Bellring Brands (BRBR) 6 Aug 24 2024 Q3 Earnings call transcript
AInvestWednesday, Aug 7, 2024 7:07 pm ET
1min read
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In BellRing Brands' third quarter earnings call for fiscal year 2024, the company reported a strong performance with net sales growing 16% over the previous year and adjusted EBITDA up by 38%. The growth was driven by Premier Protein, which saw a 20% increase in net sales, outpacing its nearest competitor in the ready-to-drink category. The company's production also performed well, with the diversified co-man network delivering to plan and securing incremental capacity for Q4. This additional production will enable the company to fill remaining inventory gaps and rebuild internal inventories, setting them up for a strong fiscal 2025.

The company's focus on innovation and expansion was evident, with plans to increase investment behind Dymatize in the U.S. through both marketing and promotional campaigns. Despite challenges in the domestic market, Dymatize's international business continued to perform well, with net sales up 18% in the quarter. The company remains bullish on the mainstream powder potential, with two complementary brands, Premier Protein and Dymatize, leading the way.

Key Takeaways

1. Strong Performance: The company reported a strong quarter with net sales and adjusted EBITDA growth, driven by Premier Protein's success in the ready-to-drink category.2. Innovation and Expansion: BellRing Brands is focusing on innovation and expansion, with plans to increase investment behind Dymatize in the U.S. and explore new formats and packaging.3. Capacity and Production: The company's production capacity remains a key focus, with plans to secure additional capacity for Q4 to support demand and improve inventory levels.4. Competitive Landscape: The competition in the RTD category is intensifying, with newer entrants adopting bottles as an alternative to Tetra's dominant supply. BellRing Brands sees this as an opportunity for growth, particularly in the smaller bottle format.

Investor Questions

During the question-and-answer session, investors raised concerns about pricing and promotional strategies, particularly in light of increased competition and changing consumer preferences. The company's executives emphasized their strong brand loyalty and pricing power, and their focus on driving demand through targeted promotions and displays rather than deep discounting. They also highlighted the importance of maintaining adequate safety stock and inventory levels to mitigate the impact of timing changes in shipments and distribution.

Looking ahead, BellRing Brands is optimistic about the future, with plans to continue driving demand and expanding capacity to support growth. The company's focus on innovation and expansion, combined with its strong performance in the ready-to-drink category, positions it well for success in the evolving market.

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