[8-K] The Simply Good Foods Company Reports Material Event

Rhea-AI Filing Summary

Helen of Troy Limited (NASDAQ: HELE) reported sharply weaker first-quarter FY 2026 results (three months ended 31 May 2025), driven by a broad-based, non-cash impairment review. Sales fell 10.8% year-over-year to $371.7 million as soft consumer demand and lower retailer orders affected both Home & Outdoor and Beauty & Wellness. Gross profit declined 13.8% to $175.0 million and gross margin contracted ≈160 bp to 47.1%, reflecting lower volume and mix.

Massive intangible and goodwill impairments totaling $414.4 million ($316.9 million goodwill; $97.5 million intangible assets) were recorded following a triggering event that included a sustained share-price decline and lower long-term growth forecasts. Charges hit multiple reporting units: Hydro Flask ($98.3m), Osprey ($120.8m), Drybar ($103.7m), Curlsmith ($36.2m), Health & Wellness ($35.8m) and Revlon licenses ($19.6m). After these charges, the company posted an operating loss of $407.0 million and a net loss of $450.7 million (-$19.65 diluted EPS) versus prior-year net income of $6.2 million.

Cash flow and liquidity were resilient despite the loss. Operating cash flow improved to $58.3 million (vs $25.3 million) on lower receivables and tax timing. Net debt fell as long-term debt declined to $871.0 million (from $916.9 million) and cash rose to $22.7 million. The company added a $250 million delayed-draw term loan (hedged with swaps) and now has $605.1 million of revolver capacity plus $498.6 million remaining under its $500 million share-repurchase authorization.

Olive & June integration: Management finalized working-capital adjustments that reduced purchase price and goodwill by $3.9 million; the beauty brand adds $51 million in trade names and targets up to $15 million in performance-based earn-outs. Contingent consideration is currently valued at $4.1 million.

Balance sheet impact: Goodwill fell to $861.8 million (-27%) and intangible assets to $466.2 million (-18%). The equity base shrank to $1.228 billion (from $1.683 billion). Leverage covenant headroom remains adequate: the maximum Net Leverage Ratio is temporarily 4.5× through Nov-25; pro-forma availability is $346.7 million.

Outlook signals remain cautious—management lowered internal sales, margin and terminal growth assumptions reflecting tariffs and macro uncertainty. No restructuring charges were booked as Project Pegasus is complete, but $4.8 million of related liabilities remain.

• Net sales: $371.7m (-10.8%)
• Gross margin: 47.1% (-160 bp)
• Net loss: $450.7m vs +$6.2m
• Operating cash flow: +$58.3m vs +$25.3m
• Long-term debt: $871.0m; weighted avg. rate 5.8%
• S/O shares: 22.96 m; repurchase capacity $498.6m

Key investor takeaway: Core operations remain profitable before non-cash charges, but the scale of impairments highlights softer demand expectations and pressures on several flagship brands. Management stabilized liquidity and continues portfolio expansion (Olive & June), yet visibility on revenue recovery is limited.

Positive

• Operating cash flow rose to $58.3 million, more than double the prior-year period, supporting liquidity.
• Long-term debt declined by $45.9 million and $605.1 million of revolver capacity remains available.
• Interest-rate exposure is hedged on $750 million of borrowings, limiting future rate shocks.
• Olive & June acquisition broadens the Beauty & Wellness portfolio and includes contingent consideration aligned with performance.
• Share-repurchase authorization of $498.6 million offers capital-allocation flexibility.

Negative

• $414.4 million impairment charges led to a net loss of $450.7 million (-$19.65 EPS).
• Revenue declined 10.8% year-over-year with gross margin compression.
• Goodwill and intangible write-offs across multiple brands signal weaker long-term growth expectations.
• Equity base fell 27%, reducing balance-sheet cushion.
• Income tax expense jumped to $30.2 million despite the loss, pressuring cash requirements.
• Inventory increased to $484.1 million, raising potential working-capital risk if demand remains soft.

Insights

Equity Research Analyst

TL;DR – Huge $414 m impairments swing HELE to deep loss; sales down 11%; cash flow solid but outlook reset.

The quarter is dominated by the strategic impairment review that wiped 24% of equity and cut goodwill/intangibles by 19%. While non-cash, it confirms materially lower long-term cash-flow expectations for Hydro Flask, Osprey, Drybar and others. Top-line contraction of 10.8% and 160 bp gross-margin erosion show continued consumer softness. On the positive side, operating cash flow doubled and management trimmed net debt by $46 million, aided by working-capital releases. Liquidity is ample with $605 million revolver capacity and covenant leverage of roughly 3.3× (well under the 4.5× temporary ceiling). The Olive & June deal adds category breadth but integrates amid a tougher beauty cycle. Valuation will likely compress until revenue stabilizes; the perpetual write-offs raise questions about prior acquisition discipline.

Credit Analyst

TL;DR – Leverage manageable despite loss; strong cash generation offsets impairment-driven equity hit.

The $450 million GAAP loss has limited cash impact; debt service coverage actually improved given $58 million of operating cash inflow. Interest is well covered (OFCF/interest ≈4.2×). Covenants allow >$340 million additional borrowing, and swaps fix rates on $750 million, reducing exposure to rising SOFR. The delayed-draw term loan pushes debt maturities to 2029, enhancing runway. However, tangible net worth is sharply lower, and further demand weakness could pressure covenant EBITDA calculations. Rating outlook remains stable but with a negative bias pending sales trajectory.

0001702744false00017027442025-07-102025-07-10

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________________

FORM 8-K

_______________________________________________________

Current Report

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 10, 2025

_______________________________________________________

The Simply Good Foods Company

(Exact name of registrant as specified in its charter)

_______________________________________________________

Delaware

001-38115

82-1038121

(State or other jurisdiction of  incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification Number)

1225 17th Street, Suite 1000

Denver, CO 80202

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (303) 633-2840

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SMPL

Nasdaq

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02     Results of Operations and Financial Condition.

    On July 10, 2025, The Simply Good Foods Company, a Delaware corporation (the “Company”), reported its results for the fiscal third quarter ended May 31, 2025. The results are discussed in detail in the press release attached hereto as Exhibit 99.1. In addition, the Company has posted an investor presentation at www.thesimplygoodfoodscompany.com.

    The information in this item, including Exhibit 99.1, is being furnished, not filed. Accordingly, the information in this item will not be incorporated by reference into any registration statement unless specifically identified therein as being incorporated by reference therein.

    Certain statements made in Exhibit 99.1 are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as “will”, “expect”, “intends” or other similar words, phrases or expressions. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We caution you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These risks and uncertainties relate to, among other things, our ability to achieve our estimates of OWYN’s net sales and Adjusted EBITDA and our anticipated synergies from the acquisition of OWYN, our net leverage ratio post-acquisition, our Adjusted EPS post-acquisition, our ability to maintain OWYN personnel and effectively integrate OWYN, our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints and inflationary pressure on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical conditions affecting us and the industry in which we operate, our ability to maintain adequate product inventory levels to timely supply customer orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably, the loss of one or more members of our management team, potential for increased costs and harm to our business resulting from unauthorized access of the information technology systems we use in our business, expansion of our wellness platform and other risks and uncertainties indicated in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.

Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit No.						Description
99.1						Press Release dated July 10, 2025
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:			July 10, 2025			By:			/s/ Christopher J. Bealer
						Name:			Christopher J. Bealer
						Title:			Chief Financial Officer
									(Principal Financial Officer)

FAQ

How did Helen of Troy (HELE) perform in Q1 FY2026?

The company reported sales of $371.7 m (-10.8%) and a net loss of $450.7 m due mainly to $414 m of impairment charges.

What caused the $450 million net loss for HELE?

A non-cash review triggered $414.4 m in goodwill and intangible impairments across several brands, turning operating income negative.

Did Helen of Troy generate cash in the quarter?

Yes. Operating cash flow was $58.3 m, up from $25.3 m last year, helped by lower receivables and tax timing.

How much debt does HELE have after Q1 FY2026?

Long-term debt stands at $871.0 m; the company has $605.1 m of unused revolver capacity and a weighted-average rate of 5.8%.

What is the status of the Olive & June acquisition?

The deal closed 16 Dec 2024. Purchase price net of adjustments is $224.7 m plus up to $15 m earn-outs; goodwill was reduced by $3.9 m this quarter.

How large is Helen of Troy’s share-repurchase authorization?

As of 31 May 2025, $498.6 million remains available under a three-year, $500 million program approved in Aug 2024.

What covenant headroom does HELE have?

Pro-forma borrowing capacity under the Net Leverage Ratio is $346.7 m, with a temporary ceiling of 4.5× through Nov 2025.