Simply Good Foods Co (NASDAQ:SMPL) stock rose 2.47% (As on January 9, 11:32:26 AM UTC-4, Source: Google Finance) after the company reported first-quarter earnings that exceeded analyst expectations. The nutritional snacking company saw total consumption growth of 2% during the quarter, driven by double-digit growth from its Quest and OWYN brands, while Atkins performed as expected. Despite the revenue beat, the company’s shares slipped 0.88% following the announcement, as investors digested the mixed brand performance and margin pressure. Net sales decreased marginally by 0.3% compared to the year-ago period, with Quest growing 9.6% while Atkins and OWYN declined 16.5% and 3.3%, respectively. Retail takeaway increased 1.8% overall, with Quest up 12.0% and OWYN up 17.8%, offset by Atkins’ 19.3% decline. Gross margin fell 590 basis points to 32.3%, primarily due to elevated input costs and tariff expenses, which management had previously anticipated. Adjusted EBITDA decreased 20.6% to $55.6 million compared to $70.1 million in the prior-year period. Net income of $25.3 million decreased 33.7% versus the comparable year ago period. At the end of the first quarter of fiscal year 2026, the Company had cash of $194.1 million and an outstanding principal balance on its term loan of $400.0 million, bringing the Company’s quarter-end trailing twelve-month Net Debt to Adjusted EBITDA ratio to 0.8x.

SMPL in the first quarter of FY26 has reported the adjusted earnings per share of $0.39, beating the analysts’ estimates for the adjusted earnings per share of $0.36. The company had reported the adjusted revenue decline of 0.3 percent to $340.2 million in the first quarter of FY26, beating the analysts’ estimates for revenue of $335.93 million. Gross profit of $109.9 million decreased 15.8% versus the comparable year ago period, driven by expected elevated input inflation, including the first full quarter of tariff expenses. Productivity was a modest offset. Operating expenses of $72.3 million decreased 4.7% versus the comparable year ago period.

The company reaffirmed its fiscal 2026 outlook, projecting net sales between -2% and +2% YoY, gross margin declines of 100-150 basis points, and adjusted EBITDA between -4% and +1% YoY. Management expects stronger performance in the second half of the fiscal year as productivity, pricing, and improved costs begin to offset inflation and tariff expenses.

Additionally, Simply Good Foods also announced a $200 million increase to its share repurchase program, bringing the total available to approximately $224 million. During the quarter, the company repurchased about 5 million shares for approximately $100 million.