By Megan Graham

America's protein craze ought to mean boom times for Simply Good Foods, which sells protein bars, drinks, chips and more under well-known brands like Quest and Atkins. Instead the company is looking for a turnaround.

Net sales fell 9.4% in the quarter ended Feb. 28, driven by a 27% decline for Atkins and 17% for Owyn, a plant-based protein brand, Simply Good said last week. Quest sales grew 0.3%.

The company now expects net sales to decline 7% to 10% in the current fiscal year, replacing a prior guidance range of minus 2% to plus 2%.

"We are not pleased with our performance. We've experienced execution challenges against the dynamic and highly competitive marketplace," President and Chief Executive Joe Scalzo, a former CEO of the company who was brought back in January to reinvigorate growth, said on an investor call. He said the company's turnaround plan will involve more consistent investment behind its brands along with relying less on promotions, fixing supply-chain inefficiencies and lowering its overhead structures.

Despite playing in a trendy, fast-growing consumer category, Simply Good has made strategic choices that weakened its performance and limited its ability to capitalize on the opportunity at hand, according to Scalzo. The company didn't position its Quest brand, for example, to successfully compete in a super-competitive protein bar category, he said.

"We have a belief that our brand has the best nutritionals in the category," Scalzo said on the call. "It was characterized by athlete-worthy nutrition...So, these are products that athletes would use. They're that good. And you don't have to compromise with taste. You will see us go back to that positioning, which I believe is harder-hitting than where we've been before."

Demand for bars containing 15 or more grams of protein, like many Quest and Atkins bars do, is a "megatrend" that saw sales climb 21% year-over-year in the four weeks through March 22, according to Michael Gunther, senior vice president of research and market intelligence at research firm Consumer Edge. But that growth is primarily fueled by new entrants like David Protein, which draws attention with its viral marketing; Built Brands, which sells marshmallowlike bars; and Barebells, which come in flavors such as orange Creamsicle and lemon cheesecake.

Quest's U.S. market share among high-protein bars shrank to 14% in the four weeks ended March 22 from 20% a year earlier, according to Consumer Edge, while Atkins's share declined to 3% from 5%. Barebells now leads the market among bars with more than 15 grams of protein, growing its share to 22% in the four weeks through March 22 from 15% one year before, with Quest at No. 2.

Brands like Built and Barebells are continually innovating, Gunther said. "They're coming up with new flavors, limited-time offers, so it keeps people interested...It seems like this is a category where it's easy for a consumer to switch. So those companies that have constantly come up with new stuff to get attention have done well."

Simply Good Foods said Atkins in particular could capture growth given the increasing use of GLP-1s among consumers. Scalzo said the company is considering ways to position the brand to better do that.

"While these therapies are changing how some consumers approach eating, they are also reinforcing the importance of nutrient-dense foods, particularly those high in protein and lower in carbs and sugar," Scalzo said. "As consumers focus on maintaining muscle mass and overall nutrition balance in a lower calorie environment, we believe these trends remain highly consistent with the nutritional principles that underpin our brands."

Write to Megan Graham at megan.graham@wsj.com

(END) Dow Jones Newswires

April 17, 2026 12:43 ET (16:43 GMT)

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