A securities law firm has launched an investigation into The Simply Good Foods Company for potential securities fraud after the stock plunged 18.1% on April 9.
Bleichmar Fonti & Auld LLP is investigating whether Simply Good Foods made false and misleading statements to investors regarding its expansion of Quest and OWYN-branded protein products, the firm said in a May 25 announcement.
The company’s stock fell to $11.80 on April 9 after it reported fiscal second-quarter net sales of $326 million, a 9.4 percent decline year-over-year. Simply Good Foods also cut its 2026 guidance to a range of a 10 percent to 7 percent decline and revealed a $249 million impairment charge.
The investigation adds legal and reputational risk for a company already battling operational setbacks. For its fiscal third quarter, Simply Good Foods is guiding to a net sales decline of 14% to 11% year-over-year, putting more pressure on its recovery efforts.
During the company’s April 9 earnings call, CEO Joe Scalzo attributed the poor performance of the OWYN brand expansion to “a combination of a product quality issue . . . that impacted taste, texture and consumer acceptance and poor marketing execution.”
The disappointing results prompted a reset at the company. On April 21, Simply Good Foods announced a cost-cutting plan it expects will generate about $17 million in annual savings and affect around 15% of planned jobs. The move followed what Scalzo called a “clear-eyed assessment” of the business.
Simply Good Foods, which also owns the Atkins brand, has continued to launch new products, including Dill Pickle flavored protein chips under its Quest brand last week. The active-nutrition category remains crowded, with competitor BellRing Brands, owner of Premier Protein, also recently lowering its fiscal 2026 sales target, citing promotional pressures.
The fraud investigation puts the stock's recent stabilization at risk after shares closed at $11.86 on May 22. The company's next major catalyst will be its fiscal third-quarter earnings, which will test investor confidence in the new operational plan.
This article is for informational purposes only and does not constitute investment advice.
