What The Simply Good Foods Company told the SEC could break it.

Simply Good Foods' nutrition-snack products (Atkins, Quest, OWYN bars/shakes) depend on commodity ingredients — cocoa and other coatings, dairy, proteins, soy, nuts and peanuts. These inputs drove unfavorable commodity expenses that, with OWYN mix, cut FY2025 gross margin to 36.2% from 38.4% (a ~220 basis-point decline), and the company expects higher costs of certain core ingredients and supplies during fiscal 2026. Cocoa and whey/dairy protein in particular have seen sharp price volatility. As an asset-light manufacturer that prices through at-will retail contracts with no minimums, it has limited ability to instantly pass through input-cost spikes. A genuine, already-materialized commodity-input dependence.

“The principal ingredients to manufacture our products include cocoa and other coatings, dairy, proteins, soy, nuts”

Simply Good Foods flags U.S. trade policy as a direct cost risk: it states the U.S. announced tariffs on imports from a broad range of countries — including the European Union, Canada, Mexico and China — which it anticipates will cause inflationary pressures and higher costs on certain of its ingredients and packaging, and imports from affected countries, during fiscal 2026. It also ships a large number of products between the U.S. and Canada, exposing it to changes in customs duties/tariffs on cross-border flows. Layered on top of the commodity-input inflation, the tariff channel adds to FY2026 cost pressure. A specific, forward-looking trade-policy exposure central to the supply-shock thesis.

“the United States announced tariffs on imports from a broad range of countries, including the European Union, Canada, Mexico, and China, which we anticipate will cause inflationary pressures and higher costs on certain of our ingredients and packaging”