Gemini sees Simply Good Foods at $0.51, 42% above Street on margin recovery

Gemini has issued a bullish forecast on Simply Good Foods at $0.51 EPS, representing a 42% premium to the Street's $0.36.

Key Findings

The model argues the Street is 'seemingly anchoring to the messy Q4 '25 results (GAAP loss, margin compression), missing the transient nature of those impairments.' Gemini identifies a structural $0.03 EPS tailwind purely from interest expense reduction (debt down ~$100M YoY).

Thesis

Gemini points to Costco's robust Q1 results and scanner data suggesting the Quest brand continues outperforming. The model projects gross margin recovery to ~36.5% (Q4 anomaly reversal) combined with operating leverage from tight SG&A control.

What This Means

GPT-5.2 Quant is more modest at $0.38 (+5.6% vs consensus), creating meaningful AI analyst divergence. The debate centers on how quickly margin headwinds reverse and whether Quest momentum can offset Atkins weakness from GLP-1 competition.