By Kelly Cloonan

Shares of Simply Good Foods rose after management said its cost-cutting plan is starting to bear fruit.

The stock gained 9.7%, to $21.25, midday Thursday. Shares have slipped 41% in the past 12 months.

Chief Executive Geoff Tanner said Thursday that the company is charging ahead with initiatives to drive its top line and rebuild its gross margin, including with its existing productivity plan.

The plan has started to bear fruit as it cuts down costs, and those gains will become more visible in the second half of the year once inflation comes down, Tanner said during a call with analysts.

Going forward, the Denver company expects its gross-margin declines to improve sequentially, helped by pricing changes and its productivity plan, offsetting headwinds from historically high cocoa prices.

William Blair analysts said the updates were constructive, noting they "believe it's simply time to get involved" in the stock.

The company's reaffirmed 2026 guidance also looks attainable, given demand for the company's Quest and OWYN brands and potentially conservative planning assumptions for its Atkins business, the analysts said.

"Our sense is the 2026 guidance remains quite achievable," they said.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

January 08, 2026 14:21 ET (19:21 GMT)

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