The Simply Good Foods Company (Nasdaq: SMPL) is a developer, marketer, and seller of branded nutritional foods and snacking products, primarily known for its Quest, Atkins, and OWYN brands. The company focuses on the rapidly growing Nutritional Snacking category, which includes protein bars, ready-to-drink (RTD) beverages, and other snacks.

For the third quarter of fiscal year 2025, Simply Good Foods reported a rise in its performance, with net sales reaching $381 million, an increase of 13.8% compared to the previous year. This growth was primarily driven by a contribution of $33.6 million from the OWYN brand, which represented 10% of total net sales growth, combined with 3.8% organic growth led by the Quest brand, which experienced net sales growth of 15%.

Gross profit for the quarter increased by 3.7% to $138.5 million, although gross margin declined to 36.4%, a decrease of 350 basis points year-over-year, largely due to inflationary pressures on input costs and the impact of incorporating OWYN into the financials.

Adjusted EBITDA for the third quarter was $73.9 million, up 2.8% from the previous year. Despite a slight downturn in net income, which stood at $41.1 million compared to $41.3 million from the same period last year, adjusted diluted EPS rose to $0.51 from $0.50.

For the fiscal year to date, net sales totaled $1,081.9 million, representing a year-over-year increase of 13.2%. OWYN accounted for $99.6 million of this total growth, and organic growth was reported at 2.8%. The company projects full-year net sales growth of 8.5% to 9.5% and adjusted EBITDA growth of 4% to 5% for fiscal year 2025.

As of May 31, 2025, the company’s balance sheet included cash of $98 million and an outstanding debt of $250 million, resulting in a net debt to trailing adjusted EBITDA ratio of approximately 0.5x. Capital expenditures during the quarter were around $3 million, while cash flow from operations was $133 million, down from $167 million in the previous year due to higher working capital needs.

Looking ahead, Simply Good Foods has updated its guidance for the fourth quarter, anticipating organic net sales growth to be around 3%. The company’s management highlighted ongoing efforts to mitigate the impact of inflation and tariffs, with expectations that gross margins may decline by approximately 200 basis points for the full year.