What Happened?
Shares of packaged food company Simply Good Foods (NASDAQ: SMPL) fell 10.9% in the afternoon session after the company reported weak fiscal second-quarter financial results and lowered its full-year sales and earnings outlook.
Net sales for the quarter declined 9.4% year-over-year to $326 million, missing analysts' estimates. Following the disappointing results, the company cut its fiscal 2026 sales forecast, now expecting a decline of between 7% and 10%. This was a significant downturn from the prior outlook of a 2% decline to 2% growth. Additionally, Simply Good Foods guided for its adjusted EBITDA, a measure of profitability, to fall by roughly 20%. The company also disclosed a large $249 million impairment charge, attributing it to a challenging fiscal year and revised future revenue projections.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Simply Good Foods? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Simply Good Foods’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Simply Good Foods and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 4.6% on the news that Jefferies upgraded the stock to Buy from Neutral. The firm set a new price target of $22.00 for the shares.
According to the analyst note, Simply Good Foods had benefited from a consumer shift toward protein and convenience products, which helped its revenue grow by 10% over the previous four years. The growth was mainly driven by its Quest nutrition bar and protein chip brand, which saw a 17% compound annual growth rate. This strong performance helped to balance out a 5% decline in the company's Atkins weight-loss brand.
Simply Good Foods is down 46.2% since the beginning of the year, and at $10.52 per share, it is trading 72.3% below its 52-week high of $38 from April 2025. Investors who bought $1,000 worth of Simply Good Foods’s shares 5 years ago would now be looking at only $322.45.
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