BRBR - Earnings call transcript Q2 2021

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Operator

Welcome to BellRing Brands Second Quarter 2021 Earnings Conference Call and Webcast. Hosting the call today from BellRing Brands are Darcy Davenport, President and Chief Executive Officer and Paul Rode, Chief Financial Officer. Today’s call is being recorded and will be available for replay beginning at 1:30 p.m. Eastern Time. The dial-in number is 800-585-8367 and the passcode is 5885539. now Meyer, to Brands Investor is over the for It Jennifer to Relations Instructions] my turn pleasure floor introductions. [Operator of BellRing

begin. may You

Jennifer Meyer

these Good session. remarks Rode, afterwards, today are for Davenport, SEC us begin our we fiscal morning posted with CEO Relations for presentations Darcy will The question-and-answer Darcy press and earnings Brands and brief and and slide Paul will XXXX Investor me second release quarter remarks website prepared CFO. and that filings our today a With support are on call. President the bellring.com. you our thank BellRing in joining supplemental and have sections both at the and Paul

SEC’s addition, website. In and on release the slides are the available

to uncertainties forward-looking statements. that actual obligation be investors the and date continue, statements. that statements, results materially of would management you this these could forward-looking call contain by these current we this no should and are These will I subject risks differ to statements of as which undertakes are like remind as carefully update considered to call Before from

call on being website. a be this will an And measures. available certain discuss As audio reminder, finally, replay and recorded non-GAAP is call this will our

that, For With press I these GAAP will release over a nearest the Darcy. on non-GAAP our website. reconciliation turn of measure, issued posted see measures the to our yesterday to and call

Darcy Davenport

grew in channels year easier impressive XX% XX% international quarter, sales Dymatize million EBITDA difficult net strong benefiting comparable. results a joining thank by pantry the pleased with our with this us. brand. am from results and reported for Premier website. were $XX evening, COVID sales strong, Net lapping despite on the to loading further our results of adjusted you posted were report second and presentation of an million. and all that to Thanks, an across prior supplemental Jennifer Protein quarter driven Last and our a $XXX we up comparable I

line momentum, first sales between year. raise growth Our our We and long-term $X.X of outlook our XX% to half for XX% algorithm net expect results, to to and billion XX% confidence us equaling with billion, $X.XX give top of exceeding continued to the XX%. be combined now

also are adjusted to raising between million range our $XXX $XXX We million. guidance EBITDA and

are We sales our excited about momentum.

inflation However, our ahead as expectations. to cost pressure ramps we of continue experience up

our business, significant Our price shakes, increase goes and cost-out are are increases third expecting margin into on offsetting anticipated year this to freight largely we whey in with are next. quarter, on protein and later opportunities powder pressure effect our On which this the commodity and the into combined programs headwinds. additional mitigate pursuing

growth Now, turning our The overall and convenient highlights strategies. category, to stable remains healthy. brand category nutrition and

and protein see with space historic growth wellness, health shelf such to category and momentum Liquid strong continue powder and as driving outpacing and gains rates velocities. by trends of mainstreaming macro growth. We snacking remains strong driven

quarter the the top a was incremental activity across category. and we increases, channels. stock-up. elevated convenient shake consumption this a healthy Premier consumption year COVID result tailwinds last accelerate, of Distribution of mobility grew Protein growth. to both velocities overall to This additional expect promotional As growth as gains, this an nutrition quarter on XX% providing category drove and tracked strong untracked

year way, with grew channels each compared nearly our of and the e-commerce, ago. food to All XX% mass growing leading

accelerated in the XX%. deload up we year prior April, significantly consumption pantry QX, As has lap overall in

versus consumption seeing March. up However, strong sequential XX% even encouraging, with more growth we are

prior of our continue X.X%, year. great progress We make to of strategies. Protein’s increase XX% all-time household Premier growth penetration an high against reached over an

We the remains sequentially ago. versus line had long-term and a to strength XX%, why this distribution we highlights XX% the brand of on XX-gram category in continue in XX% business. year up QX which rate with TDPs leading brand shake great repeat believe and Our at potential build the of

in tracked percentage XX.X%. market X RTB Our channels points, gained share reaching

contributor Our strong our performance. national and marketing quarterly campaign, which kicked clear was January performed off to in well a

continue remained and growth drive sold. Latte Café sizes in new top Our significant were and of the Cinnamon in to category distribution. flavors pack the XX% Roll

strongest by and launched flavor, quarter, Premier during newest that start, Peanut a in velocity. fantastic also XXX% becoming Our Chocolate QX. off our channel. with great consumption Butter, quickly up to powders both was It’s e-commerce distribution had a driven in third tracked flavor

is channels. right by Dymatize, e-commerce working. of our channels business distribution expanding mass for these identified XX% PEBBLES ISOXXX, sizes excitement more strategy to Fruity driving and is are pack club, also all media. brand the and driven dedicated flavor the responding channels products to mainstream bringing Cocoa across brand Now, to up domestically and to well We velocities channels. and the The was and

club To with Protein rebounded Dymatize Canada Our by successful Dymatize’s Premier shakes international sales and campaigns. we year. saw to COVID close, promotion digital media XXXX. first both our of international lap I in supported remain confident for and impact XX%, grew national plans a contributing. began meaningful growth, sales prior as Premier in the our

is significant tailwind. Our a providing healthy, category

portfolio have strong complementary that a We of consumers. brands target

and advertising are driving household penetration. growth working, Our and promotions

Our meaningfully continues distribution to build.

the of thankful our business about proven in drives continue us the and to all be allows our to and optimistic generating I hard growth make We am been. day. our future to and work over cycle. is it are for the in it now happen consumer I and every thriving employees, the who our Paul. tactics continue our I turn Our call ever performance will pipeline recent strongest new excitement innovation our has reinvest what know products market those

Paul Rode

for and Adjusted XX.X%. and up were EBITDA Net $XXX.X Darcy was X.X% million, was morning the good Thanks, $XX.X down million, margin X.X%. quarter sales everyone. EBITDA

results COVID-related increased comparable As year Protein lap loading. by Darcy second we strong driven RTD shakes. were against X.X%, Premier tough net quarter a indicated, as our pantry prior sales primarily

promotional also club growth XX.X% and strong products from by lap this distribution by sales growth. driven mass in Dymatize sales. net mix from as and gains distribution incremental also benefited results begin existing customer activity. net COVID-related declines Dymatize’s Protein and products both powder year-over-year favorable from and customer to and net driven year. benefited grew to sales product FDM sales gains mix quarter new quarter Premier increased we strong were international continued a the growth Favorable e-commerce growth. sales a and benefit the in showed in prior Second

X.X% to XX.X%. consolidated this $XX.X profit million decrease Turning with margin back gross quarter, to gross profit decreased in expected an results, of

expenses partially planned the million cost, and our SG&A million offset to of restructuring XXX $X.X have current and non-GAAP separation closure previously we percentage adjustments decline by net and As incremental freight were year expenses lower sales of a in declined for included costs, points activity. facility results SG&A from to expenses of as of higher measures. $XX.X input million XX.X%. basis promotional discussed, as this realignment. $X.X These which both treated business related were costs were

as This adjustment higher decreased compared our prior despite million of and our in was to leverage base. by Excluding million to reflecting SG&A $XX.X of with connection treated year year an prior measures. to $XX.X Supreme expense for spend and non-cash discontinue marketing was these recorded negatively of of decision expected was million $XX.X items, accelerated non-GAAP flat amortization. a brand profit our Protein $X.X impacted million compared was SG&A Operating

of in $XX third be remaining million We non-cash quarter. the accelerated expect amortization recorded to the

reviewing a quarter We would on Before had operations. comments $XX I few cash a like second our flow, cash outlook, to generating make strong flow. from for million

reduced Xx. be leverage was net As million. QX now million of XX, of million, was million expense $X annual our by re-pricing opportunistic We an net to loan. interest interest $XXX with $XX debt This approximately In expect term in and year approximately and both cash cash the QX. we completed March February, for $X our

billion the sales sequentially, second roughly in guidance outlook, Turning with our $XXX QX QX and to XX%. of expected result Darcy updated million. line our expected half to across with prior XX% EBITDA to to are implies growth split EBITDA QX. Compared as XX% fiscal to and promotional growth range planned higher EBITDA between to net adjusted top Sales marketing XXXX are grow of in to of XX% we a and $X.X and spend to range our billion, raising million $XXX year, guidance as $X.XX previewed,

Our anticipated notably guidance than gross pressures, second our impact whey to for expected is EBITDA inflationary contemplates half higher which and revised milk margins. proteins,

are through pleased our the We performance with first half.

unchanged. back for Our the that, confidence in I questions. the BellRing operator With would story the turn remains over to like to call

Operator

Ken come question will line first [Operator from the Goldman with of Instructions] JPMorgan. The

Ken Goldman

the very you inflation. bit the I thank pricing to it had margin. is you wanted that commodities inflation saying you. and thought are gross understand freight of saying higher largely your the the will offsetting than the I I Hi, thought then a at the earlier was you heard just I But thought been little and that end, guidance. hurt

pricing just the of as higher is I balance out think about that we here? margin the model So, gross as the wanted well? to

Paul Rode

we Yes, has the sure, second February primarily that. than I’ll Ken. expected, our more take call, increased in Since half. inflation

from several was add of increased thing up. perspective but the expected. margin not individually really The fronts. inflation and that’s second one quarter track It’s right a But we second across on they has what it’s half significant,

proteins seen whey degree, have lesser milk a freight. and proteins We to some well, on our as increase

quarter. the a the the bit than second price just So, anticipated in last our more is increase inflation we is offsetting half. inflation It’s

weighing So in that our on margins is half. second the

Ken Goldman

but know why Okay. season understanding that wanted not product, are season I questions or – prior sense how about consumer a that? in I your well that bit been of tell concerns little weight get quarter? understand come little shifted a than a years. really bit that just third is have or in loss I into for potentially you then went bit easy is weight purchasing did coming seeing to it’s it a And to did gets your loss there always lighter some just a

Darcy Davenport

you, Our did season. well. what of term new you we QX, as loss know kind weight of new which are year, think I is kind We what really saying you

– really think it on on-the-go. was and category, the So depressed just in the form it it’s dependent it – I by what

on liquids powders and that for did do bars heavily So very occasion. weighted well well because and not very on-the-go the while did really are bars more instance, was

the exception you I everything last when the be category of in weight. increased to quarter overall, with think and at liquids powders, So needs this look

And you is sports. Dymatize was was up the in then down. up, overall when sports which Weight and were Premier plays both nutrition really up, everyday was nutrition and And was nutrition category, that the across powders down. was so liquids area bars look adult is and up, convenient

category nutrition there do I I think weight people. much the that than that the pandemic management. what who think will drives the to think So is convenient back. added no doubt – I it is do But that are people come bigger weight just has

Ken Goldman

Understood much. Thank very you.

Darcy Davenport

Ken. Thanks,

Operator

question Lazar will of from line come next The the Andrew with Barclays.

Andrew Lazar

morning, Good everybody.

Darcy Davenport

morning. Good

Andrew Lazar

right, there are mentioned among those run-rate Darcy, a it’s significant left you things? those I to one household do that, answer, sort listed that the that obviously I how I get that’s and towards And room starts gains a you guess with some important of developed in of about most think want drivers your much is of I to about think How I flavors the shift how sense the these bit is in XX go? particular available, I it. know think forward? left previously channels. question thinking to about reaching but – X.X% less the distribution penetration, little of you now is going

Darcy Davenport

overall I always category yes, think is look The is driver. XX%. – The liquids And at the category my at is just around you upside biggest at penetration immense. convenient we And penetration, being household is X.X%. The probably still know nutrition XX%. household answer.

well new the have that there – driving, from is distribution what’s household a household are are upside the the rises. of in penetration what’s as just it the right is our is we seen as really nice advertising, in activity is much a flavors. lot channels, launched we But we by distribution promotional have driving as you so standpoint, tactics new so that So just And penetration.

our a of space items sense initiative an have to working. average upsizing the about you tracked and X.X Our just we shelf. in give on flavor is channels strategy and But absolutely upside, our of so

shelf. XX of equal share competitors, about have has which on as they One our the an us, items market

that – So, we incredibly SKUs. gives have productive you just

distribution is very even the year versus potential upside our is so though ago, up still And XX% large.

Andrew Lazar

of and then Paul a And movement pretty can sense those the this terms can least with what your change terms you for for in in that. visibility Trying of good – what of you have do year? to Thank handle you your follow-up, respect sort in a for year of at quick be a rest or cover? cost, fiscal locked cost just this now things coverage terms how that much of a sense of your of have in what to get forward be outlook on not maybe might or can you for

Paul Rode

Yes. we this good again, feel on isn’t At time, year, margin have handle in this point understanding at the coverage and in long, protein half. the Freight but quite the part, we with most as the a in point structure pretty side. pretty our the second of comfortable for

Andrew Lazar

Thank you.

Operator

will line Chris of Stifel. Growe question from the next The come with

Chris Growe

Hi, morning. good

Darcy Davenport

Good morning.

Chris Growe

pretty the you quarter, little you revenue but growth just for second half of going significantly. had second up the I had guidance, a your on expectations question obviously, a in beat is

much I expectation to of that? revenue the sense year. did talk guidance sequential of increase, a improvements XQ, really nice that of a about, think remainder But split XQ the have through April. think sense that just and I seeing you as or just of trying you is is get are kind of to it XQ about how you across want in incremental that seems growth it a like get and You significant

Darcy Davenport

Yes. XQ. across It’s split XQ and

of QX COVID. XXXX trough pretty So remember, had big the following

if on more if results a we XX% exactly organic we HX, did growth, that you sales a distribution. to is sense the of And we give So, just if – – already our would increase. be same that were if have – what top as exactly just

incremental We in half the promotion and incremental advertising. some second have

gives that are you build so why you with half. So, gets to it comfortable XX% we a of XX% growth hopefully the – the our seeing in back

Chris Growe

I And Paul, one I guys. you, a the question. just inflation to a bit think had for question, Thank helpful. follow-on other That’s of but

inflation half up the half know of get to in So, of first I trying where half. bit year second through. second caught versus of inflation. Is just a first of kind of half half the sense shifts is? a year? of first to first the have coming you pricing the the that from rate could half quite to you realize characterize the I the the had how half I’m second

Paul Rode

Yes.

versus on based higher – first the protein our second we half. guidance, expecting The definitely second half, revised cost whey milk both have and we’re in the half

up is year-over-year we And than anticipated so it previously. more

inflation. on side, percentage milk the On a small it’s relatively single-digit basis, low

really primary So on some it’s our fiscal whey we ingredient our more We fourth is change. whey year. inflation much which not It’s ‘XX, On do proteins, we’re our this a in impact impactful get seeing more is significant as powders, the major more as us increases for on on business expect those that into the concern. aren’t quarter. powder for

Chris Growe

Okay.

realizing be below So half you again, have you first call through? it it and second pricing like – inflation the the of Would some rate that half. that seems fair of coming characterization, a

Paul Rode

but it’s a you’re of rate, lower The still at Yes. a inflation, is rate correct, headwind.

Chris Growe

Yes, sure.

that. for much so thanks Okay,

Operator

Evercore Thank question from comes David of with Palmer the ISI. next you. line The

David Palmer

morning. Good Thanks.

get of of and of year-over-year the through increase and wanted the level – you sense happened. plans out XXXX, see to quarter spending COVID a how that I’m and thinking and is promotion What the the marketing year. about in perhaps big had in you sort playing Just

how you of some some leftover think about that making will coming you’re be I’m there COVID. is consumer wondering business even and out pivoting So behaving perhaps if the

So any color there would be helpful?

Darcy Davenport

Yes.

yes, go – our So ahead.

Paul Rode

want take give the do and the qualitative. then can I numbers you to

versus So last marketing up second quarter $X you’d was million asked about year.

marketing spend net half sales. around X% of Our was first

a X% invest as similar range sales high turn And I’ll percent we the look continue seeing over then we’re Darcy we effective. in net marketing be of color. to As second half, at Xs to for really as to a expect to the additional

Darcy Davenport

working. from and a just is standpoint, a yes, strategy pivoting And advertising the

I our think why fans our guys of strategy taste I’ve last year that we year I this – we’ve about the used product. devoted the change is to other love slight you – long they think which tell made our versus to talked consumers testimonials, change

is call that. Premier to analog amazing digital which brand, differentiates focusing And about augmented we We on have new is really – post the continue is flavors. things Protein with the tastetimonials, will taste. of we one it have added and we that what What use commercial, our really which the

Café So one Latte. on we have

on one and have really caramel, We they performing. are

So we flavors the actually line. rest those far of seeing are velocities both on exceed of the the

nothing So do our business. just move. has that COVID. knowing It to has do to positive what more It been a really better has better we what are with drives very and getting at with

David Palmer

your how the comment, think replacement of immunity that Is you meal be that? of positive almost by and – weight And more will the be do the a outweighed purpose. or of for let you you immunity your effect that going those it like How or people you’ll use on states that, and speaking net looking dropping weight it’s – point, on forward, aspects how your be you your need the playing product do Just think in comment to whether the thinking management are seems you’re will management you your consumers it? than product, comment maybe not about future. the of off let about i.e. can functionality protein almost part message

Darcy Davenport

is many different that You’re absolutely occasions, it need right. What different is unique so appeals states. many about Premier to so

as should our to There good consumers their at is campaign, So prescription it. if we to life. it allow be mean, I they to no use too good. into fit you look how

nailed you absolutely, it. So

people vaccinated, it’s be we We don’t comes that still of second to we the we’re it changed and is immunity think are after an summer. – immunity trend. top our are putting mind, completely We and think health question, wellness, We still immunity, out continue think we this a this actually – later it having will and think going so still – On even drive category. this product, to claim. is

So we weight, that’s happen think into is just that be additive. people think be going will it’s don’t going going it’s What the away. leaning to I to

David Palmer

you. Thank

Operator

from will the come Morgan question line next The Kaufman Pamela of with Stanley.

Pamela Kaufman

Hi. Good morning.

Darcy Davenport

Good morning.

Pamela Kaufman

on mentioned you for Obviously, your your gross for margin facing change like you’re split than year? driving marketing the versus seems but change spend. operating you the expected, outlook and also between Can EBITDA it outlook the the expenses originally in incremental margin in inflation more comment

So how your should we think lower-margin outlook? driving about of two mix the the

Paul Rode

Yes.

is on our by inflationary outlook primarily gross driven of our lower margin because our – again, margins on freight. being proteins expectations lower the pressures Our and key

We a more investments, bit it’s are our an of brand but to overall as spending impact on not much margins.

line our largely in sales with We’re spending growth.

Pamela Kaufman

And are the mix Does about as coming in to you what well? have expand over as customer impact can expand you thanks. as you in channel club Okay, you the FDM? your you this And talk implications seeing expect into distribution profile evolve any FDM? then how your see quarters margin on

Darcy Davenport

overall Overall, similar I’ll margins you different the and our to – hit pretty – can across are this. I mean, Paul, businesses. our add

that little a is higher, our From but customer have club – business. a FDM dramatic. nothing really clearly, a large So factor. isn’t we our mix,

is what we our as growth food that and drug mass in eCommerce, think into higher. – and I FDM, expand

And will so that change. split

this I’ve before think together. works you I and of this about interesting, is what’s all talked However, guys to

pack that sizes, in as but these are there have other channels. – smaller we they other we are launched sizes these – channels, different – So in these new

trying introduced in often, being And mass product to and repeating club. product food, in are people are the then then and the And so, they e-commerce. drug,

more club trial into work, kind virtuous the the being and one really So feeds channel. cycle it then of

overall, gets So pie just the bigger.

Pamela Kaufman

Thank you. helpful. That’s

Darcy Davenport

Thanks.

Operator

Securities. come question from Chappell The the of will line Truist Bill next with

Bill Chappell

morning. Good Thanks.

saying most is your taking Just Is I in two that calendar One, of pricing There that promotional questions. half. pricing. back more am of is correct? change no real the right the list kind you’re follow-up for

Paul Rode

quarter, calendar that’s Correct, and was in yes. second unchanged. and And going half promotional the into the the our specifically towards fourth year, skewed

Bill Chappell

it. Got

through alterations incremental just costs there. list not are It’s the So price covering the increase. any

Paul Rode

– the on on shake that’s our And correct. business, Correct.

Bill Chappell

And the maybe second, just channels. follow-up it. a on Got then on

planograms in especially FDM? gains, versus of of at how most terms up kind think of that that what space you year? does set was general, this Now does I how shelf of going reset, are compare forward? And in kind But the that year last

Darcy Davenport

this We gained year. than last more space shelf year

space shelf So we’re tracked significant change. up channel, XX% in in so

is obvious. we’re we X-foot happening that pushing exciting a also what’s set, share and think – seeing which bit category. customers for it’s within But are where which and we’re I we FDM, X-foot great some is a – is set seeing gains, have tremendous – the market what’s little

to to the to FDM – encourage we’re So to because category. them customers expand our grow really space sell across able it will to that their

Bill Chappell

fantastic. it’s Well, much. Thanks Great. so

Darcy Davenport

Thank you.

Operator

Credit will question from Kaumil come Suisse. with next the of Gajrawala line The

Kaumil Gajrawala

Hey, everybody, good morning.

Darcy, is The growth opened with first question, you category accelerating.

there accelerate. is rebounding something ago? kind to You your We this more you anticipated. what might or than are it or view expect category perhaps are acceleration of hearing companies Is kind the few of have other demand kind to growth different a to continue – seeing plan bit a about quickly from according a few of years from been

kind So structurally it comp year-over-year shifted thing something to is is of have seem or [indiscernible]? this a

Darcy Davenport

growth slightly The it’s we seeing above are seen I category above rates. – historic – category

– of So X the about seen category about liquids X%. – historically just growth specifically we’ve

and so past slightly X%, and higher it the We are X% too. definitely than higher our between seeing expectations, than

Kaumil Gajrawala

elasticity? then the once – us past, And the give take color sense? about what in this given input need what any planning to go Obviously, price talk pricing Can around or on you’ve again. seen great. you’ve costs, you to for Okay, you’re commentary just a you

Darcy Davenport

Yes.

So about the we ‘XX, we took price very that and were – elasticities in-market similar what to we we in this projected. talked and

what we to we or are in those pretty time our experienced increase pricing took this is So ‘XX. in what similar

the expecting we’re same. So

to obviously, far-reaching in that outlook affecting do be here assumes other is given competitors proteins our especially inflation the everyone, freight, competitors the that case, and conservative. And then price. the think no it expect upside will I take If follow. we that’s

Kaumil Gajrawala

you. great. Okay, Thank

Darcy Davenport

Thanks.

Operator

with Jefferies. Rob from come will question next line Dickerson the of The

Rob Dickerson

innovation robust. so earlier Darcy, remains you heard the comment much. Thanks that Great. pipeline I

mix the well. just I the are into little dig of Shakes going is Obviously, to to that bit. doing increasingly want business shakes. a So

is shakes, obviously the kind just It highlighting a let’s focus, as of not business of kind gradually right? You’re bar much seems of if as say.

I two, be you to other innovation, then know and are kind if speaking think of just flavors, variations don’t one, that’s shakes, what have you products into well the distribution in extend or might that you other certain bigger brand categories extend picture velocities it and about the works work more So when areas? with the you and well correct; or could of you

Darcy Davenport

Yes.

Our and on both beverages, focus definitely is so ready-to-drink powders.

We have least pulled at domestically. bars, away from

We still bar – a pretty in EU. business we are still the have strong

continue So but you’re the our right. we on that, of will bulk business, exactly

focused innovation pipeline, on incredibly I am our about. excited We’re Yes, beverages.

this and area We into really off. paying have really leaned it’s I think organizationally,

So look develop. idea to that new Growth. when coming – of We’ve our to pipeline, rate talked on ready-to-drink I from would – a claim, also ready-to-drink a are complicated [indiscernible] because added expanding household penetration our about we R&D on and few VP working. We’ve immunity still out flavor. you we team team. and a standpoint. this a I really we’ve It’s the but new, they have products is We are it year. buy of And what to working but this call the later focus at really very insights expanded hired focusing powders,

we I’m on will But function. of – continue I continue brands. benefit and to the about bring pipeline excitement put So And we’re excited areas. think going then into our we will flavor also around about I kind – flavor function. both what we’re I to that’s And think is new news exploring of really the elevate that. and it’s

opened added when benefit by the what occasions Latte been occasion. the new predominantly of Café caffeine. has encouraged It really breakfast We’re to results we of a up

shakes seeing drinking we’re late afternoon. that Now people in of kind

beverage And new success, the potentially that about other we’re thinking it so the to But likely be category. already areas benefit category. leveraging will that are in

be So ready-to-drink powder. it will either or

Rob Dickerson

space competitor end than has you And getting is say for, new just – right? SKUs, earlier distribution for of pushing existing plan, on fewer there, you would to so the next much. Okay, super. really just example shelf the let’s gain in into bringing second new That’s retailers distribution you about new new a closer from the getting So call at now, excellent a that that incremental the so bit potential distribution then in and within and Thanks TDPs market on you say, current question as SKUs, more we you’re, kind if you’re had look gain through customers and the that innovation have it, think or it. customer preexisting customers customers? ‘XX push a is so more space versus the

Darcy Davenport

Yes, correct. existing more is immediate opportunity. opportunity our the We just bigger The see bigger space in customers.

it’s and – of is a food and convenience there like recently, We’ve we yet, that’s service trial channel. about kind very and growth it’s channels talked talked well, haven’t last opportunity. a definitely which really really about new out-of-home the area. we the again, a in We’ve However, great that’s the year, entered into dollar channels, gone doing Well, big channel.

as we then we’re would groundwork say new already are, I the but immediate So biggest space opportunity more channels the definitely laying is for well. where – already short the

Rob Dickerson

Thanks, Alright, great. Darcy.

Darcy Davenport

Thank you.

Operator

Ken The next with the question Montreal. Zaslow line from comes Bank of of

Ken Zaslow

Hey, good morning everyone.

Darcy Davenport

Good morning.

Paul Rode

Good morning.

Ken Zaslow

back talk about comments than separation? your maybe kind back opportunity Can just how case you years business like next seems parallel has thought initially seemingly of more initial your the Dymatize to you changed? is in there for It there

Darcy Davenport

Yes.

working. strategy on is to definitely brand the around is expanding Dymatize channels mass Our

product really working. the all line is media of focus a line flagship and as Our also that around dedicated rallying ISOXXX around

and I again, specialty sold Dymatize But figured in of of is was a – the everywhere, ton across us then is to is channel very think and doing incredibly I we channels, think growth I specialty And too lot the flavor is will just is within think, being and think still there limited. to excitement is only continue consumer expanding recipe The they that. But eCommerce kind around we be. of shop out it. new these The licenses, there works. that so life. important that well, again, a opportunities the the of old channel bringing

Ken Zaslow

the Premier, the there. algorithm is With XX% XX% growth an long-term well then else, actual your between there. to Dymatize the than that you seemingly in as more you. think a algorithm forward? than in floor do and the of XX% XX% of And shelf business a as I’ll more that going it performance anything seems leave momentum the just like is given that to change It space Thank floor

Darcy Davenport

still think don’t it’s it’s good I I a think floor. a algorithm. long-term

so new will is and public know. noise we’re if lot that algorithm. been We to company, we a There the will continue guys went as public, evaluate we of a – you still since is right

So it. but year, has it obviously, exceeding held. just this And – we’re

continue will if portfolio see our still it there we will that we and look move And is if upside, assess We given update forward. it. brand to

Ken Zaslow

you, be Great. Thank well.

Darcy Davenport

too. you Thanks,

Operator

next with English The Jason of question Goldman come will from the Sachs. line

Jason English

present good or quarter. the the that am folks. play of look the time, not from now durable lot. other the good club rate sounds for morning, I of what Thanks distribution question guess for lot of your going a like And is slowed – we business. where It long growth side whether Hey, business another question. if congrats your the expansion. a channel has one on right it. you’ve right channel, for at Appreciate been coming And growth a is I to

low into growth. type single-digit We’re down

growth channel? happening then And the look us of distribution the when to sort as of play reference should is give we at the of devil’s sense that advocate, club a sustainable what point in tailwinds you can subside? for us So what’s

Darcy Davenport

It’s a question. great Yes.

lapping. But channel factor So what about it really was this digits. low of it’s club you’re quarter, absolutely right, more is single a

stock-up COVID last other the more it It really affected early and So affected than channels. club. the year,

it. So we’re lapping

actually is you much with of mean, and business big look in line at – I rest our the If XX% the it’s a April, the law up numbers. very business. obviously, of

we the that other the new we’re because because But I we club, – rest move see cycle to partnership club see great still into – So driving customers. with and the – still they with for where driver long-standing but of and of we our we go we long-term upside innovation, and our that and there, trials and just earlier and business many and there we a still we’ve about really the get see and are built partners, growth, business. them through like channels talked as repeat model these

Jason English

Okay. clock And liquid That’s you. rewind you time new attracts competition pushing was on a coming the public. brands always coming lot that competitive proliferation of of of forever. Are helpful. we highlighting very growth the competitors or then the terms to sustained space, label and in like out reconcentrate mode There in a growth and dynamics Thank sort And Retailers or obviously in the category? still private piece were in. the to you’re of begun of get trying in shake and stellar come some this sort of there. were we to have

Darcy Davenport

and I there has mean, always category you is well. – described a a to high-growth to lot – going is there it always been. This competition, every we’re of be be going so

XX-gram a specific the height on shakeout we of bit when went little a competitors, seen hit seemed to have which public. We

of been that discontinued, there are them stay. Some will some but have

through of at years, is have able I to even the digits. couple think throughout we entries competitive double way the – same last grow all been of the still it the we look

different comment category. is has category low not the spending, hate you’re people new to bad, that about I we So penetration. category. means are And to when good. think something households, It talking new that driving competition especially is people they are we But competition such bringing they are the that a household bring the

that think retailers issues label within quality – private around private seen actually softness of some on liquid. have private the and some enough, They quarter the just are this comment, and seen some supply. down, and I so has label label And then interesting

is And this their think complicated, it’s what we’ve product understanding so and for form touting I that of a time. long been kind

Jason English

Makes sense. it pass will lot. I Thanks a on.

Darcy Davenport

you. Thank

Operator

conclude your thank disconnect we with and for have please questions. today’s This We that for And you your our conference reached time allotted call. that, lines. participation does you ask

BellRing Brands (BRBR) 8 May 212021 Q2 Earnings call transcript