Simply Good Foods investigated for securities fraud after 18% stock drop

Tom Brennan

·Jun 03 2026, 10:43

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Key Takeaways:

Bleichmar Fonti & Auld is investigating Simply Good Foods for potential securities fraud
SMPL stock fell 18% after Q2 sales dropped 9.4% and guidance was cut
The company disclosed product quality issues with its OWYN protein line

Bleichmar Fonti & Auld LLP is investigating Simply Good Foods for securities fraud after its stock plunged 18% on weak earnings and a product quality failure.

"The company's significant expansion of OWYN products experienced a combination of a product quality issue that impacted taste, texture and consumer acceptance and poor marketing execution," the CEO said on the April 9 earnings call, according to a statement from the law firm.

Simply Good Foods reported fiscal second-quarter net sales of $326 million, a 9.4% decline year-over-year, and cut its 2026 guidance to a range of negative 10% to negative 7% year-over-year. The company also recorded a $249 million impairment charge, which it attributed largely to the challenging fiscal year and updated revenue projections. The stock fell $2.61 a share, or more than 18%, to close at $11.80 on April 9.

The law firm is investigating whether Simply Good Foods made false and misleading statements about the success of its initiative to expand distribution of Quest and OWYN-branded protein products. The company's products include protein bars and ready-to-drink shakes sold under those brand names.

The investigation puts additional pressure on a stock already trading near its lowest level since the April selloff. Investors will watch for any restatement of prior financial results or further disclosure about the scope of the product quality issues, which could determine whether the case proceeds to a formal class action.