BRBR - Earnings call transcript Q2 2024

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Operator

Good day and thank you for standing by. Welcome to BellRing Brands Quarter (sic) [ Second Quarter ] Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Meyer, Investor Relations for BellRing Brands. Please go ahead.

Jennifer Meyer

Good morning and thank you for joining us today for BellRing Brands' Second Quarter Fiscal 2024 Earnings Call. Darcy CFO. President are Paul CEO; today our Rode, me Davenport, and our and With Paul begin release bellring.com. and posted Relations a presentation Darcy and will support on brief we'll and that Filings both question-and-answer have our afterwards, the website session. The the remarks SEC press these and in slide with supplemental are prepared Investor remarks, at sections

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

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

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

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

Darcy Davenport

begin Thanks, quarter Jennifer, a we QX and all on and that share presentation Last drive as bring joining an happy above first to we and results supplemental expectations. demand. new I'm our to results to website. posted continues our accelerate our to reported had thank evening, we with shake business us. excellent you second for half, capacity The

prior adjusted club was in a of excitement. Net ton the XX% sales retailer first XXXX, sparked year which EBITDA For X consumer quarter, X and since XX%. executed over promotions time up we and successful grew

net demand, margin adjusted specifically EBITDA and shake sales greater-than-expected non-promoted, drove the Our out-performance.

capacity expansion top price over our shakes strong the press trends, execute to and to 'XX better-than-expected expect in on our fiscal XX%. a XX% the release, in We confidence first our XX% This and to grow we line increase bottom yesterday's and QX. now consumption at half saw XX% EBITDA you performance, grow adjusted outlook in to for to decision raise the raised net on sales year. was based late As

shake to Moving production.

progress in diversify and grow supply. remarkable our plan made our have We to shake

making are in remain in expected production production weeks track 'XX significantly north to increased versus as quarter. up and with by quarter year-ago coming every QX the and more net on year, strong this year-end. of We growth sales shakes We of supply grow enabling XX%

all growth from robust was growth expansion. The successful Flavors tracked e-commerce QX, consumption consumption to quarter promotions mass up some in the households April strong value as shake new to nutrition distribution the convenient in Protein was Now remained to RTDs. penetration. channels. products, lift led retailers and major promotional with out-of-stocks The at at driven behind drove around quarter volume to e-commerce. in Premier nutrition Despite category. both driving tracked club strong, including up this of ready-to-mix healthy the health to club as growth the channel Mass by in and brands drive beverages grew promotions gains, brands growth. and functional this sports the and continue retailer most strong and X% XX%, of and continue events. XX%. distribution distribution excitement. in drive saw XX% The consumer into down in interest QX and X%, our the by category brand while activity and highest channels ready-to-drink brands promotions, bringing tailwinds outperformed powder growth by be category. RTD slow boosted updates. Growth remained grew consumer despite to behavior, Consumer household and traded across consumers mainstream switched and high and category, velocities high-protein fitness still change category benefited gains, and this strong continue wellness driven in products display other

XX% with Our is well performing in velocities Dough mass. Cookie newest flavor XX-gram top

salted solid flavor, seasonal caramel Our popcorn, saw success.

reaching in -- Our grew #X we brand over market this the than but slight metrics segment convenient remained and broader quarter supply brand decline. healthy. position saw Retailer see the its prior half. I'm XX% maintained levels stabilizing, remained second in to the TDPs in starting the share April. high all-time the as prior are another X year pleased in added experienced improve, household we over throughout the nutrition and as top quarter, XX% a its demand TDPs of with greater Protein quarter category. Premier sequential tight year. grew and RTD some point of and shake With reach expect temporary households. expected #X RTD household this with well the to XX% QX inventory XX% out-of-stocks improvement of as penetration late remaining penetration quarter, into further brand over the percentage Premier Protein versus

significant was the of Protein's the overall Premier be and in a brand RTD penetration remainder to category growth. of the continues highest household 'XX. in expect the the to growth As modest contributor fiscal category, QX, we

growing to growth segment gains the ready-to-drink brand distribution Protein this same a X.X% Premier we bring Its growth bars XX% the did outside brand continue in powder its remain format. We Protein consumers in still category. categories QX will to from the believe mainstreaming continued Premier energy the with quarter, existing opportunity tremendous With the penetration XX% and potential strong investments, and reached below the the see Premier of the the way for mainstream and drinks, by powder to our in penetration coming to category. powders of we that household grow channels. Premier velocities. this RTD household such continue behind category nutrition its be category contributor into brand strong encouraged in as trajectory,

consumers continues Our brand. the perform new strategy well attracting frozen and cereal pancakes, licensing to with to

X X a not nearly Premier's products boost Although revenue XX% in driver, households. significant to penetration household or X these overall

channels, in penetration specialty its competitive down these record high headwinds, softness to see ongoing share Despite increased TDPs strong U.S. holding and and in X%, with Dymatize. e-commerce. channels consumption but FDM to weighed consumption activity household Turning the maintain in encouraged steady. by brand mainstream declined I'm remains overall

our forward, marketing the increasing brand behind and Looking promotion. both we're investment in

excited back expand McCaffrey. our are campaign San running national marketing Christian All-Pro with We Francisco to

powder Overall, continue opportunity line. us excellent be eager putting first-half impact We digital that to product the and Dymatize's we expand an enhanced and are innovation household on year. X for fiscal influencer brands. In position bullish with closing, the that final the above-algorithm complementary marketing awareness see on brand are touches will mainstream on results our a have penetration. Last, to top-tier we will the well

the remains strong. BellRing outlook confidence long-term for in Our

Premier are growth category. and of leading are early brands highest segments leaders the with with an in in growth the Our brands mainstream on-trend low are major powder penetration tailwinds. areas Ready-to-drink of and household loyalty. Dymatize Protein stages strong and

start to as Our in we layer -- grow to promotions. layer on shakes momentum continues

is over more into plan look turn our excited to marketing. Thank track XXXX many capacity progress layer our and innovation you shake as growth. I'll next robust we Our on sharing for years I'm Paul. the momentum in We now forward call of quarter. company. your support in the to to national continue to see interest

Paul Rode

and for of million, year, an channel by input Compared EBITDA prior the in net a RTD our year. sales quarter by behind basis increase e-commerce was increase X% higher on gains activity increased activity. a profit of spend as net margin brand and a shakes deload. Dymatize increased our partially XX% consumption Adjusted XX% Thanks, domestic lapping volume to XX%, net this expectations, grew in our from net benefited cost million gross sales the percentage dollars of from Protein year Darcy, but percentage greater-than-expected along margins prior everyone. sales with powders. $XXX flat to The activity. Gross $X increased of XXX Promotional increase Adjusted gross leverage partially of in $XXX above organic gross sales. Starting incremental as Net with growth expectations and profit with promotional Shake the demand the primarily margins gains was up of the also specialty sales. XX% favorability. SG&A non-promoted mainstream XX% in benefiting biggest expectations, expenses continued were out-performance. channels, resulted to EBITDA to good strong with XX% and prior sales from benefited with brand morning, X.X%. from and growth grew deflation, strength. Premier strong points the increase growth nonrecurring performance. shakes, cost over $XXX quarter Advertising flat trade compared driver by Premier international driven and and net inventory offset margin exceeded shipment competitive XX%. distribution million, promotion offset for were grew Protein XX% sales an These net for increased were the million weakness activity, at and were distribution difference XX.X%. net favorable volume of the and and margins as of roughly drove promotional

on second Before first flow reviewing from liquidity. We cash million few flow I comments like million half. cash make to the $XX a the outlook, in in and our $XX generated in would quarter operations and

in net growth exceed the modestly second supply sales of weeks to 'XX capital our fiscal rate we working shake add net half. expect growth We in as

in anticipate shares per and XX, $XX million net leverage EBITDA generation, will XXX,XXX bought was in flow of X.Xx. of below share at or price and average million strong to we Xx With $XXX total. net repurchases share fiscal an 'XX. With net our this respect growth As debt was we our remain leverage March cash quarter, $XX.XX

is authorization repurchase share remaining million. Our $XXX

guidance Turning billion to to to fiscal EBITDA to 'XX be and adjusted raised We million. sales million billion $XXX of our for net $XXX outlook. our $X.XX $X.XX

of line consumption of with adjusted results Our and XX% our XX% updated at EBITDA guidance margins a the better-than-expected XX.X% midpoint. strong EBITDA growth implies first-half strong to XX% XX% The of and to growth guidance healthy adjusted reflects trends. top

pricing second midpoint, XX%. sales expected to At increase approximately product and in to logistics the are half the adjusted quarter. expected our half net margins first of grow fiscal In second-half to with the 'XX, shake the fourth EBITDA are actions on late planned with compared costs XX%, of

the we we margins 'XX, by the lapped As half, we flavors be Compared expect fiscal similar. driven second of continued EBITDA to relaunched and momentum largely shake growth half second have be sales to the distribution to and expect gains. organic enter

quarter. third the to Turning

sales. In rate. load-in partially tough growth strong volumes largely as Premier comparable a brand net second-half in Premier net high activity. growth margins was increase with it This teens. to expected facing as our mostly improve we're Protein Our modestly track SG&A percentage ago quarter and in FDM growth momentum. margins a as EBITDA closing, is club are marketing higher with year growth display this significantly by to protein we offset Adjusted with as expected year laps the spend a prices. the drives the peak of mid from and first-half to are prior pleased sales gross offsets increase expected our to Dymatize lap incremental QX

outlook give long-term confidence I turn to results our first-half it and in us strong Our full will the greater growth now operator questions. for year over prospects.

Operator

JPMorgan. from from Our the Instructions] of first [Operator Goldman line Ken question comes

Kenneth Goldman

much a think those did heard natural to of generation? X. terms same I sales in attribute of And I in between little light you of Or that did correlation quarter this get mentioned the am what time? acceleration head? the -- playing a if there just I wanted in there, of products, too well new in the I'm non-promoted kind promoted a two you how my at sense you too, base the of I that right well quite Is up products do bit Premier curious just

Darcy Davenport

still of XX% is outside about our the be what what to growth of from what has continues and true so -- Ken, true category. been comes

the ship, get ton jump in fill household new And all-time on in continue So the we haven't rates general, category yet. of mean penetration to this and we we the up. I the sell. more a into high FDM we showed really quarter households healthy of our had X-point more

in channels so this we what X see outside pretty was periods. saw non-promoted much expected strong promotional actually higher those what customers, but And honestly, quarter club to pretty our all much we was was promotions in -- of the

Kenneth Goldman

you and think you've as and trying raise, -- Understood. guidance even the potential we about not than the range, for I'm to much sense And sales of there, there upper end potentially how I'm but higher look of get of could what there fish of the just given trying is then of the we ahead already guidance if to, a end to that just capacity? at, above toward is some a sort your high demand get guide looked

Darcy Davenport

Yes.

of our the production that range full absolutely guidance, We have obviously. can satisfy

to -- to need As stock. calls, do inventory. past safety I've we internal need not on We said we have enough build

to to we going the have more our X between However, get toggle If target flexibility toward continues demand inventory the X up be year, building weeks. satisfying plan robust, we to of of to sales. then to end versus and the

we've we inventory, are be but So that guidance then nimble going production high we're have have year full in assess building that that of going we're think this the and -- said end stocks, to... just to I situation always assured internal rest to because our satisfy the we to to just in safety QX the

Operator

ISI. line question next the of Evercore Our comes Palmer from David from

David Palmer

obviously with gross promotions. of club the the But at the X some in time, the strong margin. was pretty promotion quarter a mix had dynamic It you same ramp-up with

wondering is you if that, expect from of terms the upcoming was quarter? that expectation both this the in the to in wanted And I promotional the activity to double-click mix I this quarters. and pretty the that if was of -- to from kind of you in things. unusual on mentioned know the increase some So I those merchandising were the out price from would learnings, norm in close X What meant or of X. that impact

Darcy Davenport

with things. start on then and hit can any different mix, learnings you I'll Paul, price

since So remember, the learnings club at promotions significant promotions we from done XXXX. haven't any all the promotions, or so really

So it's while. been a

is what So to ton Get see I've to is the penetration. We the time sure on that for for true we about key this aisle, brand. has get and expect. It been the of weren't The we and there people has of get exactly for out before. where was this stick product, our the a household success talked promotion -- excitement. to our increase Honestly, been around. brand new bump entire display.

straight is of events, and strong enough, happened. results. a exactly and into sure the got ton what flowed We support great So for that retailer displays that

of I very confidence from there's excitement more are that So it's the of I would the say retailers. don't a lot and much and intact, learnings ton fundamentals think but of new brand consumers a

Paul Rode

expected that the significant doing of on shakes. pricing because And significant promotional pricing, be then the we we always headwind the were quarter second on on most to activity

benefit. promotion QX, in benefit the we a half, in in the shakes, second on lot fourth given quarter But still or headwinds on are a it's there. of in shakes, entered on more net-net, then modeling the we as not As get the in pricing. light QX pricing, late lot not And tailwinds But on expecting again, It's quarter, we any expect about 'XX. of impact so it's modest some in we pretty a really, quarter late a major -- at least light pricing.

David Palmer

And XXX going you the we would points quarter? And XXX-or-so the up gross on then the in describe basis there. maybe that margin, just How to the expansion that about how build think should forward?

Paul Rode

And year question ago? a to compared your is

David Palmer

margins. gross Around

to points net this had would and -- out it's are about margin that you gross quarter? if basis to to second volume then break mix know of due how if does many you commodity, apply had think how then just think about I how thing. to price each the leverage, promotions, talk half? hard specifically And I the you to expansion But

Paul Rode

Sure.

from a perspective, expansion So lower margin from gross cost. protein was significant

you especially So very QX recall, QX. and powder costs, into had our business high may protein last in in we as year,

-- a by in stronger second quarter, they year's in you cost. ago. fourth far last why last to our about the think then quarter, you third protein the is if pull And quarter year gross and which fourth were So quarter margins back, year see started highest by the

gross promotion that. significant offsetting partially That's specifically, look offset you as the significant expansion at margin by line. So at QX

We what nonrecurring also XX favorability basis some I just of about would from items. call points saw

minimum but costs So payments points, co-man, protein promotion. the most volumes, for by true-ups, of expansion about missing on that's XX just basis offset is

Operator

question Citi. next line comes Our Thomas from of from Palmer the

Thomas Palmer

as expecting we a I noted wanted year, quarter. off second input ago, less XQ, bit also the the to start you a favorability year maybe like environment, you're sounded it with along on the elevated back move but was through cost

there XQ? we a then 'XX point Or more as into of we to So inflation? is is fiscal And kind deflation of kind that return is it move less a consideration?

Paul Rode

Yes.

we go look mostly second half, increase XX% which our the at expecting second cost if from It's So the quarter, on a QX. up to from up are about QX to you powders, go significantly.

So it's the significant. Shakes quarter in third on start to modestly head up and higher fourth proteins.

still a third but see proteins very favorability fourth on sequential from So the ago. quarter. in We a increases, versus in year significantly does it start quarter, basis, moderate to the significant

kind favorability quarter. And little in last peaks significant but QX in the third call second So high year, last the kind pretty of head QX, starts of there's of the benefit environment it, the, and at quarter, protein the the the year's we're again, just fourth then in lapping floor very quarter, it I'll current here seeing to again. in still up a that's dynamics

the that's dynamic. So

we should our half but quarter on proteins. the the mostly third favorability second So see in still some in

Thomas Palmer

demand what in second got in of the pullback half versus Dymatize? of with ramp-up kind kind of planned initially? does kind in what a extent the how And with about out that we you've about limited then to And you're I this is it does like brands, on thing on marketing you quarters seem marketing, kind is some just if about of flexibility talked particularly between but I And marketing maybe back quarter. versus a think net a realize shift some talking there as robust strong. pull of on recent stock, you shift safety Premier one think very that are is seeing -- To demand Premier, we in running a

Darcy Davenport

Yes.

to QX Premier major -- add, campaign and to -- have then powder, to from and I'll but of move some dollars pivoted and year to this -- those you equity decided pull bottles Premier Dymatize. Paul. back to decided to 'XX, can start we We We both the

Tetra on of the but business our business, so of parts Premier as But being the we're other spending Dymatize. still side. kind of So just -- think on our but not of side the constrained

on Premier powder and spending definitely So bottles.

Paul Rode

And kind in mean for the Xs, We're that expand, just for low ballpark. to I year. X.X% yes, called X%, still of previously we

from Darcy little between a As expectation, our prior slightly pulled but modest bit toggled back said, have a change. it's and brands maybe -- from we

Operator

from Bank of comes question Spillane from Bryan next Our America. the of line

Bryan Spillane

a clarification, gross One, two. just half discussion So just back the year. of in around the the margins Paul, following

gross you up more they will be last little be versus to It similar, margins in then have third XQ correctly. little But and will XQ, less bit So want fourth a I I the maybe year was expansion. XQ won't a XQ roughly me make hearing that as better margin than much sure quarter? just because in the little promo a quarter sounded gross be like should to

Paul Rode

correct. Yes, you've got it

QX, quarter second -- the our you're in fourth, start see third where don't much And see QX half dynamics at more up the year's ought in from than that to similar margin. year step QX. to that's margin the be to a proteins protein favorability from perspective, in step ago perspective down as we gross So and they started correct pretty will a you last

but less why the that's favorable. So QX, favorability in is still

Bryan Spillane

talk the base it has. Darcy, sort All how penetration, what changing, of a little about bit kind is would be of -- consumer can just rather you if than And right. household then,

kids, guess, wide especially with versus Power, what they're this that, cohorts. narrow seeing definitely context drinking age male think, it. I base. it's I curious So young you I Core I'm female, and But expanding. And just, in a of, guess was just if are Initially, cohort, pretty the recruiting relatively more pretty age Fairlife a ask consumer I asking I'm is

kind widen I'm if specifically, to the So with of curious shake Premier you're right, consumer base. just beginning

Darcy Davenport

are. Not high is definitely kids mean We I brand. this protein. though, definitely adult it's

of -- these with business absolutely, the it Coke brand. we're like side, the that is So but both the our But ] an honestly growth and more of category [ we new driving ones side adult households. as

with in So such but we're of age just people, et in penetration a honestly, really like brand, bringing set a -- in low household gender, we're diverse and bringing we yes, cetera. are bringing younger

what's source know from this, I've kind to So all I really is for different Premier, people unique ability about to and volume of things. our guys talked looking about you ages,

why nutrition, than split adult side we but brands nutrition gender. is of is reason of range enter consumers from other of wide, more lose very, weight, many #X -- sports people the So very our and also actually actually volume even there. Premier pretty the a have business, to we out we range We source from --

just -- we're that brand magical So -- broad in the the it consumer can is what how is you that into brand. is consumers this see about bringing that and our

Operator

from comes Cowen. Robert question next from Our the Moskow of line TD

Robert Moskow

recovering that in and in be you remarks, TD higher start before think do are out-of-stocks in the stabilized. signs I expect think points to again? or is showing your most it periods, How will have of prepared said stabilization can next the you ramping TDPs recent should not? you soon Like few those weeks, higher we it get

Darcy Davenport

month. see every We'll improvement kind of Yes.

So we'll all-time get we'll see QX of throughout in then kind highs QX. to and back improvement

Robert Moskow

of very conduct Great. risk to And so, promos like follow-up. in a not? you Do the your Okay. in channel did does going or obviously that promotions the if These to of second demand half similar year? shock successful. are that your a competitors were And any quick think present you club then

Darcy Davenport

promotion club I most a from doing So mean promotion. already standpoint, competitors are

penetration, doing exception I they high the in club mean, successful I expect have always that but but low very in promotions, an a -- -- well. category. pretty both to -- there been for room they a channel. the But growth strong in been complementary. in situation there's single will that every supply go X we're we of to supply them good as channel, I back Fairlife And household a when is hasn't in So brands get specifically

Operator

of line Jefferies. Kaumil Gajrawala next from question comes the from Our

Kaumil Gajrawala

it of so able products linked to I where some store. of business still time, Well you out was and are increase the within pulling to about with Are display or other the store? a aisles. the done. shift feature moving parts bit being to the you the store placement, the them Can aisle places about the sort of and for And talk you of are quite think in number you

Darcy Davenport

have really So just stock within good the in to pharmacy. [ our focus right ] now is

We are, driver I said a us. as is earlier, display for huge

So we outside display still a think lot already Longer include are, pharmacy, within that mass of just so is see retailers so it could displays upside some the of there term, -- We do think of food getting kind we instance, of the pharmacy. placement. incremental incremental that just for in some retailers. as and

We so have a for and singles it's grab up in go. like the more cooler,

of aggressively we're after those kind So going opportunities.

answer brand store So we in to people, the the to to places absolutely we to be question, more of -- better. are your the more looking for can our introduce kind yes,

of and for store. through we I think just pharmacy aisles, change term, do a think base it's that eventually our there's then upside but that to ton more in throughout now, placement interesting business and getting section the the building display think we kind incremental the actually medium, of within longer

Kaumil Gajrawala

price Okay. linked kick to details why coming again. it's Because as where to Great. like is costs capacity going looks is just are? some it increase, And up through just maybe it on more on the

on the details any just more increase. process behind price thought So

Darcy Davenport

competitors taken have Sure. seen packaging, of co-man price. costs, Yes, many cost logistics, -- and in we've and our increases so actually,

took -- competitor are biggest we price QX. our in So

seeing costs. and this the Honestly, outside really is of dairy mainly, inputs. So kind rising entire because category it's -- of is

inputs as supposed are talked dairy rising to about, However, to, again. Paul also start

year, competition we the versus price our we with difference late it's QX. talked about in So feel And comfortable late think after the that price increase. in I

Operator

from Stephens. the Our next comes Salera Jim of question from line

James Salera

to did there from any those Just you in? they drill little what were down flex that wanted move stocks, stocks. placements any in? as bars have for would Do they I out competitor a you shelf mentioned there with color of helpful. on TDPs did a be sense the some out retailers Darcy, of bit the Do

Darcy Davenport

we So any -- space we space. what didn't know no is lose

was temporary. that And Jim, sporadic. knew be So going it we is they're where -- that it's honestly, to

have So of out a happens is for there a going then -- that XX-count. what so X-count we for period certain flavors, time

And the honestly, there retailers space, on holes are shelf the so occasionally. --

short not products about relatively in that and the is period on of broad is brand fill that is shelf kind the expand for So the the it's holes, the they the so it never of it's maybe that time, but entire idea to shelf. off a

James Salera

That's guess, to Okay. which helpful. isn't you up do then reach shelf, as in ability And typically my sale? if on I the do that, flavor follow-up a just have Or favorite that slots for see, is kind end example, just I then, chocolate, for to a X down? lost of does

Darcy Davenport

Yes.

on X-counts. because what -- we're capacity has the our describing constraints with is yes, especially forecasting You're most that, been because finding challenge -- there's for the part, biggest is there

consumers most to in to a the flavor. once a different Every -- while, a different they'll different of change a pack type. change to will just So time also

for not because not it instance. There's different chocolate available, go shifting be So chocolate, there. some X-count might to channel channel available so they they'll X is -- counts to a XX-count might go even

is the because and pack forecasting challenge between that sizes. accurately so there's So the of the much flavors interplay

time the most purchase the the next for they see on For flavor, the they once shop. within that will it's the times, to wait that if would brand. part, favorite and shelf there more back are they'll staying and then a it's I kind just has somebody if Every they cycle -- of minority say are

Operator

the Our comes question from Stifel. Smith of next Matt from line

Matthew Smith

Paul, I ask, follow-up wanted quarter to a question guidance. third about the

implied tougher the for the comparison of growth year revenue, phasing then the -- growth a it fourth second-half in tracking rates in fairly was the probably, half You even said to of it's second events year? talk of? have the of we promotional incremental large I can aware there for right? rest year-over-year the that that Do phasing be And activity of Are quarter. about the should you any with

Paul Rode

but Yes, the we fourth QX were light and quarter In to shakes you year. it's a nothing had QX pretty expect tracking it of promotion, year promotion that to on similar we in growth some we have promotion light quarter, ago. compared Xth the -- also -- be last correctly in some

So I promotional years. think overall, in there's between not a activity change dramatic the

Matthew Smith

for one I'll it year? after. increase of potential quarter. retailers expect for second Just through Or pass in Do to inventory half to current start the on persist year? were me, you more the levels with to Shipments consumption is exiting there that the and a follow-up their in line the

Paul Rode

-- anything Our half. not expecting bit expectation would shipments. will little towards dramatic second largely shipments of in is consumption swing the modestly that track a it It's we're but an load nothing and likely inventory

So as with trying as again, up we're the replenish shelves to demand. keep well

So shipments expect consumption a above second bit of the half. we in little

Operator

Our of the Matt Needham. question from from comes next McGinley line

Matthew McGinley

Dymatize that what you the quarter? that expect competitively? is something increased noted can is Or for this unique expand you saw to this You you persist? And was there something e-commerce that competition to quarter, on more

Darcy Davenport

is Yes, one. new this one a

So brands this really and more year, into marketing. the obviously, of brands, new year category. than the the promotion the ton marketing much you, the a enter very meaning leaning time because was into in QX, emerging doing But people and a new in always of deep smaller we so discounting most the see extreme increases new past, it's when more

and competitive, would highly much that's say, the very category. powder entire and So I

I so in Dymatize And what even actually -- but value, some seeking consumers what brands value, buying to -- for some but staying saw also upsizing. we that trading actually deal also then is down value -- buying only brands. referenced, We saw looking not on just

a a to value. for a from it So was instance, X-pound going XX-serve better because

-- in So deal do from to value continue? lot general, seeking. And a it just -- if expect continued shopping in we It April. of we

will QX. that think I we expect through it in general, continue So

the is commodities start promotion. into decrease, prices will again, going discounting are invest be the competitors that most believe Well big do for think I to part, category, so deep powder when money the because we there now commodities less that. that of -- question in increasing

Matthew McGinley

you difficult than third half. did chain the out I volatility in given in that quarter for back you've in tease the do a few expect follow-up one the sense. bit the more all Or revenue down? to generate That second? makes years. trend had seasonal does It's quick trends the step on supply revenue had to your little you past the the But

Paul Rode

it would sequentially. increase modestly second from the We expect to quarter

Operator

William comes of the question from Blair. Jon from next Andersen line Our

Jon Andersen

powder I the just question plans, but to terms shake of seeing was kind about up What is the Two It the Premier powder nicely would market in of quarter. give of out just be differently consumption balancing not may in Are and in equities bit additions? And 'XX update supporting capacity an you like balance on you in against your us for powders. XXXX. the 'XX, your quick the second is softer. there Dymatize you expectation looks on forward a Protein ones. then segment? have thinking those anything that hoping looking capacity your going very in up, was could was resources growth X

Darcy Davenport

So production first.

we So 'XX production, feel about increases. good production the

know back-end always And asking on just 'XX XX% loaded. production you increase. track was about I remember, -- that but So weren't for plus

that see 'XX. in to QX and 'XX, continue strong that into expected production and we continue into QX production. strong into When are will this QX of We saw will year. So go we a

So numbers, target end the do of -- 'XX. buffer production any needed inventory, our if by specific internal get we so to capacity high we plus support to of without -- rebuild enough to not plus levels have back production end the algo

really know I greenfield just facilities. the still ramp-up we are X good production about up our that scaling So feel

more And and so more every those important. start quarter becoming

that's So piece. one

and talking I powder. thing around been didn't value, when e-com beneficiary dynamic that. about was of The big of Premier I seeking the has one a Secondly, say consumers

think So Premier value. that while athletes super-premium much is brand mainstream powder a is a brand as good a being very kind Dymatize of of

of dynamic actually the one well we've so why reasons on. doing so is is the of because Premier going seen And

So really think ability will yes, RTD. it prepared said encouraged remarks, but the businesses. of we to the support powder the mainstream category, the continue Premier did brand I format. we much really coming from like And both in I answer And but can the from help category the Powder Powder, mean, for growth think on your Premier of XX% believe, my I question, we about very that with by diverting to outside to Dymatize to less we're it's that Premier support because increase we resources have

So we're with on really bullish powder. opportunity Premier the

Operator

line the comes for from John Securities. question Our of Mizuho next Baumgartner

John Baumgartner

even the guess, display for now, margin or growth takes How you cost seasonal with and maintaining? placement interest Darcy, outside the Maybe follows. the brand sustaining first in there that's wellness more more the of space I general also display shelf of off, retailer Does I the food and and on do phenomenon? How you up just just But that's for merch on health wanted interest Right aisle out guess, beverage mean longer I time? and over getting maybe over for term? to category aisle. follow outside is retailer think about stand this up? sets? contingent Is mostly go other higher definitely think greater, promo, into and a that Is you outside or the aisle merchandise. of conflict retailers overlap

Darcy Davenport

question. It's an interesting

single the tell can are one -- the in every trends you than growth category RTDs. this other it and they stronger category They from of store. health and retailers, And coming I see almost within see any So with that our is specifically the wellness. they conversations

low So category. household that the support. it's has penetration it has attention. know also They the It a

continue. So the growth should

it nutrition. So -- of space taking I less or for parts -- support Space convenient increasing. increasing and other less think and within from is business, the space borrowing seeing segments, the space but only is now, not the the think it's are it's for that categories, think around RTDs, our increasing from but really we're and is -- other conversations concern I overall about the Right there. retailer also other it's I

appear displays, but other it's the the about you're heard obviously, I've talking be more opportunity, So display never excited giving versus categories. the space to back competitive, if about and to very retailers margin as push

John Baumgartner

And marketing channels in to higher back drive engagement, and brands resources, is you purchases with and sales to But even there advantage mortar anything e-com you bricks emerging can awareness more a more factor. sampling over of and the do as the points? then the at physical pressure ingredients stronger converts big that e-commerce price then the in has Dymatize stressed I'm Dymatize curious there, in terms Okay. pricing and

Darcy Davenport

Yes.

quarter. a we a do. fair can Dymatize mean, learned last I there's lot I that think amount I think this

caught it on a but we how were little a that emerging e-com. off marketing weight. aggressive lot were little think of conservative the on And I these brands guard us we a campaign, a had

So was be. our needed share voice lower than to it of

campaign channels the not half, going e-com. more really We're with think on all just about being maybe to but we're really him be learning, excited be be McCaffrey to when timing supporting competitive. And thing out back into only assets marketing kind So can promotion to I at of that little able a across looking aggressive of signed just we going is Christian then campaign and to and also just there. we actually get when a a -- standpoint, from

So that's to going to celebrity that out. really and to able lean be push be his into exciting

it's is protein second Dymatize e-comm. -- brand So an amazing brand, whey on biggest

-- but I I can it to think in about that don't able nothing QX, to back a to write little business, back learning in we'll the great half get feel the So growth. bit we of be

Operator

of Bill the from Securities. Our line comes next Truist Chappell from question

William Chappell

seems just on -- have. a a Bryan's specific it male, are there's consumers. I say, category I for the not just time in if seems of penetration household -- the have to but way of or and X stage the a you should like in stuff Darcy, households that like terms is because then category, kind also that, be have X the just bigger question ask XX%, X to like in you, reason XX% like is that of new tough households being pretty it in metric revenue. I follow-up And And lot beverage rates, repeat X you now just household with a good low that know you to percentage cited of didn't is household would a maybe this penetration, at quantify might this penetration you even

you So of repeat like or metric. at you I'm you to mean? even the does that just trying quantify consumers penetration what quantifying Because Or category excited? rate helpful, get at seems do household new the us understand beyond Or household opportunity to be penetration? to would how least into kind better the look it how understand to do

Darcy Davenport

Okay.

So...

William Chappell

Sorry there in a was there. lot

Darcy Davenport

know. I great a question, No, It's Bill.

first of male, all, So female men okay, split. --

than Premier what's it's is pretty I a female. male again, little more So even unique think, about split, a

So between XX-XX, call XX-XX, female, but and split it, good male unique. is that

and hard the more brands, of and than men; diet because kind a the nutrition, of men the than have specific other in more for of out that. it's of defined Most brand the of get consumer, women brands category lane really, think you a So women. to

one really unique is So of that about Premier. that's the things

all, So first that hit of one. just

it. and rate, On look the the household so penetration I repeat at here's way

so First XX%, The of rate, RTD nutrition XX%. about overall the about we're repeat And XX%. it, right all, penetration, strong XX%. call category-leading around, category, about on household shake convenient

of a age, about same the market it when room. When relatively convenient household I same to that energy XX% new, that, to overall, -- which nutrition, but conflicting. look more category, #X about And at so lot like another and think there share mature speak, or go players of I is they're kind So I drinks. but are the XX%, the market is I as penetration relatively guess but #X share energy the bigger call is XX%. category, drink at so about

that to is really a okay, at is of and grow help, already X brand are we ton of look category. -- a coming a me the outside is I XX% as like, coming I'm our so haven't to that there of category. top new well both of knowing in lot here room grow, That So Does outside it's of started bringing and brands consumers, from room marketing. of the Bill? And and the the the ton category, from there as just growth that tells that

William Chappell

I'm from definitely. of is I keep probably and it think go just to -- is one the call Dymatize, that's going, other follow-up. powder brands? will could Yes, short, growth sorry, Premier affecting but yes, I Do the to Dymatize downs leading some trade or you mainly keep discounting

Darcy Davenport

They're There lot interaction. very is of a different consumers. not

of same again, between the Premier the RTD so of brands. like XX% category. the other both powder. definitely businesses coming beauty, from I Premier dynamics are on and Over growth said, outside And So

But So entering down. consumers switching it's category through Premier. actually, powder and trading are less the

Operator

concludes further time, At showing Thank conference questions. call. for today's This participating. you this I am no

may You now all disconnect.

BellRing Brands (BRBR) 7 May 242024 Q2 Earnings call transcript