Simply Good Foods upgraded on Quest brand momentum

What happened: Simply Good Foods (SMPL), owner of Quest and Atkins brands, saw its stock plunge over 18% on October 23, 2025, after missing revenue estimates and cutting full-year guidance. The company's Q2 results showed net sales down 9.4% year-over-year (YoY) to $326 million, and adjusted EBITDA down 18.4% YoY to $55.5 million. A $249 million non-cash impairment drove a GAAP operating loss of $213.3 million and a net loss of $159.7 million. The struggles were attributed to brand weakness and product issues, particularly with the Quest brand.

Market impact: The high-protein food sector faces headwinds, with Atkins, OWYN, and Quest brands struggling to capitalize on the trend. SMPL's stock drop may reprice the company's valuation, currently at 6.5X forward earnings, as investors reassess its growth prospects. Competitors and other packaged food companies may benefit from SMPL's struggles, as consumers seek alternative high-protein options.

What to watch next: SMPL's next earnings release, scheduled for early February 2026, will provide crucial updates on the company's turnaround efforts and guidance for the full year. Additionally, investors should monitor the performance of SMPL's competitors and the broader high-protein food market to gauge consumer preferences and market trends.