BellRing Brands, Inc. Q2 FY2026 earnings call

• Second quarter results came in below expectations with challenging operating environment including negative sales mix, higher freight costs, and inventory related charge.
• Continuing to invest in promotion and advertising to defend share and support long-term growth.
• Distribution growth continued with double-digit TDP growth on track for 26, single-serve bottles driving trial.
• Advertising investment increased with new Go Get Em campaign showing early success.
• Launching new products in performance protein and refreshing protein spaces in fourth quarter, including Premier Protein Ultimate and Premier Protein Sparkling Soda.

Net sales increased 2% in the second quarter. Premier approached net sales in line and Dimeti sales down 2%. Premier RTD shake net sales increased 2.3%, with double-digit volume growth mostly offset by price mix declines. Premier powder and dimetized net sales were consistent with expected consumer elasticities following price increase. Consumption outside of club continues to be strong, up 15%, with the mass channel up high teens driven by distribution and incremental promotion.

Expect Q3 Premier state conception to be relatively flat with continued double digit growth outside of Club; Club challenged in Q3. Full year 26 net sales growth expected flat to up 2%, adjusted EBITDA margin outlook 14% inclusive of Q2 inventory related charge. Second half net sales growth expected 1%, adjusted EBITDA margins 15%. Third quarter net sales growth expected down approx 1%, margins approx 16%.

Increased competitive intensity, more pressured consumer, macro-driven cost headwinds, protein-driven commodity inflation running above expectations.

Q: Over the last couple of quarters, you've mentioned category shakeout, what gives confidence Premier Protein can be a leader?

A: Category is healthy with tailwinds, Premier largely holding share, has highest awareness, repeat, household penetration, trusted brand.

Q: View promotional environment as macro-driven and likely to normalize?

A: Macro-driven due to consumer affordability issue, believe transitory but current perfect storm of price sensitivity, competitive intensity, inflation.

Q: Follow-up on pricing power, what to monitor?

A: Pricing power shown historically, inflation including freight, whey protein, non-fat dry milk impacts, expect to pass through costs.

Q: Competitive landscape, challenges vs insurgent vs legacy brands?

A: 50% leading brands including Premier, 30-25% legacy brands, 10% insurgents, legacy brands donor, monitor insurgent innovation.

Q: Innovation unit economics and shelf presence?

A: Incremental on shelf, unit economics vary, some at par or lower margin initially but improve as grow.

Q: Category capacity perspective?

A: Capacity mixed, more available than before but insurgents need to scale, capacity challenge for many.

Q: 4Q promotional plans?

A: Similar to Q2, two club promotions, mass promotion mirroring Q2.

Q: Consumer buy rate decline, shift to unprocessed protein?

A: Didn't see significant outflow to unprocessed protein, continued household growth but buy rate declined.

Q: Harder to set price with influx of smaller players?

A: It's a big player, evaluating response to recent significant pricing, need to reevaluate given freight and protein increases.