis points year-over-year, driven by elevated input costs and the lower-margin OWYN business being fully included. However, the growth engines-Quest and OWYN-are performing well, with Quest growing 13.4% organically in net sales. This portfolio split means you have to look past the consolidated margin dip and focus on the strong growth in the high-protein, low-sugar category. For more detail on who's betting on this split, check out Exploring The Simply Good Foods Company (SMPL) Investor Profile: Who's Buying and Why?

• Gross margin declined to 36.2% due to inflation and OWYN inclusion.
• Quest and OWYN drove strong retail takeaway growth, offsetting Atkins's 12.9% decline.
• Cost discipline helped maintain a superior operating margin.

Your action here is to model future profitability by separating the high-growth, high-margin Quest/OWYN segment from the declining Atkins segment, and then apply a more normalized tax rate to the Net Income, ignoring the one-time impairment charge.

Debt vs. Equity Structure

The Simply Good Foods Company (SMPL) operates with a very conservative balance sheet, preferring to fund its growth mostly through equity and retained earnings rather than heavy debt. This is a deliberate, low-risk approach, and it's a strong signal to the market.

You can see this clean structure in the numbers. As of the end of fiscal year 2025, the company's outstanding principal balance on its term loan was a manageable $250.0 million. The company's focus on debt reduction was clear throughout the year, with total term loan repayments reaching $150 million in fiscal year 2025. That's a defintely solid use of cash flow.

Here's the quick math on their leverage compared to the industry:

• The Simply Good Foods Company Debt-to-Equity Ratio: 0.14
• Packaged Foods & Meats Industry Average: 0.7084

A ratio of 0.14 means The Simply Good Foods Company is using only 14 cents of debt for every dollar of equity capital. This is significantly lower than the industry's average of about 0.71, which tells you they have a massive capacity for additional borrowing if a major acquisition or strategic investment opportunity arises. They are not highly leveraged.

The company is not avoiding debt entirely, but they are using it strategically. Just recently, on November 19, 2025, the company entered into an amendment to its credit agreement to establish a new $150,000,000 incremental term loan facility. This new debt is earmarked for working capital, general corporate purposes, growth capital expenditures, and repurchasing capital stock. This is a smart move: borrow at favorable rates to fund growth and shareholder returns, while still maintaining a low overall debt profile.

The new financing activity also pushed out their maturity schedule, which is a key risk-mitigation step. The maturity date for the revolving credit facility is now extended to December 16, 2029, and the term loan facility maturity is extended to March 17, 2030. This pushes any near-term refinancing pressure far into the future, locking in current interest rate terms (SOFR plus 2.00% for revolving loans with a 0.00% floor for all term SOFR loans) and giving management a clear runway to execute their long-term strategy. This balance of paying down old debt while issuing new, long-dated debt for growth is the mark of a financially mature company. You can read more about their corporate vision here: Mission Statement, Vision, & Core Values of The Simply Good Foods Company (SMPL).

Liquidity and Solvency

You need to know if The Simply Good Foods Company (SMPL) can easily cover its short-term bills, and the answer is a resounding yes. The company's liquidity position for fiscal year (FY) 2025 is defintely strong, indicating a healthy buffer against near-term financial obligations.

The Current Ratio-which compares current assets (cash, inventory, receivables) to current liabilities (payables, short-term debt)-was a robust 3.6x for FY 2025. This means SMPL has $3.60 in current assets for every dollar of current liabilities. Even better, the Quick Ratio (or Acid-Test Ratio), which strips out inventory to show the most liquid position, stood at 2.30. For a consumer-packaged goods company, these numbers are excellent, signaling that short-term cash needs are not an issue.

Still, you should look deeper than just the ratios. Working capital trends show that cash flow from operations (CFO) declined to $178 million in FY 2025 from approximately $216 million in the prior year. This drop was largely due to higher uses of working capital, principally inventory, and the integration costs following the OWYN Acquisition. This is a necessary investment for growth, but it's a cash drain you must monitor. They are putting cash to work in the business.

Looking at the full cash flow statement for FY 2025 shows a clear focus on debt reduction and shareholder returns, which is a sign of management confidence. Here's the quick math on the major movements:

• Operating Cash Flow: $178 million
• Investing Cash Flow (Capital Expenditures): Approximately -$20 million
• Financing Cash Flow (Debt Repayment): -$150.0 million in term loan debt
• Financing Cash Flow (Stock Repurchase): Approximately -$50.9 million of stock repurchased

The company is effectively using its strong operating cash flow to deleverage. Their balance sheet strength is further highlighted by a trailing twelve-month Net Debt to Adjusted EBITDA ratio of just 0.5x at the end of FY 2025, which is exceptionally low for a company in a growth phase. Plus, they ended the year with $98.5 million in cash.

What this estimate hides is the recent move to secure more flexibility. In November 2025, SMPL amended its credit agreement to establish a $150 million incremental term facility specifically for working capital and corporate purposes. While this adds debt capacity, it also shows a proactive approach to maintaining liquidity and funding future growth initiatives, especially as they commit $30-$40 million to enhance salty snack production capacity. This is a smart move to ensure capital is available without disrupting the core business. You can read more about this in Breaking Down The Simply Good Foods Company (SMPL) Financial Health: Key Insights for Investors.

Valuation Analysis

You want to know if The Simply Good Foods Company (SMPL) stock is a good value right now, and the short answer is it looks like a classic Hold situation, but with significant upside potential if management executes their growth plan. The stock is trading at a depressed level, down nearly 47% over the last 12 months, which makes its valuation multiples look much more attractive than they have in the past.

As of mid-November 2025, The Simply Good Foods Company's stock is trading near its 52-week low of $18.47, a huge drop from its 52-week high of $40.53. This steep decline is largely due to market worries over the Atkins brand's struggles and the impact of GLP-1 weight-loss drugs on the entire nutritional snacking category. That said, the Quest and OWYN brands are still showing robust growth, which is the defintely bright spot.

Here's a look at the core valuation ratios based on the company's full fiscal year 2025 results (ended August 30, 2025), which help map out the current risk/reward profile:

• Price-to-Earnings (P/E) Ratio: The trailing twelve-month (TTM) P/E is about 19.85, based on the recent stock price and the reported diluted EPS of $1.02 for FY2025. This is a significant discount to the broader market average P/E of around 38.15.
• Price-to-Book (P/B) Ratio: The P/B ratio is a low 1.12, which suggests you are paying very little over the company's book value (assets minus liabilities). For a consumer packaged goods company, this is quite low.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA is 11.89. This multiple is often a better measure for companies with debt, and The Simply Good Foods Company's net debt to adjusted EBITDA is a healthy 0.5x, so the debt isn't a major concern.

The company does not pay a dividend, so you won't find a dividend yield or payout ratio to factor into your income analysis. The focus here is purely on capital appreciation driven by earnings growth.

Most analysts are sitting on the fence right now. The consensus rating from eleven firms is a Hold, which is split with four Buy ratings, five Hold ratings, and two Sell ratings. The average 12-month price target is set at $33.11, which implies a substantial upside from the current price near $19.69. The range is wide, from a low of $23.00 to a high of $43.00, reflecting the uncertainty around the Atkins brand's future.

What this estimate hides is the market's fear that the Quest brand's growth (up 11.5% in FY25) won't fully offset the Atkins brand's decline (down 14% in FY25). If you believe the Quest and OWYN brands can continue their momentum and that the overall nutritional snacking category will stabilize, the current valuation ratios suggest a compelling entry point. If you want to dive deeper into who is actually buying and selling this stock, you should check out Exploring The Simply Good Foods Company (SMPL) Investor Profile: Who's Buying and Why?

Your action item is to compare that 11.89 EV/EBITDA multiple to its peers; if it's lower, the market is pricing in a lot of risk, and you might have an opportunity.

Risk Factors

You're looking at The Simply Good Foods Company (SMPL) and seeing a strong overall net sales number for fiscal year 2025, which hit $1,450.9 million, but the risks are buried in the brand-level performance. The core issue is brand divergence: Quest and OWYN are driving growth, but the legacy Atkins brand is a significant drag on financial health and sentiment. This isn't a systemic failure, but it is a major portfolio management challenge you need to watch.

The biggest near-term risk is the continued decline of the Atkins brand, which necessitated a $60.9 million impairment charge in the fourth quarter of 2025. Atkins' retail consumption was down a staggering 12% in Q4 and 10% for the full fiscal year 2025. This decline is not just about consumer preference; it's an operational headache tied to distribution losses in key club and mass retail channels. Losing shelf space hurts. The company's overall net income for the year dropped to $103.6 million from $139.3 million last year, largely due to this impairment.

External and financial risks are centered on margin compression (gross margin dropped to 34.3% in Q4 2025) and a cautious 2026 outlook. Inflationary pressures on key commodity inputs, like cocoa, continue to squeeze gross margins, which were expected to decline by approximately 200 basis points for the full year. Plus, the company is signaling a significant near-term slowdown, projecting fiscal year 2026 net sales to range between -2% and +2% year-over-year, with Adjusted EBITDA expected to range between -4% and +1%.

Here's the quick math on the brand split:

To be fair, management has clear mitigation strategies. They've largely completed the integration of OWYN and are using their strong cash flow-cash flow from operations was $178.5 million for the year-to strengthen the balance sheet. They repaid $150 million of their term loan debt in 2025, leaving a manageable outstanding principal balance of $250.0 million. Operationally, they are shifting focus and investing $30-$40 million to boost salty snack production capacity, which is a key growth area for Quest. They are defintely moving capital to where the growth is.

Clear actions to watch for include:

• Monitoring if the increased marketing spend on Quest and OWYN can offset the Atkins decline.
• Tracking if new pricing and productivity efforts can stop the gross margin erosion.
• Watching for any further impairment charges on the Atkins brand in the coming quarters.

For a deeper dive into the full financial picture, you can check out Breaking Down The Simply Good Foods Company (SMPL) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at The Simply Good Foods Company's (SMPL) future, and the quick takeaway is this: the company is successfully pivoting its portfolio toward the high-growth, high-protein, clean-label segments, but the near-term outlook for 2026 shows a pause in top-line growth. They delivered a solid fiscal year 2025, but the market is now watching how they manage the integration of their recent acquisition and the continued decline of their legacy brand.

The company finished fiscal year 2025 with net sales of $1,450.9 million, a 9% increase, and grew Adjusted EBITDA to $278.2 million. That's a solid year, but the growth engine is clearly running on two cylinders: Quest and OWYN (Only What You Need, Inc.).

Key Growth Drivers: Quest, OWYN, and Innovation

The core of The Simply Good Foods Company's growth strategy is simple: double down on the generational shift toward high-protein, low-sugar, and low-carb products. This means Quest and the newly acquired OWYN are the stars, representing nearly three-quarters of total net sales now. Quest is the category disruptor, with consumption up 12% and net sales over 13% in fiscal year 2025, helped by its fast-growing salty snacks business.

The OWYN acquisition, a plant-based ready-to-drink (RTD) shake brand, was a major strategic move in 2024 and contributed significantly in 2025, with net sales hitting $145 million. The integration is largely complete, and management is set to leverage the full scale of the company to drive its growth in 2026. Still, the Atkins brand remains a headwind, with consumption down 10% for the full year, mainly due to distribution losses.

• Accelerate Quest Salty Snacks: Expanding production capacity for the second time in two years.
• Clean-Label Leadership: Leveraging OWYN's allergen-free, vegan platform in the fast-growing RTD segment.
• New Product Platforms: Launching innovation like the Quest Overload bar to bring excitement to the core bar segment.

Projections and Financial Discipline

While fiscal year 2025 delivered strong reported net sales growth of 9%, the organic sales growth was a more modest 3%. This is why the near-term outlook is a bit sobering. For fiscal year 2026, the company expects net sales growth to range between -2% and +2%, with Adjusted EBITDA growth ranging from -4% to +1%. Here's the quick math: the growth from Quest and OWYN is expected to be largely offset by the continued decline in Atkins and increased marketing spend to support the growing brands.

To be fair, the company is using its strong cash flow to improve its balance sheet, which is a clear positive action. In fiscal year 2025, they paid off $150 million of term loan debt and repurchased over $50 million of their stock. This financial discipline gives them optionality for future mergers and acquisitions (M&A).

Competitive Edge and Strategic Focus

The Simply Good Foods Company has a clear competitive advantage (moat) in its operating model and market position. They run an asset-light model, meaning they don't own manufacturing facilities. This reduces fixed costs and allows them to invest heavily in R&D and marketing, supporting faster product development cycles to adapt to consumer trends. Plus, their category leadership role with major US retailers is defintely a strength.

Their vision is clear: be the scaled leader in high-protein, low-sugar, and low-carb food and beverage. You can read more about their long-term focus here: Mission Statement, Vision, & Core Values of The Simply Good Foods Company (SMPL). The strategic action for investors is to watch the Quest and OWYN retail takeaway numbers closely in 2026; the success of this pivot will determine if the company can return to mid-to-high single-digit growth in 2027.