Simply Good Foods Shares Plunge Over Struggles With Flagship Atkins Brand

Simply Good Foods Co. has faced significant challenges in fiscal 2025, with its shares dropping sharply following disappointing financial results and a downbeat outlook, particularly for its flagship Atkins brand. The company reported a 1.8% decline in fourth-quarter sales to $369 million and a net loss of $12.4 million, influenced by a $60.9 million impairment charge related to Atkins, which continues to lose retail shelf space amid fierce competition and changing consumer preferences. Despite the struggles with Atkins, other brands like Quest and OWYN demonstrated strong growth, with Quest now representing 63% of net sales, reflecting a strategic pivot towards higher-growth products. Elevated input costs, especially for cocoa, have pressured margins, causing gross profit to fall 13.3% and adjusted EBITDA to decline 14.5%, with further margin contraction expected into fiscal 2026. Management remains committed to revitalizing Atkins through innovation and SKU rationalization, supported by trends such as increased use of GLP-1 weight-loss drugs that may boost demand for protein- and fiber-rich foods. However, the company's cautious revenue outlook and ongoing margin pressures have led to a nearly 50% decline in its stock price year-to-date, highlighting the challenges it faces in stabilizing growth and profitability.