Simply Good Foods

None of the serious warning signs we check for were found. 1 thing worth knowing.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 28 Oct 2025, plus the 10-Q filed 9 Jul 2026 and 7 later 8-Ks.

• One big customer

  Worth knowing

  One customer brings in a big share of sales: 31% last year. Losing that customer would hurt.

  “Sales to our largest retailer, Walmart Inc., represented approximately 31% of consolidated sales in fiscal year 2025, with approximately 24% through their mass retail channel and approximately 7% through their Sam’s Club and e-commerce channels.”

  From the 10-K filed 28 October 2025, Item 1. Business. Read it in the filing

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• We may be required to recognize impairment charges that could materially affect our financial results.

  We assess our noncurrent assets, including trademarks, goodwill and other intangible assets, and other long-lived assets, as and when required by accounting principles generally accepted in the United States to determine whether they are impaired and, if they are, we record appropriate impairment charges. We have recorded, and we may be required to record in the future, significant impairment charges and, if we do so, our net income could be materially adversely affected. Refer to Note 5, Goodwill and Intangibles, for additional information regarding the Company’s impairment assessments and related impairment charges recorded during fiscal year 2025.

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• Ingredient and packaging costs are volatile and may rise significantly for a variety of reasons, many of which are outside our control, which may negatively affect the profitability of our business.

  Could happen

  United States trade policies, including tariffs, and potential related actions by other countries are all outside of our control and may affect our financial condition or results of operations. Recently, the United States announced tariffs on imports from a broad range of countries, including the European Union, Canada, Mexico, and China, which we anticipate will cause inflationary pressures and higher costs on certain of our ingredients and packaging and imports from the affected countries during fiscal year 2026. If maintained, the announced tariffs, as well as related measures that could be taken by other countries and the potential escalation of trade disputes, are expected to affect our business and results of operations. The extent and duration of the tariffs and the resulting effect on general economic conditions and on our business as a result of increases in prices for ingredients and packaging we import or our suppliers and vendors purchase to produce these items that we acquire through our supply chain are uncertain and depend on various factors, such as negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products.

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• Changing consumer preferences, habits, perceptions of certain nutritional snacking products and discretionary spending may negatively affect our brand loyalty, purchase frequency rate and net sales, and materially and adversely affect our business, financial condition and results of operations.

  Could happen

  Conflicting scientific information on what constitutes good nutrition, or the benefits of certain dietary approaches may also materially and adversely affect our business. Adverse public opinion, third-party studies, or other allegations, whether or not valid, regarding the perceived or potential negative health effects of processing of ingredients in our products, such as concerns about the use of nutritive and non-nutritive sweeteners, seed oils, or other substances such as PFAS (per- and polyfluoroalkyl substances) chemicals in our ingredients or materials, may contribute to actual or threatened legal action against us, negative consumer perception of our products, new or increased taxes on our products, or additional government regulation, any of which may be costly and reduce their appeal. Such risks may be increased if government officials make public statements about alleged risks purportedly associated with processing, particular ingredients used in our products, or unintentional contaminants that may be present in nature and are possibly measurable in trace amounts in our ingredients.

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• Climate Change, or legal, regulatory or market measures to address climate change, may negatively affect our business and operations.

  Could happen

  There is growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. If such climate change has a negative effect on agricultural productivity, we may be subject to decreased availability or less favorable pricing for certain commodities that are necessary for our products, such as whey, cocoa and palm or other plant-based oils. Adverse weather conditions and natural disasters can reduce crop size and crop quality, which in turn could reduce our supplies of raw materials, lower recoveries of usable raw materials, increase the prices of our raw materials, or disrupt production schedules. The physical effects and transitional costs of climate change and the legal, regulatory or market initiatives to address climate change could have a negative effect on our business, financial condition, and results of operations.

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