Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BellRing Brands Inc (BRBR, Financial) reported a 20% growth in net sales and a 30% increase in adjusted EBITDA for fiscal 2024, exceeding their long-term growth algorithm.
- The ready-to-drink (RTD) shakes segment showed strong performance with a 21% sales growth, driven by organic growth and distribution gains.
- Premier Protein brand reached new highs in household penetration and market share, maintaining its position as the number one brand in the RTD segment.
- The company anticipates another strong year in fiscal 2025, with expected net sales growth between 12% and 16% and adjusted EBITDA growth between 5% and 11%.
- BellRing Brands Inc (BRBR) has a robust innovation pipeline, with plans to launch new product platforms in fiscal 2025, aiming to drive further growth and consumer engagement.
Negative Points
- The company faces input cost inflation, particularly in the powder business, which is expected to impact EBITDA growth in fiscal 2025.
- Dymatize brand experienced flat US consumption compared to the previous year due to softness in the specialty channel and tougher comparables.
- Marketing expenses are expected to significantly increase, impacting EBITDA margins, especially in the first half of fiscal 2025.
- The convenience channel, representing only 10% of the category, is not a primary focus for expansion, potentially limiting growth opportunities in that segment.
- BellRing Brands Inc (BRBR) anticipates a decline in adjusted EBITDA margins due to higher protein and other input costs, despite price increases in the Premier shakes.
Q & A Highlights
Q: What were the key takeaways from the trial runs for Premier Protein's increased marketing spend?
A: Darcy Davenport, President and CEO, mentioned that the in-market tests met or exceeded lift expectations, and creative testing showed areas for improvement. The existing creative performed well, and they plan to tweak it before launching the national campaign later in Q1.
Q: What is the expected increase in production capacity for fiscal '25, and are there plans to add new production lines?
A: Paul Rode, CFO, stated that production volumes are expected to increase in the mid- to high-teens. The current network can support growth into fiscal '26 to '27, delaying the need for additional lines.
Q: Why has the revenue growth outlook for 2025 increased to the higher end of the range?
A: Darcy Davenport explained that the full plan wasn't finalized in August, but as the planning process developed, more opportunities were identified, leading to increased optimism.
Q: How should we think about the marketing spend for fiscal '25 compared to the fourth quarter's 4.5% of sales?
A: Paul Rode indicated that fiscal '25 marketing spend will be less than 4.5% for the full year, with a bigger impact in the first half due to increased marketing activities, particularly for Premier Protein.
Q: What is the strategy for expanding in the convenience channel and single-serve opportunities?
A: Darcy Davenport noted that the convenience channel is a small part of the category, and the focus is on expanding distribution in existing channels. The single-serve opportunity is significant and will be pursued within current distribution channels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
