Simply Good Foods (SMPL) shares skyrocket, what you need to know
What happened?
Shares of packaged food company Simply Good Foods (NASDAQ:SMPL) jumped 8.2% in the afternoon session after the company reported fiscal fourth-quarter net sales and adjusted diluted earnings per share above Wall Street expectations, and forecast a fiscal 2027 sales decline alongside wider gross margins. According to a company press release, adjusted diluted earnings per share was 44 cents, above the consensus estimate of 42 cents. Net sales were $333.3 million, above the projected $327.9 million, compared with $369.0 million a year earlier. Net income was $30.5 million. For fiscal 2027, the company expects net sales to decline 13% to 17% and adjusted EBITDA to decline 9% to 14%, and it expects GAAP gross margins to expand 250 to 300 basis points. On the earnings call, management said it raised prices by close to a double digit and expects that to move gross margins closer to a historic level of about 40%. The fiscal 2027 sales decline reflects weaker consumption, the volume impact of that price increase, and distribution losses. Management expects the first quarter to be the weakest, with sales, gross margin, and adjusted EBITDA stronger in the second half as the price impact fades and higher marketing spending, led by Quest, improves consumption. The company is reinvesting part of the margin recovery into its brands.
The shares closed the day at $10.86, up 11.4% from the previous close.
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What is the market telling us
Simply Good Foods’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 10.9% on the news that 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.
Simply Good Foods is down 44.5% since the beginning of the year, and at $10.86 per share, it is trading 49.3% below its 52-week high of $21.40 from January 2026. Investors who bought $1,000 worth of Simply Good Foods’s shares 5 years ago would now be looking at only $270.49.
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