BellRing Brands, Inc. (BRBR) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows mixed signals: positive product development and market strategy but challenges in financial performance and competitive pressures. The Q&A reveals optimism for future growth and innovation but highlights concerns about competition and promotional activities. Overall, the sentiment is balanced, with no strong catalysts for significant stock movement, leading to a neutral prediction.
Key Financial Performance
Total BellRing net sales $537 million, up 1% year-over-year. The increase was driven by a timing benefit from customer orders and some upside at Dymatize.
Adjusted EBITDA $90 million at a margin of 16.8%. This was ahead of guidance due to higher sales and SG&A leverage.
Premier Protein net sales Down 1% year-over-year. RTD shake net sales were down 2%, with flat volumes and a 2% unfavorable price/mix.
Dymatize net sales Increased 16% year-over-year, driven by strong international volume performance.
Gross profit $161 million with a gross profit margin of 29.9%. Adjusted gross margin declined 730 basis points due to mid-single-digit input cost inflation, unfavorable mix, and lapping of $5 million of nonrecurring cost favorability in the prior year.
SG&A expenses $78 million or 14.5% of sales, down from 15% of sales in the prior year quarter.
Net leverage Ended the quarter at 2.5x, with $97 million returned to shareholders through share repurchases.
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Operating Highlights
Premier Protein Coffee House line: Launched with flavors like Caramel Macchiato, targeting protein and energy needs with 30g of protein and caffeine equivalent to one cup of coffee. Early results show strong performance.
New shake lines: Two new shake lines to launch in the second half of the year, including a higher protein product and a line offering a different drinking experience.
Seasonal and flavor innovations: Winter Mint Chocolate and Strawberry Powder launched successfully, with more seasonal flavors planned.
RTD shake category growth: Expected high single-digit growth in 2026, driven by volume and increased marketing, shelf space, and affordability.
International growth: Dymatize net sales increased 16%, driven by strong international performance.
Advertising investment: Increased investment in advertising with the 'Go Get 'Em' campaign launched to drive household penetration and brand relevance.
Distribution expansion: Premier shake TDPs increased at strong double-digit rates in fiscal 2025, with similar expansion expected in 2026.
Cost management: Facing input cost inflation and tariffs, with adjusted EBITDA guidance reflecting these challenges.
Leadership transition: CEO Darcy Davenport announced retirement by September 30, 2026, with a national search for a successor underway.
Category redefinition: Shifted from 'convenient nutrition' to 'wellness,' increasing the U.S. category size to $24 billion from $21 billion.
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Risk or Challenges
Increased Promotional Activity by Competitors: The company has observed more frequent promotional events from insurgent brands than expected, which could impact Premier's consumption trends and market share.
Higher Whey Costs: The company is experiencing higher whey costs, which are impacting the powder business and contributing to a decline in adjusted gross margin.
Tariffs: Tariffs had an unfavorable impact of 75 basis points on gross margins in the quarter and are expected to have an 80 basis point impact on full-year gross margins.
Timing Delays in Promotional Displays: The timing delays in activating promotional displays at a mass retailer modestly impacted Premier's Q1 consumption growth.
Input Cost Inflation: Mid-single-digit input cost inflation is contributing to a decline in adjusted gross margin.
Competitive Dynamics: The success of the RTD shake category has attracted competition, leading to increased promotional spending by insurgent brands, which could cause near-term transitional impacts.
Leadership Transition: The planned retirement of the CEO by the end of fiscal year 2026 could create uncertainty during the leadership transition period.
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Guidance & Outlook
Net Sales Growth: The company has narrowed its fiscal year 2026 net sales growth guidance to between 4% and 6%.
Adjusted EBITDA Guidance: Updated adjusted EBITDA guidance is set at $425 million to $440 million, reflecting the updated sales outlook and higher whey costs impacting the powder business.
RTD Shake Category Growth: The RTD shake category is expected to grow in the high single digits for fiscal year 2026, primarily driven by volume.
Premier Protein Net Sales: Premier Protein net sales are expected to grow mid-single digits at the midpoint, supported by category tailwinds, distribution gains, innovation, and increased brand investment.
Dymatize Sales Outlook: Dymatize sales are expected to see modest growth, with additional pricing actions to offset whey protein inflation and anticipated elasticities impacting the second half of the year.
Advertising Investment: Advertising as a percentage of sales is expected to be approximately 4%, with the largest year-over-year dollar increases in Q2 and Q3.
Second Quarter Guidance: Net sales growth for Q2 is expected to be 3% to 4%, with similar growth for both Premier and Dymatize. Adjusted EBITDA margin for Q2 is expected to be approximately 13%.
Second Half Expectations: Significant sequential margin improvement is expected in the second half of the year, driven by accelerated sales growth, cost savings, a smaller sales mix from Dymatize, and higher SG&A leverage.
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Shareholder Return Plan
Share Repurchase: We continue to return cash to shareholders through share repurchases with $97 million repurchased in the first quarter.
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Key Q&A
Q:What are the results of the mass merchandiser test for Premier Protein and its impact on merchandising?
A:The program is performing very well, with record weekly sales on rollback items and January being the largest month ever at the retailer. The test has provided good learnings, and the company plans to expand it to other food, drug, and mass customers.
Q:Why was Premier Protein's consumption slightly below expectations in Q1, and what are the expectations for the rest of the year?
A:Premier Protein's consumption was down 2% in Q1 due to a timing delay in setting up a mass promo and increased frequency of events from insurgent brands. The company expects consumption to improve in Q2 and further in the second half of the year, driven by distribution, advertising, and innovation.
Q:What are the assumptions for Premier Protein's consumption growth in the back half of the year?
A:The company expects consumption to improve in Q2 and further in H2, driven by distribution and merchandising, advertising campaigns, and new product innovations. Advertising campaigns like 'Go Get 'Em' are expected to drive household penetration, and new product lines will contribute to growth.
Q:What is the status of smaller brands entering the club channel, and how is the competition evolving?
A:The company is seeing a shakeout among smaller brands in the club channel, with some brands not meeting high thresholds. The 10% market share held by insurgent and crossover brands is expected to remain, but the specific brands may change over time.
Q:What is the impact of promotional activities by challenger brands on Premier Protein?
A:Challenger brands are increasing the frequency of promotional events, especially in the club and mass channels. The company has conservatively embedded this higher frequency into its guidance and is closely monitoring consumer behavior.
Q:What is driving Dymatize's growth in international markets, and how is it performing domestically?
A:Dymatize is performing well internationally due to strong sales teams, distributor partnerships, and less intense competition. Domestically, the brand is holding share in a growing category but faces challenges from high whey pricing.
Q:What is the significance of expanding the category definition from convenient nutrition to wellness?
A:The category definition now includes new products like hydration powders, protein coffee, and protein sodas, increasing the category size by about 10%. This change reflects evolving consumer preferences and may influence M&A and innovation strategies.
Q:How is the mass retailer merchandising event performing, and are there plans for similar events?
A:The mass retailer merchandising event is meeting expectations after initial delays. The company is using the learnings to plan bigger promotions and expand similar events to other customers.
Q:What is the progress on singles and entry price point multipacks, and are there incremental costs?
A:Singles sales in January doubled compared to last year, indicating progress. The company is learning and improving execution. Incremental costs for merchandising are included in the guidance and are not significantly impacting profitability.
Q:How does the company view the current protein trend and competition?
A:The company sees the current protein trend as a land grab with some irrational behavior from insurgent brands. It expects heightened promotional activity to normalize as retailers consolidate around best-performing brands.
Q:What is the company's approach to M&A in the protein shake category?
A:The company is monitoring insurgent brands for potential M&A opportunities, focusing on those with strong consumer metrics and repeat rates. It is open to both organic and inorganic growth opportunities.
Q:What are the implications of new product innovations on capacity and distribution?
A:Some innovations will use existing co-manufacturers, while others will require new ones. The company has a strong operations function to manage start-ups and will use existing distribution channels for new products.
Q:How does the company ensure incrementality in its innovation strategy?
A:The company focuses on targeting incremental consumers and occasions. Innovations like Coffee House and indulgence products cater to different consumer needs and have distinct positions within the portfolio.
Q:Review of Unclear Management Responses
A:Management avoided providing specific data on consumer behavior after promotions roll off, referring to it as 'bump and stick' internally but lacking detailed insights. Additionally, they were vague about the details of new product lines and their potential impact on margins.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
BellRing CEO
BellRing Directors
Brands potential
CEO BellRing
CEO advance
CEO role
Caf Latte
Coffee House
Em campaign
Premier consumption
Today
ability
aisle
balance
bottle
campaign household
category RTD
club Premier
definition
dynamic
energy
event
format
foundation
future
gym
insurgent brand
life
location
place
plan
product protein
protein level
repeat rate
saving
spending
strategy
track
transition
trial
wellness category
BRBR Transcript
BellRing Brands, Inc. (BRBR) Q1 2026 Earnings Call Transcript
Unknown2-3
The earnings call summary shows mixed signals: positive product development and market strategy but challenges in financial performance and competitive pressures. The Q&A reveals optimism for future growth and innovation but highlights concerns about competition and promotional activities. Overall, the sentiment is balanced, with no strong catalysts for significant stock movement, leading to a neutral prediction.
BellRing Brands, Inc. (BRBR) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript
Neutral12-2
BellRing Brands, Inc. (BRBR) Q4 2025 Earnings Call Transcript
Positive11-18
The earnings call summary indicates strong revenue expectations and healthy margins despite some anticipated cost pressures. The company is the market leader in a growing category with strategic investments in innovation and distribution. Although there are concerns about tariffs and inflation, the overall sentiment is positive with strong market positioning and growth potential.
BellRing Brands, Inc. (BRBR) Q3 2025 Earnings Call Transcript
Positive8-5
The earnings call summary reflects a positive sentiment overall, with strong financial performance, product launches, and a robust shareholder return plan. Despite some uncertainties in Q&A about fiscal '26, management's confidence in long-term growth and strategic market positioning is evident. The share repurchase program and optimistic guidance for fiscal '25, coupled with a strategic focus on innovation and market expansion, are likely to drive a positive stock price reaction over the next two weeks.
BRBR Slides
BellRing Q1 2026 slides highlight wellness category expansion amid mixed channel growth2026-02-03
BellRing Q4 FY2025 slides: Premier Protein drives growth despite profit concerns2025-11-18
BellRing Brands Q2 FY2025 slides: Premier Protein hits record market share amid strong growth2025-08-04
BellRing Brands Q2 2025 slides: Premier Protein drives double-digit growth2025-05-05
BRBR Report
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