Simply Good Foods shares fell 18% after the company disclosed product-quality issues with its OWYN protein products and cut its full-year guidance, prompting a securities fraud investigation by Bleichmar Fonti & Auld LLP.
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Simply Good Foods drops 18% as BFA probes securities fraud claims
Simply Good Foods Co. shares plunged 18% after the protein-bar maker disclosed product-quality issues tied to its OWYN expansion.
"The significant expansion of OWYN products experienced a combination of a product quality issue that impacted taste, texture and consumer acceptance and poor marketing execution," Chief Executive Officer Geoff Tanner said on the April 9 earnings call.
The company reported fiscal second-quarter net sales of $326 million, a 9.4% decline from a year earlier, and cut its full-year 2026 guidance to a range of negative 10% to negative 7%. Simply Good Foods also recorded a $249 million impairment charge, which it attributed largely to the challenging fiscal year and reduced revenue projections.
Bleichmar Fonti & Auld LLP announced it is investigating whether Simply Good Foods made false or misleading statements about the success of its initiative to expand distribution of Quest and OWYN protein products. The law firm, which recovered over $900 million from Tesla Inc.'s board and $420 million from Teva Pharmaceutical Industries Ltd., is seeking investors who lost money on the stock.
The stock fell $2.61 to close at $11.80 on April 9, down from $14.41 the prior session. The 18% decline followed the company's disclosure that a product quality issue with OWYN — a plant-based protein brand it acquired in 2023 — hurt consumer acceptance during a critical expansion window.
The investigation adds legal risk for shareholders of the consumer packaged food company. Investors may seek to be appointed lead plaintiff in any class action, with the deadline to be set by the court. Simply Good Foods' next quarterly report will be closely watched for signs of a recovery in OWYN sales and distribution execution.
This article is for informational purposes only and does not constitute investment advice.
[1] $SMPL Investor Loss Alert: Simply Good Foods Investors may have been Misled after Expansion Issues Lead to 18% Stock Drop – Contact BFA Law if You Lost Money[2] $SMPL Investor Loss Alert: Simply Good Foods Investors may - GlobeNewswire[3] Simply Good Foods stock drops 18% after product expansion issues trigger securities fraud probe - Pluang[4] $PODD Investor Loss Alert: Insulet Investors may have been - GlobeNewswire
