Cuộc họp báo cáo kết quả kinh doanh quý 4 năm tài chính 2026 của Simply Good Foods (SMPL): Triển vọng doanh số năm tài chính 2027 và tái thiết lập biên lợi nhuận

Simply Good Foods Company (NASDAQ: SMPL) đã báo cáo doanh số và mức tiêu thụ yếu hơn trong quý 4 năm tài chính 2026, do áp lực đối với các thương hiệu Atkins và OWYN đã lấn áp đà tăng trưởng tiếp diễn của các sản phẩm snack mặn Quest. Ban lãnh đạo đang ưu tiên định giá, năng suất và đầu tư nhiều hơn cho thương hiệu trong năm tài chính 2027, đồng thời cảnh báo rằng áp lực sản lượng trong ngắn hạn sẽ khiến quý 1 trở thành giai đoạn thách thức nhất.

Điểm tin chính

• Doanh thu thuần trong quý 4 năm tài chính 2026 giảm 9,7% so với cùng kỳ năm trước xuống 333,3 triệu USD, trong khi EBITDA điều chỉnh giảm 13,2% xuống 57,5 triệu USD.
• Tổng mức tiêu thụ bán lẻ toàn công ty giảm 8,4%. Sức mua bán lẻ của Quest giảm 2,1%, Atkins giảm 22,6% và OWYN giảm 7,0%.
• Simply Good Foods đã thực hiện tăng giá tiệm cận mức hai chữ số đối với phần lớn danh mục sản phẩm. Ban lãnh đạo dự kiến độ co giãn của cầu sẽ cao hơn mức gần đây, với tác động lớn nhất đến sản lượng tập trung vào nửa đầu năm tài chính 2027.
• Trong năm tài chính 2027, ban lãnh đạo dự báo doanh thu thuần sẽ giảm từ 13% đến 17% và EBITDA điều chỉnh giảm từ 9% đến 14%, trong khi biên lợi nhuận gộp theo GAAP cải thiện từ 250 đến 300 điểm cơ bản.
• Công ty dự kiến quý 1 năm tài chính 2027 sẽ là quý yếu nhất, với doanh số giảm từ 19% đến 22% và EBITDA điều chỉnh giảm từ 28% đến 33% do áp lực tăng giá trùng với thời điểm gia tăng đầu tư tiếp thị.
• Ban lãnh đạo kỳ vọng kết quả kinh doanh sẽ cải thiện dần trong năm, dẫn đầu là Quest, khi áp lực sản lượng liên quan đến giá cả hạ nhiệt, mức nền so sánh trở nên thuận lợi hơn và các chương trình tiếp thị mới phát huy hiệu quả.

Dữ liệu tài chính chính

Simply Good Foods đã mua lại 11,7 triệu cổ phiếu với giá khoảng 213 triệu USD trong năm tài chính 2026. Tính đến ngày 26 tháng 10 năm 2026, hạn mức mua lại cổ phiếu còn lại khoảng 141 triệu USD.

Kết quả kinh doanh và hoạt động

Quest

Quest vẫn là thương hiệu mạnh nhất của công ty, mặc dù sức mua bán lẻ trong quý 4 năm tài chính giảm 2,1%. Mảng snack mặn tăng trưởng khoảng 13%, nhờ việc ra mắt dòng snack vị dưa chuột muối Dill Pickle. Tỷ lệ thâm nhập hộ gia đình tăng khoảng 50 điểm cơ bản lên 20,2%.

Mảng thanh dinh dưỡng giảm khoảng 6%, phản ánh sự thay đổi danh mục tại kênh bán sỉ, các sản phẩm đổi mới ngoài mảng cốt lõi kém hiệu quả hơn và sự cạnh tranh gia tăng. Ban lãnh đạo cho biết nguồn lực trong năm tài chính 2027 sẽ tập trung vào thanh dinh dưỡng và snack mặn, hai mảng chiếm khoảng 80% danh mục sản phẩm của Quest. Quest dự kiến sẽ ghi nhận sự cải thiện mạnh mẽ nhất trong số ba thương hiệu trong nửa cuối năm.

Atkins

Sức mua bán lẻ của Atkins giảm 22,6%, trong khi tỷ lệ thâm nhập hộ gia đình giảm khoảng 210 điểm cơ bản xuống 8,3%. Ban lãnh đạo cho rằng sự suy yếu này chủ yếu do khả năng thu hút người tiêu dùng mới kém hơn, tốc độ bán hàng chậm lại và kéo theo việc thu hẹp mạng lưới phân phối.

Vào tháng 9, công ty đã khởi động một chiến dịch mới hướng tới những người từng sử dụng thuốc GLP-1 đang muốn duy trì cân nặng, với việc Rob Lowe trở lại làm người đại diện. Ban lãnh đạo dẫn nghiên cứu ước tính rằng có khoảng 23 triệu người trưởng thành tại Mỹ là những người từng dùng hoặc sử dụng ngắt quãng liệu pháp GLP-1. Mục tiêu cho năm tài chính 2027 là cải thiện khả năng thu hút khách hàng mới, ổn định tỷ lệ thâm nhập hộ gia đình và phục hồi tốc độ bán hàng của các sản phẩm cốt lõi.

OWYN

Sức mua bán lẻ của OWYN giảm 7,0%, và tỷ lệ thâm nhập hộ gia đình giảm khoảng 30 điểm cơ bản xuống 4,0%. Tuy nhiên, các sản phẩm thức uống pha sẵn và dạng bột cốt lõi vị sô-cô-la và vani tăng trưởng ở mức một chữ số ở vùng cao.

Ban lãnh đạo cho biết tốc độ bán hàng yếu ở các mặt hàng không cốt lõi sẽ dẫn đến sụt giảm phân phối trong 6 đến 9 tháng tới. Công ty đang tập trung trở lại vào các sản phẩm cốt lõi và nhóm người tiêu dùng tìm kiếm đạm thực vật, thành phần lành mạnh (clean-label) và dinh dưỡng thân thiện với người bị dị ứng. Nghiên cứu của công ty chỉ ra rằng khoảng 18% hộ gia đình tại Mỹ tìm kiếm các lợi ích chức năng này.

Dự báo của Ban lãnh đạo

Trong quý 1 năm tài chính 2027, ban lãnh đạo dự báo:

• Doanh thu thuần giảm từ 19% đến 22%.
• Biên lợi nhuận gộp theo GAAP tăng khoảng 100 điểm cơ bản.
• EBITDA điều chỉnh giảm từ 28% đến 33%.

Triển vọng này đã bao gồm các xu hướng tiêu dùng hiện tại, tác động sản lượng từ đợt tăng giá tháng 9, tổn thất phân phối và sản lượng luân chuyển tại kênh bán sỉ thấp hơn. Ban lãnh đạo dự kiến xu hướng doanh số, biên lợi nhuận gộp, EBITDA điều chỉnh và biên EBITDA điều chỉnh trong nửa cuối năm sẽ mạnh mẽ hơn so với nửa đầu năm.

Công ty cũng dự kiến một chương trình tối ưu chi phí nhân sự sẽ giúp tiết kiệm khoảng 8 triệu USD mỗi năm. Khoảng 40% đã đạt được trong năm tài chính 2026, phần còn lại dự kiến đạt được trong năm tài chính 2027.

Rủi ro và các lĩnh vực trọng tâm

• Mức tăng giá tiệm cận hai chữ số có thể tạo ra áp lực lớn hơn bình thường lên sản lượng. Ban lãnh đạo cho biết các đợt tăng giá nhỏ hơn gần đây có độ co giãn khoảng 1,2 lần, nhưng đợt điều chỉnh giá hiện tại đã vượt qua các ngưỡng mới và làm tăng độ không chắc chắn.
• Các xu hướng tiêu dùng khi bước vào năm tài chính 2027 yếu hơn so với kỳ vọng của ban lãnh đạo, tạo ra điểm khởi đầu khó khăn cho cả ba thương hiệu.
• Hiệu quả từ các chiến dịch tiếp thị mới vẫn chưa chắc chắn vì các chương trình này mới chỉ được triển khai trên thị trường từ tháng 9.
• Atkins tiếp tục đối mặt với áp lực suy giảm tỷ lệ thâm nhập hộ gia đình và điểm phân phối, trong khi OWYN dự kiến sẽ sụt giảm thêm điểm phân phối ở các sản phẩm không cốt lõi trong 6 đến 9 tháng tới.
• Sự cải thiện trong năm tài chính 2027 phụ thuộc vào việc áp lực tăng giá giảm bớt, đầu tư tiếp thị thúc đẩy tiêu dùng và mức nền so sánh theo năm trở nên thuận lợi hơn.

Tóm tắt phần Hỏi & Đáp với chuyên gia phân tích

Ban lãnh đạo cho biết cả ba thương hiệu sẽ cải thiện trong suốt năm tài chính 2027, nhưng Quest được dự báo sẽ có sự chuyển biến mạnh mẽ nhất trong nửa cuối năm nhờ vị thế vững chắc hơn tại các hộ gia đình và được phân bổ đầu tư nhiều hơn.

Về chi tiêu tiếp thị, ban lãnh đạo cho biết hiệu quả đầu tư trước đây thấp hơn mức chuẩn của ngành hàng tiêu dùng đóng gói (CPG). Phân tích phối hợp tiếp thị (marketing mix) của công ty chỉ ra nội dung sáng tạo chưa tốt, chi tiêu quá mức gần điểm bán hàng và đầu tư chưa đủ vào truyền thông trực tuyến (streaming), mạng xã hội và người ảnh hưởng (influencers). Do đó, công ty đang tái đầu tư một phần lợi nhuận gộp phục hồi dự kiến thay vì tối đa hóa lợi nhuận trong ngắn hạn.

Về vấn đề giá cả, ban lãnh đạo cho biết việc tăng giá là cần thiết để bù đắp lạm phát, khôi phục biên lợi nhuận gộp về mức lịch sử gần 40% của công ty và tài trợ cho các hoạt động hỗ trợ thương hiệu. Độ co giãn của cầu vẫn là một trong những yếu tố không chắc chắn lớn nhất trong kế hoạch năm tài chính 2027.

Đối với OWYN, ban lãnh đạo mô tả sự suy yếu hiện tại là một đợt tái cơ cấu danh mục sản phẩm chứ không phải là sự mất niềm tin của các nhà bán lẻ vào giá trị cốt lõi. Các sản phẩm ngoài mảng cốt lõi kém hiệu quả đang bị loại bỏ, trong khi công ty tập trung nguồn lực phân phối và tiếp thị vào các sản phẩm thức uống pha sẵn và dạng bột cốt lõi.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Greetings, and welcome to the Simply Good Foods Company Fiscal Fourth Quarter 2026 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Matt Siler, VP, Investor Relations and Treasury. Thank you. You may begin.

Matthew Siler

Thank you, operator. Good morning, and welcome to the Simply Good Food's Fourth Quarter and Fiscal Year 2026 Earnings Call for the period ended August 29, 2026. I'm joined this morning by President and CEO, Joe Scalzo, and Chris Bealer, Chief Financial Officer.

A copy of our earnings release and accompanying presentation is available on the Investors section of the company's website at thesimplygoodfoodscompany.com. This call is being webcast, and an archive of today's remarks will be made available.

During today's call, management will make forward-looking statements, which are subject to various risks and uncertainties that may cause actual results to differ materially. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings.

On today's call, we will refer to certain non-GAAP financial measures that we believe provide useful information for investors. Due to the company's asset-light business model, we evaluate our performance on an adjusted basis as it relates to EBITDA and diluted EPS. Please refer to today's press release for a reconciliation of our non-GAAP financial measures to their most comparable measures prepared in accordance with GAAP.

Finally, all retail takeaway data included in our discussion today, unless otherwise noted, reflects a combination of [ Surcana's MULO+C ] measured retail channel data and company estimates for unmeasured channels for the 13 and 52 weeks ended August 29, 2026, as compared to the prior year.

I will now turn the call over to Joe Scalzo.

Joseph Scalzo

Thanks, Matt. Good morning, everyone, and thank you for joining us today. This morning, I will explain how the actions we took in fiscal '26 and have positioned Simply Good Foods to restore the economics of the business, rebuild consumers' connection with our brands and improved performance as fiscal '27 progresses.

I will then review our fourth quarter results and update you on the actions underway across our brands. Chris will then provide more detail on our financial performance and our fiscal year 2027 outlook before we open the call to your questions.

Before I summarize our quarterly financial results, let me step back and provide some perspective on our turnaround journey so far.

Fiscal '26 was a year of taking decisive action to reset the business. By the end of our second quarter, we finished a thorough assessment of our business and concluded that our performance was simply not where we needed it to be. As we have said previously, our brands were not performing to their potential, consumer fundamentals that weakened, our margins were under pressure and our financial results are falling short of our expectations.

We were candid with our employees, our Board and our shareholders. We made it clear that we were unhappy with the performance of the business and that a meaningful turnaround was necessary. Rather than making incremental changes we chose to act decisively. We reset our outlook, aligned the organization around a focus set of priorities, accelerated and implemented new projects to improve our cost structure, enhance our financial flexibility, and fundamentally overhauled the marketing approach across Quest, Atkins and OWYN.

While the financial commitments for the year, we established following our second quarter reset were modest, we delivered. At the same time, we completed much of the foundational work to improve the long-term trajectory of the business.

As we enter fiscal '27, we are a leaner, more focused and financially stronger company. Our priorities now are to restore the economics of the business, rebuild consumers' connection with our brands and create a healthier foundation for sustainable growth.

The actions we took in FY '26 are expected to materially improve the economics of our business through stronger gross margins, lower selling costs and G&A and improve cash generation. Rather than maximizing near-term earnings, we are deliberately reinvesting a meaningful portion of those improvements back into our brands.

Let me provide some perspective on how we arrived at that decision. During fiscal '26, we completed a comprehensive overhaul of our brand strategies and marketing plans. Our recently completed marketing mix analysis confirmed that our past 18-month brand-building investments generated returns well below industry benchmarks and our own expectations. That reinforced the need for meaningful change.

We redesigned our strategy and plans across all 3 brands and launched new marketing programs in September. I will speak to those in more detail in just a moment. These programs are grounded in a deep understanding of our consumers and designed to strengthen brand connection, improved marketing effectiveness and build consumer fundamentals over time.

Given our confidence in these changes, we decided to increase investment behind our brands in fiscal '27. We believe this investment will strengthen household penetration, deeper consumer engagement and improve brand relevance and in doing so, create greater long-term value for shareholders rather than maximizing near-term profit.

Based on this investment, we expect fiscal '27 net sales and adjusted EBITDA performance to improve as the year progresses, with the second half materially better than the first half. Please note that our first half performance will be challenging from a consumer demand viewpoint. For perspective, we're entering the year with weaker underlying consumer trends than we would like.

In addition, our planned pricing actions are expected to create a meaningful near-term volume headwind as we absorb consumer response from a close to a double-digit price increase. That said, these dynamics are well understood, embedded in our plan and do not change our conviction in the actions we're taking.

Margin and cost benefits we expect from our turnaround initiatives are embedded in our fiscal '27 plan. While it's still too early to assess the impact of our new commercial initiatives on top line performance, we see several encouraging early indicators that give us confidence we are on the right track in our turnaround.

First, we successfully executed price increases approaching double digits across much of our portfolio. While it remains early, and we are closely monitoring consumer response, we expect pricing elasticities to be well above 1, weighted more heavily to the first half of the year.

That said, the pricing action is expected to materially improve the economics of the business, moving gross margins closer to our historic level of 40% and providing the financial firepower to reinvest in our brands.

Second, we have validated the need for change through rigorous analysis and successfully launched new marketing programs across all 3 brands. The work is now in the marketplace and no longer in development. We are cautiously optimistic about the top line impact we believe these programs can have on our business.

Third, we have renewed our focus on grounding new product innovation and a deeper understanding of consumer needs. We are prioritizing fewer, bigger opportunities that translate those insights into more relevant products. While innovation takes time to develop and [ bring ] to the market, we are encouraged by the potential of the pipeline we expect to launch as we close fiscal '27 and move into fiscal '28.

Finally, we have simplified our operating model, strengthened organizational alignment and improved accountability across the business. The organization today has greater clarity around our priorities and greater focus on the actions we are taking to improve performance.

Evidence of this increased focus is our delivery against our financial commitments over the last 2 quarters. We expect these actions to translate into consistent priorities and high-quality execution.

Our focus is now delivering the financial improvements embedded in our plan and translating our commercial initiatives into stronger consumer fundamentals and improved top line performance. We expect performance to improve over the course of the year as our marketing investments take hold, the volume impact of pricing eases and year-over-year comparisons become more favorable.

Our objective for FY '27 is straightforward: Restore the economics of the business, rebuild consumer connections with our brands, improved brand fundamentals while exiting FY '27 with better momentum, stronger profitability and a healthier foundation for long-term growth.

With that context, let me turn to our fourth quarter FY '26 results. Our fourth quarter results were modestly ahead of our expectations, reflecting consistent execution against a difficult operating backdrop. Retail consumption remained pressured and our performance was well below our long-term expectations for this business.

Fourth quarter net sales declined 9.7% to $333.3 million. Gross margins were 34%, a decline of 30 basis points. And adjusted EBITDA declined 13.2% to $57.5 million. Total company retail consumption, which we believe is the best indicator of the overall health of our business, declined 8.4% in the fourth quarter compared with the prior year.

Before turning to our brands, let me emphasize a company-wide strategic priority. Since rejoining the company, I've become convinced that deepening our understanding of our target consumers, their needs and their motivations must guide decisions across every brand and function. That priority underpins the brand strategies I'll discuss next.

Turning first to Quest, our largest and most important brand. Quest's fourth quarter retail takeaway declined 2.1%. Our performance across the portfolio was mixed. [ Salty ] continues to perform well with consumption growth of approximately 13% in the quarter, helped by the launch of [ Dell Pickle ] original chips. This launch exceeded our expectations, bringing new consumers in the Quest and generating encouraging cross purchase across the portfolio, especially on [ bars ].

Our ability to identify new and interesting flavor trends continues to be a core strength for Quest, especially in our salty snack portfolio. Household penetration on the brand increased approximately 50 basis points to 20.2%, demonstrating the brand continues to recruit new consumers. The overall decline in retail takeaway was driven primarily by softness in bars, which were down approximately 6%, including an incremental club rotation and the performance of noncore innovation including baked snacks.

Within bars, performance was also affected by a lack of compelling innovation at a time with newer competitive offerings, we're generating consumer interest in the category. Our diagnosis is that Quest's near-term issue is less about relevance and more about buy rate, the effectiveness of support behind the core and an emission mix that was too broad and lacking consumer insight.

In fiscal '27, we are addressing that diagnosis directly by focusing the Quest portfolio on its core bars and [ salty ] businesses. which represent approximately 80% of the portfolio. We are concentrating resources behind those priorities and advancing fewer, bigger and more differentiated new product innovation.

At the center of that strategy is a clear understanding of our target consumer, a group we call [ Performance Maxes ]. These consumers see health and wellness as a path to becoming their best selves. They actively seek the best nutrition to fuel their progress and are unwilling to compromise on taste. For them, performance is about personal progress, not just athletic achievement.

Our new [ feeder athlete ] campaign brings that consumer mindset to life. The campaign began varying in September and is designed to sharpen the Quest brand message while creating a more consistent platform across bars and salty. Supported by influencer and social campaigns, it reinforces Quest's differentiated combination of athlete worthy nutrition and craveable taste, and puts more marketing weight behind the two businesses at the center of our growth priorities.

As an example of how this campaign comes to life and influencer marketing, consider our partnership with physician and creator, Dr. Mike, who brings our nutrition message to consumers as part of our broader expert-led campaign supporting our core bars.

Early testing indicates that this creative is materially stronger than our prior two campaigns, which gives us confidence in the direction of this new strategy. While it's too soon to draw conclusions for in-market performance, we will continuously optimize investment across media, influencer and social channels against household penetration, [ borate ] and core product velocities.

Turning to Atkins. Fourth quarter retail takeaway declined 22.6%, roughly in line with the last quarter and our own expectations. Household penetration was 8.3% and down approximately 210 basis points year-over-year. Declining household penetration and the resulting distribution losses continue to be the primary drivers of the brand's performance.

While we're clearly not satisfied with these results, our assessment is that Atkins challenges are not the result of a broken consumer proposition. Atkins remains a highly recognized brand in weight management with significant consumer awareness and equity built over decades.

Our diagnosis is straightforward. Over several years, Atkins did not receive the level of marketing support required to drive sufficient consumer recruitment. Our message became less consistent and moved away from the brand's core weight management proposition and our ability to attract new consumers weakened. As household penetration declined, velocity slowed and distribution losses followed.

Importantly, we believe the primary challenge is attracting new consumers to Atkins rather than the fundamental loss of relevance of the brand's weight management proposition. The brand continues to have a large and loyal consumer base that purchases Atkins products at consistently high rates.

In fact, buy rate has remained relatively stable over the past year despite the significant decline in household penetration. To us, that suggests the challenge is bringing new consumers into the franchise at an accelerated rate. We recognize that rebuilding household penetration will take time. However, improving consumer recruitment is exactly what our FY '27 plans are designed to address.

The emergence of GLP-1 therapies has reignited interest in weight loss, which is good news for the Atkins brand. As more consumers focus on weight management and metabolic health, we see a meaningful opportunity for Atkins among lapsed GLP-1 users.

People [ have ] stopped taking these medications and want to maintain their weight loss. Research estimates that approximately 23 million U.S. adults are lapsed users or are cycling on and off treatment. With decades of experience helping consumers manage their weight through nutrition, we believe Atkins is well positioned to serve this group.

That insight is reflected in our new campaign. [ Atkins is metabolism changing Nutrition ], which launched in September. The campaign features Rob Lowe as acting spokesperson, promises to help lapse GLP-1 users keep the weight off and speaks directly to the anxiety many consumers feel about maintaining weight loss success over time.

Atkins scientifically proven ability to change metabolism through a nutritional approach that provides consumers the right balance of cards protein and fiber is meaningful to this target.

To support that strategy, we have overhauled our consumer communications, redesign Atkins website to provide more science-based content and education and expanded investment across streaming, digital, social and influencers like Tori Spelling. In addition, we increased marketing support in the first half to improve household recruitment.

We are aligning innovation behind this opportunity. New products, including our [ with ] bars, are designed to better serve consumers focused on long-term weight management and healthy nutrition. Consumer response to this idea was overwhelmingly favorable in our research.

It is simply too early to draw conclusions from the new campaigns and market performance. We will measure its effectiveness over time through household recruitment, buy rate and core product velocities.

Separately, we're seeing some encouraging early signs in the Atkins bar business, including early evidence of key retailers that we are getting our core [ VAR ] assortment right. with a better balance of entry price points and value sizes that reward loyal consumers, alongside more consumer-relevant innovation such as our [ wood and filled ] bars.

These improvements will not immediately offset the distribution losses already embedded in the business, but they do provide some early evidence that we can improve the underlying fundamentals as we execute our fiscal '27 plans.

Our objective is straightforward, improve recruitment, stabilize household penetration and restore velocity in the core business. We believe our fiscal '27 plans give us a stronger foundation to improve those fundamentals over time.

Moving next to OWYN. As expected, fourth quarter retail takeaway declined 7% compared to a decline of 1.3% last quarter. Household penetration was 4%, down approximately 30 basis points year-over-year.

Importantly, our core ready-to-drink and powder chocolate and vanilla products outperformed the total brand, growing high single digits during the quarter. While overall brand performance was impacted by distribution pressures from noncore item velocities, we believe the performance of our core business reinforces the strength and relevance of the underlying consumer proposition. Our confidence in OWYN is based on that proposition and the specific consumer segment we are targeting.

Through our recent segmentation work, we have identified what we call passionate architects. Consumers are actively building a healthier lifestyle through deliberate choices around nutrition, ingredients and wellness. These consumers place a premium on clean label products, plant-based protein and allergy-friendly nutrition, and represent a sizable opportunity for the brand.

Our research indicates that approximately 18% of U.S. households actively seek functional benefits such as plant-based protein and clean label ingredients. That is a substantial addressable consumer group relative to OWYN's current household penetration.

Having said that, we expect distribution-driven losses on underperforming noncore items over the next 6 to 9 months, which is incorporated in the guidance we provided this morning.

Our go-forward focus is the core ready-to-drink and powder chocolate and vanilla products. We see opportunities to expand availability of core items and more stores with future distribution growth paced with household growth and supported by evidence of sustainable velocities. Marketing will be central to the OWYN growth plan.

Our new creative platform, every ingredient in earned its place was developed specifically for these passionate architects. These consumers care deeply about what goes into their products they consume and are looking for brands that share their commitment to transparency, quality ingredients and purposeful nutrition.

[ Fresh creative ] is now in market, reinforcing the brand's clean DNA. Refreshed TV spots, retailer website content and digital banner ads are live, complemented by an expanded streaming TV investment against our targeted consumer group. We have also reengaged influencers with a new tiered strategy, including increased paid social advertising.

Before I turn the call over to Chris, I'd like to leave you with why I remain confident in the future of Simply Good Foods despite our current performance challenges. I believe our category remains attractive and our brands remain relevant and our challenges are fixable.

First, we operate in an attractive category, supported by long-term consumer trends around health, wellness and convenient nutrition. These trends remain highly relevant and retailers continue to view purposeful nutrition as an important source of growth. In the food and beverage sectors, where any type of growth is at a premium, this category continues to outperform.

Second, we have built a company with strong capabilities in marketing, sales, R&D and managing an outsourced supply chain which we believe remain important competitive advantages that can support future growth and value creation.

Third, our [ line ] operating model remains a competitive advantage. It provides flexibility supports strong cash flow generation and allows us to direct resources towards the areas where we see the greatest opportunities to create value regardless of the consumer backdrop or economic environment.

Finally, we have a portfolio of strong brands that connect with distinct consumer segments, and we are confident that we can grow these brands long term.

Quest remains one of the leading brands in the category, catering to consumers who see health and wellness as a path to becoming their better cells. Atkins has a loyal consumer base and a long history in weight management, giving us a strong foundation to reach lapsed GLP-1 users looking to maintain their weight loss. OWYN gives us access to the growing plant-based and clean label protein segment.

While the turnaround will take time, our focus is clear. restore the economics of the business, rebuild consumer connection with our brands and improved performance as the year progresses.

Thank you for your time today. I'll now turn the call over to Chris to discuss our fourth quarter results and fiscal '27 outlook. Chris?

Christopher Bealer

Thanks, Joe. Good morning, everyone. As Joe noted, fourth quarter performance was modestly ahead of our plan. although the results remain below the level we expect from the business. Net sales were $333.3 million, a decline of 9.7% versus the prior year. primarily reflecting weaker consumption and velocity-related distribution pressure.

GAAP gross profit was $113.3 million compared with $126.6 million in the prior year. GAAP gross margin was [ 34.7% ], a decline of 30 basis points year-over-year. As expected, this was the strongest gross margin in the fiscal year and reflects the benefit of productivity actions despite ongoing inflation.

Adjusted EBITDA was $57.5 million, a decline of 13.2%. And adjusted EBITDA margin was 17.2% compared with 17.9% last year. Selling and marketing expenses were $32.4 million, unchanged versus the prior year.

G&A expenses of $30.6 million, which contains $1.9 million in restructuring costs, decreased 24.8% versus the prior-year period, which contained $8.7 million of integration expense. Net income was $30.5 million or 9.1% of net sales compared with a net loss of $12.4 million or negative 3.4% of net sales in the prior-year period.

Turning to our balance sheet and capital allocation priorities. At the end of fiscal '26, we had cash of $138.4 million versus $98.5 million at the end of fiscal '25. And Cash flow from operations for the year was about $181 million versus $178.5 million in the prior year despite the net sales declines, thanks to strong working capital management.

Moving to capital allocation, we reduced debt by approximately $50 million during the fourth quarter. Net debt to trailing 12-month adjusted EBITDA was approximately 0.9x at year-end, providing meaningful financial flexibility in a dynamic consumer environment.

In fiscal '26, we repurchased 11.7 million shares for roughly $213 million. As of October 26, 2026, approximately $141 million was left under our current share repurchase authorization. Our priority for capital remains investing in the operational needs and long-term growth of the business. This includes the innovation and marketing support needed to strengthen consumption across all 3 brands.

Looking ahead, we expect fiscal '27 capital expenditures of $15 million to $20 million. In addition, we expect the business to continue to provide strong cash flow conversion and we will balance investment in the business with the best use of excess cash, such as debt reduction and opportunistic share repurchases while preserving flexibility for long-term strategic opportunities.

Moving to our fiscal year 2027 outlook, we expect net sales to decline between 13% to 17%. The outlook reflects several factors: current consumption trends negative in-year volume impact from our recent price increase and distribution losses, including lower club rotational volume.

As we think about the cadence of fiscal we expect to see stronger top line performance in the second half of the year than the first half. Specifically, we expect the first quarter will be the weakest quarter from a top line perspective, but we expect improvement in the rate of net sales in the second half of the year compared to the first half.

This will be driven by a couple of factors: lessening volume impact of our September price increase, easier year-over-year comparisons and the incremental marketing investment, which we expect will drive improved consumption trends led by Quest.

We expect GAAP gross margin to improve by 250 to 300 basis points, driven by pricing, productivity initiatives and lower onetime costs. We expect gross margin performance in the second half to be stronger than in the first half of the year. We expect adjusted EBITDA to decline between 9% and 14%, which reflects our intention to increase our investment behind our brands. As Joe said earlier, we believe this will create greater long-term value for shareholders rather than maximizing near-term profit.

Finally, we expect adjusted EBITDA and adjusted EBITDA margin to be stronger in the second half of the year as a result of better gross margin performance and an improvement in net sales trends.

Our adjusted EBITDA guidance assumes selling and marketing expenses to increase by approximately 80 basis points. Within that is an increase in the marketing investment of approximately 90 basis points, offset by slightly lower selling expense. This moves our total marketing investment closer to our aspiration of 10% of net sales.

As it relates to G&A, recall that during our Q2 fiscal '26 earnings call, we discussed a major initiative to reduce fixed costs. We expect this initiative to generate approximately $8 million of annualized savings and employee costs. We recognized approximately 40% of these savings in fiscal '26 and expect to realize the remainder in fiscal '27. These savings are embedded within the guidance we have provided this morning.

We expect interest expense of approximately $18 million to $20 million and capital expenditures between $15 million to $20 million. As for the first quarter of 2027, we expect net sales to decline between 19% and 22%, driven by current sales momentum and the impact of our price increase.

As Joe noted earlier, we expect this will represent our most challenging quarter of the year. We expect Q1 2027 GAAP gross margins to increase by approximately 100 basis points. We expect Q1 2027 adjusted EBITDA to decline between 28% and 33% as we invest behind our new marketing programs.

Before we close, I would like to take a moment to address the most critical driver of Simply Good Foods, our people. Thank you for your incredible hard work, resilience and dedication throughout this past year.

With that, Joe and I will now take your questions.

Operator

[Operator Instructions] The first question is from Matt Smith from Stifel.

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Matthew Smith

I wanted to talk about your expectations for the top line. You outlined the full-year expectations improvement in the rate of decline in the second half. But if you could provide a little more color on your expectations by brand and if you believe the improvement in the second half pertains to each of the brands in the portfolio or if it's more focused on some of the individual brands?

Christopher Bealer

Thanks, Matt. Yes. We'll take that question. So as we said on the call, the first quarter is going to be the toughest quarter. And we're going to have a progressive improvement through the year. with the second half being much stronger than the first half. That improved strength is across all 3 brands. But I would say that the strongest improvement in the net sales.

The [ climb ] rate is going to be on Quest. It's going to have the strongest inflection, if you will, as we go into the second half of the year. And that's really reflecting the very strong investment that we're putting behind all 3 brands with new creative, new marketing campaigns that we launched in September. I'm really looking at Quest, like I said, is a place where we're really focusing some of that increased investment.

Joseph Scalzo

Yes. Matt, it's also helpful just perspective kind of macro on all 3 brands, right? We're carrying a little bit of negative momentum as we begin the year on each brand from a POS standpoint. Factor on top of that, we're taking close to a double-digit price increase on a large portion of that portfolio, which is now just hitting the marketplace. So you have that negative volume impact and is on -- just based on the elasticities. And so you get that double whammy that's early in the year.

And then we've change the marketing on all 3 brands, hit the marketplace in September. That takes time to kind of build from a communication standpoint and ability to influence consumers. So it just sets up for from a macro standpoint, all 3 brands having a tough first quarter, first half and starting to move in a positive direction as we move into the second half of the year.

So macro-wise, all 3 brands are affecting that. We're, from an investment standpoint, leaning in heavier on our most important brand Quest. We believe from a household standpoint, it's in a better position, and we think we can affect that brand from a turnaround standpoint quicker. So we're going to lean in more on Quest as the year moves forward. So I'd say all 3 brands have that curve. Quest probably has a sharper slope.

Matthew Smith

And a follow-up on the step-up in marketing. This is a business where we've seen marketing move higher. But historically, it's been more self-funded from a position of strength. So kind of what's changed in your view of the business to have the confidence in the new marketing to step that level of investment up preemptively this year as that marketing is going in front of the consumer today?

Joseph Scalzo

Yes. Let me first step back a little bit. Investing heavier in marketing hasn't been the profile over the last kind of, call it, 24 months. We've been reluctant to price to cover inflation. So we've seen gross margins move from where we historically have been, high 30s, approaching 40s, marketing as a percent of sales, close to 10%.

Those numbers have come down appreciably and has led to marketing reductions, which we believe have resulted in weaker consumer fundamentals, household penetration slowing or actually declining buy rates just from marketing pressure declining.

We -- fundamentally, we were moving in the wrong direction, right? So what we're doing now, taking pricing to get gross margins back and reinvesting in our brands is back to the future, right? We're actually going back to a profile that we used very successfully for over a decade to grow this business.

So the question that you asked with that as background is what confidence do I have? Well, judgment first. First judgment was our positioning on our brands lacked consumer insight, lacked an understanding of the brand and the consumer targets, and needed to get sharper. That would be the first observation.

It was my observation when landing in the second quarter and looking kind of what we've been doing. That caused us to exit our advertising agencies, bring new people in and really go do our homework on our consumer target, our brand positioning and our communication plan. That led to new creative on all 3 brands, which has hit the market in September.

One of the other things I did when I arrived was identified the fact that we hadn't done any marketing mix analysis. Marketing mix is mathematical tool that you can use to understand the returns, return on sales, return on gross margins of your investments.

So we placed that study. It takes a while to happen. So that was happening as we were changing the marketing. That -- the results of that started to trickle into our organization in July and August and kind of finished in early September. There were one big conclusion and three sub conclusions from that. all of which supported the changes that we had made.

At the highest level, the return we were experiencing for our marketing well below the midpoint of benchmarks for consumer packaged goods. So our returns weren't good. And they pointed to three drivers of lack of performance.

The first one was our creative wasn't particularly compelling, right? Reinforcing the insight that we had back in the second quarter, this needed to change.

The second insight where we were allocating our dollars produced a lower return. We were spending money much closer to the point of purchase, retailer online word search, banner ads and not enough money at the top of the funnel, streaming, social influencer. Meaning we weren't talking to consumers in the targets about the brand, creating brand awareness and consideration at the levels that we should be. So that was the second indication.

And the third and most important is we weren't spending enough money. So the returns are a function of marketing pressure. There was not enough marketing pressure. So that's why we're leaning in.

Judgment is that the creative, and we have some qualitative, quantitative on the creative on each brand -- on each 3 brands better than what we've experienced in the past and the fact that marketing pressure increase returns.

So knowing that the turnaround is going to require not only a better P&L but growing top line, we're leaning in to make investments on the brand to accelerate the top line turnaround in the business. And we believe that's a better return for shareholders than pocketing the gross margin improvement in EBITDA.

Operator

The next question is from Jon Anderson from William Blair.

Jon Andersen

Thanks for the question. I was hoping you could talk a little bit more about the price increase, the level and effective date and more important in your assumptions around elasticity and how those were kind of derived, that would be helpful. .

Joseph Scalzo

Yes. So good question, and I appreciate it. First, we understood that the path that we were on of trying to keep our pricing constant, right? So less consumer impact due to pricing and pulling back on marketing pressure, marketing investment, we understood that path was not working, right? It is producing the results we're experiencing in the marketplace right now.

I think all of you understand performance in the marketplace has a delay for decisions that were made. So we're living with trying to whole pricing, eat inflation, cut marketing support and hope our business performs off the shelf. Well, that hasn't been the case. So when we got to the reset back in the second quarter, we understood we needed gross margins. We needed to improve our bottom line performance, but equally important we need gross margins as fuel back into our brands.

So we took a look at the inflation that we were experiencing in the last fiscal year the inflation that we expect to see in this fiscal year, and that led us to a series of decisions around the level of pricing. And it is at approaching double digits, it's pretty significant. But it moves us back to a gross margin structure that we believe is necessary for us to have the fuel for back on our brands. So net pricing was necessary.

You can't eat inflation as a branded -- consumer goods packaged company. And we believe that the short-term impact of the pricing was worth the long-term impact of the gross margins, the ability it provides us to invest back in our brands and the decision that we've made in this fiscal year to invest.

So coming to your question of elasticities, it's 1 of the probably bigger unknowns or risks that we have going into our plan to really understand pricing elasticity the analytics of it is kind of by channel, you need to have price points to predict it accurately, you need to have price points that actually already exist, so you can model off of store-level data. While we're at price points we've never been at.

So we're using our best estimate of what we believe elasticities are. The price increases that we've taken over the last 24 months, although not substantial, had indicated we were somewhere in the range of 1.2x elasticity. This is the price increase that we just took, much more substantial than those on some of our brands. We're crossing key dollar thresholds.

So we expect the elasticities to be higher than what we've most recently expected. That's what we've built in, I think, appropriately conservative. And we've built a bigger impact in the first half of the year than the second half of the year. And as you can expect, as consumers purchase -- as they buy during the year, they can start getting used to the elevated pricing and you start seeing a little degradation of price elasticity over time.

So that's how we got to the decision. We've been, I think, appropriately conservative in estimating that embedded in our plan, but it's one of the factors that we're going to be closely monitoring as the first and second quarter play out.

Operator

The next question is from Jim Salera from Stephens Inc. .

James Salera

To ask about the bars and RTD shakes, kind of competitive position relative to other alternatives in the store, given this kind of elasticity at you mentioned your at price levels you haven't seen before. Obviously, we've seen a lot of macro headwinds across the consumer.

Can you just walk us through some of the conversations you're having with retailers and how that might impact end-cap placements and kind of more visible displays that in the past have brought people into the category?

Joseph Scalzo

Yes. Ask that again. I just want to make sure I understand the essence of the question. .

James Salera

Yes. Essentially, does the price points that we're at now limit your ability to have very visible in-store placements that previously brought people into the category. .

Joseph Scalzo

Well, yes, I think that's yet to play out. The context I would provide you, we're not alone in this inflationary pricing world. So there are already happening around us significant competitive pricing. And we're going to see elevated levels of base price and elevated levels of temporary price reduction from all competitors, right?

So I think it's, frankly, less about the price points and more about the compelling consumer propositions, right, that retailers allocate merchandising. Let me give you the best example.

Our most compelling brand product proposition is our [ Salt ] business. It's over $0.5 billion in retail sales, it's been growing double digit now for a number of years. Our recent innovation has resonated. We seem to continue to be able to attract households to it as well as drive buy rate. That's compelling to a retailer, right? They're going to want to merchandise that.

Now is it -- as that for a 4 pack of salty single-serve on Quest, as that price point dress over $10 at mass and over $11 at grocery, does that challenge consumer offtake? Well, we're about to better understand that. Is it driving retailers to want to display it? Yes. I have more confidence in my selling organization. in our ability to work retailers through that discussion, knowing the uniqueness of the proposition.

So I would say it's more about the brand proposition, the brand product proposition than it is the fact that we're taking pricing, right? And oh, by the way, everybody else has taken pricing, too.

James Salera

Got it. One follow-up question. Can you just give us some thoughts around OWYN in particular? I know when you guys bought this brand, obviously, it was very incremental in terms of the kind of the pace of growth relative to the portfolio. and as recent as you kind of work through some of the quality issues.

Do you find that there's hesitancy from retailers to bring that back into the fold? And I recognize the stepped-up marketing campaign hopefully helps with visibility. But can you just help us kind of maybe size up or have a sort of a glide path to earning a spot back on shelf for retailers that maybe tried it and then took it out during the quality issue period?

Joseph Scalzo

Yes. We -- I would say, first and foremost, no, we're not experiencing retailers believing that the brand does not have a compelling consumer proposition. So -- and the reason for that is there's a large consumer group seeking the benefits that OWYN offers, right?

So I think they see the reality for what it is. We got over assorted, got a little bit enthusiastic about our ability to innovate kind of outside the core and drive household penetration and buy rate by doing that. And frankly, that just wasn't the case.

So we're going to have a reset on OWYN. I think it's a short-term reset things that got launched over the last 12-plus months didn't perform, actually weren't particularly incremental. They're coming out of the assortment. Retailers saw that are acting on it.

We're obviously helping point out where that weakness is. But we're also, at the same time, pointing out, "Hey, the core business is pretty solid. It's growing high single digits. Let's get back to the core. Let's focus on recruiting households that are interested in kind of this space."

It's a substantial opportunity, right? We said it around 4% household penetration. We think that universe of passionate architects is somewhere around 3 to 4x that, let's recruit them with core items. And as we innovate, innovate close to the core. We're in the business of increasing household penetration, not necessarily driving a bunch of TDPs that don't break people to your brand.

So that's the reset that's happening. And we're pretty enthusiastic about the brand. We see this brand returning to growth. And we think retailers see it too.

Operator

The next question is from Rob Dickerson from U.S. Bancorp. .

Robert Dickerson

Great. I kind of like -- it's going to sound like a every basic question, but I just got to ask it. So Joe, obviously, you've heard everything you've already said, all makes logical sense. But as we think about '27, as we get through '27, clearly, it does take some time, right? It takes some time for influencers to get to the core and to kind of be more upstream.

Like how do you -- like -- or I guess I'll put it this way, very simplistically is like when do you hope to maybe have a better idea if it's working, right? And I'm kind of just talking broadly across all 3 brands, but more so, I guess, Quest.

And let's just say it's like it's not working as well as you would have hoped for whatever macro reason or maybe it's part of the marketing plan or what have you, do you kind of have like plans like [ BC and D ] in place to say, "Hey, if it's not working by this time, maybe we'll shift that way?"

And you're working with each of your individual influencers because kind of what I'm hearing a lot is innovate to the core, get more -- or focus more on that core consumer with the marketing strategy, which clearly you've done a lot of work on. But I'm not hearing like what the actual like new innovation will be or how we actually get that person to care more and maybe there need to be tweaks kind of along the way. So just trying to understand the timing a little bit more and kind of how you try to hedge it if maybe things don't work in so well.

Joseph Scalzo

Yes, Rob. Look, first, I think it's not as much about innovation, it is about understanding who your consumer target is understanding what your brand proposition is and market to it.

So let's talk about Quest because that's what you wanted to talk about is the best example. Quest, Quest core positioning around these performance [ Maxes ] had 2 pieces of it that are really important. The 1 is world-class nutrition and craveable taste. So you got to get back to on the brand, the core brand DNA. This is a brand that's about great nutrition, uncompromising nutrition and craveable taste. That's reflected in the new advertising that we -- and all the social digital that we're doing, back to the basics on the brand. So that's the first thing on Quest.

The second thing on Quest is we kind of fell in love with some noncore areas. We launched a milkshake product, which has done pretty well. We launched a bunch of baked items, not so well, right, get back to the core. It's a salty bar business, make sure a lion's share of your investment and in your innovation and your communication is back to those products into that brand promise. That's the core of our ability to recruit consumers to the brand. That's what's been missing in the marketing over the last, call it, 18 to 24 months. That started in September, right?

Innovation on our salty business, innovation has been pretty good, and we've continued to drive that business. I know the pipeline, I know what's coming. The innovation that's coming on our salty business is excellent. So I'm not concerned about our ability to keep momentum from a brand established momentum from a brand standpoint on Quest.

And continued momentum on our [ salt ] business. bars, I think, is a slightly different story. We've got a little bit of negative momentum. It's because we weren't focusing in on it. It's because our innovation wasn't as good as it needed to be. And so and it's because our positioning didn't reinforce nutrition and taste.

So all those things are happening as we speak, and an innovation pipeline of ours has become much more consumer insight oriented. And as we bring those things to the marketplace, I'll be happy to talk to you about those. My belief in Quest is we'll see a significant inflection point on the brand as we move through the second half of the year. as we move from third quarter to fourth quarter, I expected it to improve.

And as we get to the fourth quarter and move into early '28, we're going to be burning off a price increase, hopefully, with no further pricing, but that's yet remains to be seen. And then we will have lapsed a number of rotations that we're not repeating in club. So there's probably another few points, call it, 2 to 3 points of headwind that will burn off as we move into the first quarter of '28. I feel pretty good about our ability to get Quest moving in the right direction, second half better than first, first quarter, 28% better than fourth quarter.

Robert Dickerson

Great. And then just just another simple question. It is Rob Lowe. I know you mentioned Rob lowe, Rob's going back, Rob, kind of, quite frankly, at least in my day, it's kind of where the brand started and really did well with Rob. So just curious, any other incremental color as to what part he will be playing over the next 12 months at the company?

Joseph Scalzo

Yes. So Atkins was -- very clearly an issue on Atkins was how do we start recruiting again. So we got to where we are because we didn't price, we had gross margin erosion, we cut marketing sport, we stopped recruiting. I think secondarily for a while, we were kind of lost as to where the brand lives. .

So I initiated work back in January. Let's get this brand back on track. GLP-1s have changed the world of weight management, what's Atkins -- with Atkins role in that. We've come to what I think is a pretty compelling strategy. These GLP-1 users are using the medications to lose weight. So Atkins role in helping people lose weight has fundamentally changed because of GLP-1s.

That said, there are a lot of people cycling off these medications as they achieve their weight loss and they have a lot of anxiety about maintaining that weight loss. That's where Atkins is going to live.

And Rob Lowe has incredible, incredible credibility with these people. So we brought him back quite simply because people trust him, believe him and see him as an expert in nutrition. So we're going to target those people, and we're going to see over the next 4 or 5 months with this positioning the creative, the website, social digital influencer, whether we can get Atkins back in the people recruiting business. I like the insight. I like the positioning and I love Rob Lowe.So we got our fingers crossed, and we're quietly confident that this is going to work.

Operator

The next question is from Alexia Howard from Bernstein.

Alexia Howard

Can I ask about the ingredient list? You talked about the importance of clean label, particularly to the -- on consumers. But if you think about the core propositions and the ingredient list on Atkins and Quest as well, is there any [ brief ] formulation or renovation of the ingredient list that you're working through as well to make sure that those performance [ MAXes ] are given exactly what nutrition -- the nutrition criteria that they're looking for?

Joseph Scalzo

Yes, let me point out the -- I think the strength of our portfolio is we have 3 brands against unique consumer targets who want, frankly, different things. So the OWYN passionate architects, they're all about ingredients, they're all about wellness, they're all about ingredients. I know what they are, less of them, every ingredient earns its place. And that brand is well positioned from a label standpoint, from a trust standpoint to target those people. .

[ MAXes ] are in a completely different place. [ MAXes ] are looking for the -- in the choices they make in food to be their very best cells, right? And that's both kind of athletically and in life. They don't flip a label over to see that it's -- there's 6 ingredients and they understand each one. That's not what they're about. They're about getting the best nutrition they can get in a product.

And in this case, it's the highest level of protein, most effective level of protein, low carbs, decent amount of fiber, right, to fuel their lives day to day, right? So very different groups. So I wouldn't take the passion and architect mindset and then take those ideas and put it on at [ Performance Max]. They're very, very different people looking for fundamentally different things in products. And it's the strength of our portfolio. We have different brands that appeal to different consumer targets, looking for different things.

Did that answer your question, Alexia?

Alexia Howard

Yes. I think so. I guess I'm just thinking about people worrying a bit more, but I hear your point. .

Operator

There are no further questions at this time. I would like to turn the floor back over to Joe Scalzo for closing comments. .

Joseph Scalzo

Yes. Thank you very much for your interest in our business. We look forward to talking to you in the next quarter. Have a good day. .

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.