BRBR

It has been about a month since the last earnings report for BellRing Brands (BRBR). Shares have lost about 15% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is BellRing Brands due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for BellRing Brands Inc. before we dive into how investors and analysts have reacted as of late. BellRing Brands reported third-quarter fiscal 2026 results wherein earnings declined year over year and missed the Zacks Consensus Estimate. However, revenues increased year over year and came ahead of the consensus mark.The company posted adjusted earnings of 30 cents per share for the third quarter of fiscal 2026, down 45.5% from 55 cents in the prior-year quarter. The figure missed the Zacks Consensus Estimate of 37 cents.Net sales increased 4.2% to $570.4 million from $547.5 million in the year-ago quarter and exceeded the Zacks Consensus Estimate of $562 million. Higher Premier Protein shake volume, driven by distribution gains and robust Dymatize sales growth, supported revenues, while significant input cost inflation, including tariffs, higher freight expenses and inventory-related charges, weighed on profitability. Premier Protein net sales increased 0.7% year over year. Volume rose 1.5%, while price/mix declined 0.8%, reflecting incremental promotional investments. Premier Protein ready-to-drink (RTD) shake sales increased 1.2% from the prior-year quarter. Volume grew 3.1%, whereas price/mix declined 1.9%. Premier Protein RTD consumption increased 6% year over year. Premier Protein RTD consumption rose 50.9% in e-commerce, 26.1% in food and 10.1% in mass channels, while club consumption declined 7.6%. Dymatize net sales climbed 26.7% year over year. Volume increased 6%, while price/mix improved 20.7%, reflecting pricing actions implemented to offset inflationary costs and distribution gains in international markets. Dymatize consumption increased 2.7% from the year-ago period. By channel, e-commerce sales increased 18%, while mass sales declined 11.9%, specialty and all other sales fell 3.9%, food sales decreased 12.2%, and club sales dropped 53%. Adjusted gross profit declined 17.9% to $157.9 million from $192.4 million in the prior-year quarter. Adjusted gross margin contracted 740 basis points to 27.7% from 35.1%. The decline reflected significant input cost inflation, including tariffs, higher freight expenses and a $10 million charge related to excess shake bottle inventory. The inventory charge reduced adjusted gross margin by 180 basis points. Selling, general and administrative expenses declined 35.2% to $93.7 million from $144.5 million, including reorganization charges of $5.4 million. As a percentage of sales, SG&A improved to 16.4% from 26.4%.Adjusted EBITDA decreased 34.9% to $78.3 million from $120.3 million a year earlier. Management said that the excess shake bottle inventory charge and higher-than-expected freight costs were the primary reasons adjusted EBITDA came in below internal expectations. Operating profit increased 46% to $65.4 million from $44.8 million, as lower reported SG&A expenses more than offset the decline in gross profit. Cash and cash equivalents totaled $50.4 million as of June 30, 2026, compared with $71.8 million as of Sept. 30, 2025. Inventories increased to $480.6 million from $330.4 million, while long-term debt rose to $1,135.3 million from $1,084.3 million over the same period. Operating cash flow for the first nine months of fiscal 2026 declined to $65 million from $91.5 million in the comparable prior-year period. During the first nine months of fiscal 2026, BellRing repurchased 4.9 million shares for $133.1 million. As of June 30, 2026, the company had $506.9 million remaining under its existing share repurchase authorization. For the fourth quarter of fiscal 2026, BellRing expects net sales to be flat at the midpoint of its outlook. Premier is anticipated to post low-single-digit sales growth, including an approximate 100-basis-point headwind from powders. The company also projects double-digit growth in RTD shake volumes, with the benefit expected to be largely offset by weaker price/mix stemming from elevated promotional activity across the club, mass and e-commerce channels.BellRing forecasts an adjusted EBITDA margin of approximately 10% for the fourth quarter. The margin outlook reflects the impact of seasonal promotional spending, continued commodity and freight cost inflation ahead of planned pricing actions, as well as initiatives to reduce excess shake bottle inventory, which are expected to lower the quarterly adjusted EBITDA margin by roughly 100 basis points.For fiscal 2026, BellRing increased its net sales outlook to $2.335-$2.375 billion, representing 1-3% year-over-year growth compared with its earlier expectation of flat to 2% growth. Since the earnings release, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -41.34% due to these changes. Currently, BellRing Brands has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BellRing Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. BellRing Brands is part of the Zacks Food - Miscellaneous industry. Over the past month, Medifast (MED), a stock from the same industry, has gained 3.2%. The company reported its results for the quarter ended June 2026 more than a month ago. Medifast reported revenues of $76.38 million in the last reported quarter, representing a year-over-year change of -27.6%. EPS of -$0.28 for the same period compares with $0.04 a year ago. Medifast is expected to post a loss of $0.40 per share for the current quarter, representing a year-over-year change of -90.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +33.3%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Medifast. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BellRing Brands Inc. (BRBR) : Free Stock Analysis Report MEDIFAST INC (MED) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 2:00 p.m. ET Investor Relations - Jennifer Meyer President and Chief Executive Officer - Michael Axelrod Chief Financial Officer - Paul Rode Operator: Thank you for standing by, and welcome to BellRing Brands' Third Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Jennifer Meyer, Investor Relations for BellRing Brands. Please go ahead. Jennifer Meyer: Good morning, and thank you for joining us today for BellRing Brands' Third Quarter Fiscal 2026 Earnings Call. With me today are Mike Axelrod, our President and CEO; and Paul Rode, our CFO. Mike and Paul will begin with prepared remarks, and afterwards, we'll have a brief question-and-answer session. The press release and supplemental slide presentation that support these remarks are posted on our website in both the Investor Relations and the SEC Filings sections at bellring.com. In addition, the release and slides are available on the SEC's website. Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. As a reminder, this call is being recorded, and an audio replay will be available on our website. And finally, this call will discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued this morning and posted on our website. With that, I will turn the call over to Mike. Michael Axelrod: Thank you, Jennifer, and good morning, everyone. Thank you for joining our third quarter earnings call. I'm excited and honored to lead BellRing, and I'm grateful to the Board, the executive leadership team and colleagues across the company for the very warm welcome. As it's my seventh day at the company, I'll start the call with introductory remarks, and then pass it on to Paul to cover our third quarter performance and outlook for the remainder of fiscal 2026. I joined BellRing after 30 years in the consumer packaged goods industry across both entrepreneurial and large-scale businesses. Throughout my career, I've had the opportunity to grow businesses profitably by strengthening execution, improving operations and speed to market, and investing behind strong brands. What attracted me to BellRing was the combination of an attractive category with a long runway for growth, the market-leading Premier Protein brand, and a meaningful opportunity to improve execution. I built my career by putting the consumer first, building strong customer partnerships and creating value through disciplined execution, and I see many of these same opportunities here. Encouragingly, consumer demand for ready-to-drink protein shakes remains strong, and the category among the fastest growing in CPG. We continue to believe there is substantial runway for growth supported by long-term health and wellness trends. While competition has increased, that is exactly what you would expect in an attractive, growing category. Premier remains the category leader, consumer trends improved every quarter this year, and we continue to see considerable opportunities to better realize the full potential of the business. These category and brand strengths give me confidence that our current financial performance, which has been affected by some transitory factors, does not reflect the long-term potential of the business. As the categories become more dynamic and competitive, winning requires greater operational discipline, faster decision-making and new capabilities. While we've done many things well, we have not executed consistently at the level we expect ourselves, and we are not satisfied with our financial performance. As Paul will discuss, actions are already underway to put the business on a healthier footing, but I believe there's considerable more opportunity ahead. I believe in building winning teams that are highly accountable, customer-focused and data-driven. Over the coming months, I'll spend time listening to our employees, customers and partners, identifying opportunities to improve, and empowering our teams to make thoughtful decisions and drive accountability across the organization. There are certainly near-term challenges to work through, but I believe they are manageable, and I see meaningful opportunities to improve performance and better translate our category leadership into more consistent, profitable growth over time. In closing, I believe BellRing's top and bottom line growth opportunity remains compelling. My commitment is straightforward: move with urgency, execute with discipline and create long-term value for our shareholders. I look forward to speaking with you again on our fourth quarter earnings call to share more about my strategic priorities, operating plans to create long-term shareholder value and our 2027 guidance. I'll now turn it over to Paul to talk through the quarter and our updated outlook. Paul Rode: Thanks, Mike, and welcome to the BellRing team. Our third quarter net sales and consumption exceeded expectations with both Premier Protein and Dymatize contributing to the upside. However, adjusted EBITDA margins were below our guidance, reflecting inventory-related headwinds and higher freight costs. We expect these pressures to continue in the fourth quarter and have incorporated them into our revised guidance, which I will discuss shortly. We remain focused on our growth priorities, including innovation launching this quarter, and are encouraged by the resilience of Premier Protein's brand metrics despite a highly competitive environment. That said, we are not satisfied with our financial performance and are focused on restoring a stronger profit trajectory and delivering more consistent results as we look ahead to fiscal '27. To support that objective and the long-term growth of the business, we are taking decisive actions across pricing, channel mix, productivity and supply chain capabilities to bolster our operating model and address cost pressures. First, we have announced a double-digit price increase on Premier shakes and additional pricing on powders, both effective in our first quarter of fiscal 2027. We believe these actions are necessary to offset sustained inflationary pressure in key input costs and support a healthier margin profile over time. With this price increase, we expect volume-related elasticity to be slightly greater than 1. Second, we continue to take steps to diversify our business across channels, categories and adjacent product segments. In FDM and e-commerce channels, we expect meaningful distribution gains in '27, supported by strong retail demand for both core and innovation offerings. In convenience, we are advancing a disciplined expansion through targeted regional DSD expansion. We believe our core 30-gram protein shakes and our new Premier Protein Ultimate product, with 42 grams of protein, are well suited to the convenience channel and can drive incremental growth. We are also excited about the launch of Premier Protein Sparkling Soda, which expands us into the refreshment category and creates incremental distribution opportunities. Together, these initiatives are expected to broaden our consumer reach and further diversify our channel mix over time. In club, we currently expect our shake assortment next year to be generally consistent with this year, with one item representing a low single-digit sales percentage of this year's net sales expected to rotate out. We expect to retain a portion of that demand with our remaining flavors and continue to see opportunities to expand our club presence through innovation and new offerings that align with retailers' evolving assortment strategies. Third, we have completed several productivity initiatives, including this year's cost savings programs and our organizational realignment which we announced in late June. These actions are designed to simplify the business, reduce structural costs and improve execution discipline as we enter fiscal 2027, where we will continue to focus on cost savings. And finally, we are working to strengthen our planning capabilities and end-to-end supply chain processes to improve inventory management. These efforts are in the early stages and include investments across people, systems and processes to support more consistent supply chain performance going forward. We'll provide further updates on our 2027 initiatives on our fourth quarter earnings call. Overall, we expect to deliver improved margins over time, with progress beginning in fiscal 2027. I'll now turn to an update on the category, our 2026 operating plans, followed by our Q3 results and guidance. Starting with the category. As Mike mentioned, category fundamentals remain healthy with strong consumer demand for protein. We continue to expect fiscal year category growth in the high single digits, primarily driven by volume. Household penetration continues to grow for both the protein shake category and Premier shakes. Premier household penetration has reached almost 23%, with shake repeat rate consistently the highest in the category. In the third quarter, 70% of RTD shake category volumes were sold on price promotion. This is relatively in line with historical norms for this period after adjusting for the shift of a major e-commerce promotion, while down sequentially from the heavier promoted second quarter. While category fundamentals remain strong, our outlook assumes fourth quarter promotional levels will be more similar to the second quarter trends, reflecting continued value-seeking behavior and elevated promotional activity during the key Q2 and Q4 seasons. Over time, we continue to expect category-based price increases as a result of meaningful input cost inflation. Our demand drivers for fiscal '26 remain centered on: one, growing our distribution both in and out of aisle; two, increasing advertising investment while elevating its impact; and three, launching innovation that provides consumer excitement, advocation and drives trial. We remain on track to grow TDP double digits in fiscal 2026. Store activation improvements with our new broker and internal retail sales teams continue to drive meaningful FDM growth. Recall, Q2 and Q4 reflect our typical seasonal increase in promotional activity. Our fourth quarter will include a promotional event with a major mass retailer featuring displays and end caps which is similar to our second quarter event. In addition, we are repeating our Q4 club promotions with similar timing to last year. Our Q2 promotions delivered significant household gains, including many new-to-category consumers, and we look for further gains in Q4. With respect to advertising, we increased our investment this year and launched Premier's Go Get 'Em campaign, which is driving solid lifts in brand equity, awareness and traffic to our website and e-commerce product pages. Campaign ROI is stronger than last year, and our full year outlook continues to reflect advertising investment at approximately 4% of sales. Turning to innovation. As we've discussed previously, our demand study identified performance and refreshing protein as 2 of the most attractive and underserved areas in the category. Our Premier Protein 42-gram Ultimate Shake and Premier Protein Sparkling Soda expand our product portfolio and performance with high protein and refreshment, while creating new opportunities to reach consumers across additional occasions. Both products are rolling out to mass, food and e-commerce channels this quarter and will be supported by targeted retail and social media campaigns to drive awareness. Moving on to third quarter results. Net sales increased 4% in the third quarter, with both brands ahead of our expectations. Premier Protein brand and RTD shake net sales increased 1%. Shake volume grew 3%, partially offset by a 2% decline in price/mix, with dollar consumption up 6%. Sales growth trailed consumption primarily due to e-commerce promotional timing, a greater promotional impact on net sales and retail consumption, and modestly lower trade inventory. Regarding e-commerce, total consumption growth benefited by approximately 1 percentage point from a promotional timing shift to June compared to July in 2025. Excluding that benefit, consumption outside club grew approximately 16%. Compared to our expectations, shake sales and consumption both benefited from the early start of a small portion of a promotion at a major mass retailer and stronger baseline velocities. Dymatize net sales were up 27%, with volumes up 6%, and strong price/mix of 21% reflecting the inflation-driven price increases we implemented earlier this year. Compared to our expectations, Dymatize saw higher consumer demand primarily in e-commerce and international channels and benefited from distribution gains in overseas markets. Adjusted gross profit was $158 million, with adjusted gross margin of 27.7% compared to 35.1% a year ago. The year-over-year decline was driven by significant protein and freight cost inflation, including tariffs. Additionally, we recorded a charge in Q3 on excess bottled shake inventory. This inventory-related charge, which was a 180 basis point headwind, was the primary variance from our forecast with the remainder from higher-than-expected freight costs, which were offset by the benefit from higher sales. SG&A expenses were $94 million or 16.4% of sales, including a $7 million advertising increase or approximately 100 basis point increase as a percentage of sales. SG&A expenses also included a $5 million charge related to our organizational realignment, which was treated as an adjustment to EBITDA. Once complete, we expect this to generate an annualized run rate operating expense savings of $10 million to $12 million. The fourth quarter will benefit from modest savings, with the majority expected in fiscal 2027. Turning to our 2026 outlook. We now expect full year net sales of $2.335 billion to $2.375 billion, which represents growth of 1% to 3%, versus our prior guidance of flat to 2% growth. Adjusted EBITDA is expected to be $275 million to $295 million with a margin of approximately 12%. Our full year adjusted EBITDA outlook includes $28 million of unfavorable inventory-related impacts, $21 million of which have already been recorded in Q2 and Q3. The remainder primarily relates to targeted trade spend anticipated in our fourth quarter to support excess bottle inventory sell-through, reflecting a prudent decision to optimize those levels ahead of year-end. We continue to expect tariffs to be an 80 basis point margin headwind for the year. The change in our outlook versus our prior adjusted EBITDA guidance is primarily attributable to 2 items: inventory-related actions and higher freight costs. Freight rates have risen sharply since our May earnings call and are expected to remain elevated, incrementally weighing on second half margins by approximately 140 basis points. Turning to the fourth quarter. We expect net sales to be flat at the midpoint, with Premier up low single digits inclusive of an approximate 100 basis point headwind from powders. Similar to Q2, we expect double-digit volume growth for RTD shakes to be mostly offset by unfavorable price/mix from strong promotional activity in club, mass and e-commerce. We expect Premier shake consumption to be up mid-single digits, modestly outpacing sales due to the larger impact of promotions on our net sales. Dymatize and all other are expected to be down mid-single digits as Dymatize faces a tough fourth quarter comparison. Fourth quarter adjusted EBITDA margin is expected to be approximately 10%, reflecting our seasonal promotional activity during Q4 as well as significant commodity and freight inflation ahead of pricing. Additionally, bottle inventory related actions are expected to be a headwind of approximately 100 basis points to the adjusted EBITDA margin rate in the quarter. Now I'll make a few comments on cash flow and liquidity. In the third quarter, we generated $79 million in operating cash flow, in line with our expectations, and ended the quarter at net leverage of 3.2x. Recall that we anticipate payment of a sizable legal settlement in our Q4. As a result, we expect to end the fiscal year at net leverage of approximately 4x. In closing, our conviction in the long-term potential of our category and the Premier brand remains strong. Fiscal 2026 has been an unusually dynamic year with meaningful inflationary pressures and evolving category dynamics. Yet, Premier remains the category leader and we continue to see healthy consumer demand and strong brand fundamentals. We are taking actions to improve profitability while continuing to invest in the long-term growth of the business through advertising, distribution expansion and innovation. We believe the strength of the brand provides a solid foundation for stronger long-term financial performance and value creation. We look forward to sharing more about our plans on our fourth quarter earnings call. Before we open the line for questions, I'd like to thank Darcy Davenport for her many contributions to BellRing. Darcy has led this organization for over 10 years and was instrumental in taking the company public in 2019. Under her leadership, revenue has grown tenfold, with Premier Protein now a $2 billion brand and a category leader. As much as she loves the company and brands, it's the people and company culture that she loves the most. It's been a privilege to work alongside Darcy for the past decade, and we all wish her the very, very best in the future. I will now turn it over to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Andrew Lazar of Barclays. Andrew Lazar: Welcome, Michael. I realize you've obviously only just officially started, but the company is obviously in the midst of trying to address a number of challenges, all while facing tremendous cost pressure at the same time. So this makes it a bit more difficult to assess, I think, where sort of a trough in performance and profitability might be. As we think ahead to fiscal '27 and beyond, once the company is past these near-term inventory and freight costs, I guess, does the business also require more in terms of ongoing marketing support given where we are in the category competitive dynamic? And how do you view the company's ability to take pricing to deal with elevated costs while at the same time discounting to move inventory? So basically, I'm trying to get a sense of whether you see fiscal '26 as a trough, and where you think margins could ultimately settle and sort of how long the journey is to get there. Paul Rode: Andrew, I'll start and then Mike can chime in as he likes. So we do not see '26, obviously, as our new normal for our margins. In fact, we, as we said on our prepared remarks, we expect '27, our EBITDA margins will improve. And so I just want to go through a couple of the puts and takes. So first, we do have a number of inventory-related impacts that we called out on the call that we would not expect to recur. So that's about 120 basis point headwind to our '26 results that we would not expect to recur in '27. We also have a number of initiatives that we are taking to improve financial performance, pricing, productivity and improved execution. So we talked about on the call, we're taking pricing on our shake business, a double-digit price increase that goes into effect in the first quarter. We're also taking a third round of pricing on our Dymatize powder business that also goes into effect in the first quarter. I think you know we've been chasing pricing on powders really throughout the year. And then obviously, we've seen a lot more inflation in '26 than we anticipated on our shake business. And so this price increase is addressing those things. And then we talked -- we announced obviously the cost savings initiative, the reorganization. So that obviously will be a $10 million to $12 million benefit, with some offset as it relates to bonus. But it really comes back to pricing and some of the initiatives that we're taking to improve our margins as we move into '27. So we do think that '27 margins will improve from where we are in '26. Michael Axelrod: Yes, Andrew, I'm not, given my 7 days, ready to put a stake in the ground where it ultimately settles. But my focus over the next several months is really to understand the structural earnings power of the business, the execution issues, and really build a path to sustainable profitable growth. And as we gain confidence there, we'll communicate that transparently to you. Operator: Our next question comes from the line of Tom Palmer of JPMorgan. Thomas Palmer: I wanted to maybe clarify some of the pricing plans as we think about moving into fiscal '27 when it comes to shakes. To what extent does this fully offset input cost inflation? How have kind of discussions with retail partners gone? And do you expect others in the industry to take similar actions? Paul Rode: So I'll start with the last. So we have seen earlier this year, the other kind of major player in the RTD space did take a double-digit price increase. And so our increase is in line or is similar to what they took. So we do expect that there will be more. We've heard rumors there will be more. But we know we need to act. As far as is it covering our inflation, the last time we took a price increase on shakes was -- it will be coming up on 2 years ago. So we really have absorbed inflation really over the last couple of years. And so yes, we do expect that this increase will allow us to get back to healthier margins as well as continue to invest in the business. And then there was a third -- what was the third point? Thomas Palmer: Yes. Just communication with retailers, visibility. I'm trying to understand the elasticity piece, how much of that is factoring in any distribution effects? Paul Rode: Yes. So as always, with a price increase, retailers don't generally like it, but we're having good conversations with them and we're near finalizing our price increase. So yes. And as you mentioned, we are assuming elasticities greater than 1 from this price increase as we think about our next year. We also expect strong distribution gains, especially in FDM and e-commerce. We have a lot of innovation, obviously, that's launching this fourth quarter, and so that will obviously full year benefit next year as well. Operator: Our next question comes from the line of Alexia Howard of Bernstein. Alexia Howard: Welcome, Michael. You mentioned in the press release that strengthening execution was listed as the first meaningful opportunity on your agenda as you come into the company. Can you talk about where you see the biggest opportunities for improved execution and how long it will take to achieve those? Paul Rode: Were you referencing the quote from the earnings release, is that what you're referencing? Alexia Howard: That's right, yes. I think you mentioned it in the opening remarks as well, the strength -- the opportunity to improve execution. Paul Rode: Yes. I mean, I think it's on several fronts. So part of this, I think there's opportunities for us to improve execution around just as we've seen some inventory write-offs in this year. And so I think continuing to ensure that we're executing our supply plan, demand planning processes, there's opportunities for, I think, some system improvements, process improvements. And so those are some of the primary things that we're referencing. Obviously, Mike has just started, so he will have his own viewpoints, I think, on operations and potential opportunities as we move forward. Yes. Michael Axelrod: I view it in the context of really supply chain excellence. And so really working with our supply chain partners to really drive to the lowest-cost production and distribution, really optimizing that. I think there's a lot we can do on the procurement side and strengthening our procurement and really working with our co-mans to drive to the lowest cost possible. And also to be integrated within our supply chain, so we get in front of any inventory issues much sooner and are able to anticipate that and drive actions before it actually impacts us. Paul Rode: And the one thing I would add too is we did the reorganization in late June. And some of that was to reduce layers, which should speed up decision-making, get people closer to the decisions as well. So some of that is the decisions we made around the reorganization as well to enhance our -- to be more nimble and flexible as we move forward. Operator: Our next question comes from the line of Steve Powers of Deutsche Bank. Stephen Robert Powers: Welcome, Mike. I guess my question is on the targeted regional DSD expansion that you spoke to. I guess maybe just a little bit more detail on what the plans are, how much has already been ironed out in terms of distribution partners, et cetera. And really, I guess, what does success look like for you in that initiative over the next 12 to 24 months? How material could it be as a percentage of sales, incrementality, that kind of thing? Just how you're thinking about that initiative. Because it's been something we've been talking about for a long time, but just interesting that now is the time to kind of press go on it. So just how you're thinking about it would be great. Paul Rode: You're correct. We have been talking about DSD, and we have been focused on it and active on it. So let me just give some background and then dig into further your question. So first, convenience represents about -- it's a meaningful white space. It's a big opportunity for our business. We have very little sales in convenience today. Overall the convenience channel for RTDs is about 10% of the category. So that's a part of the category that we start playing in today. With the launch of our 42-gram Ultimate, that gives us another product in addition to our 30-gram so that we can push through the convenience channel. So that just -- as our portfolio has evolved, it's giving us greater flexibility to pursue the channel. We've been working through kind of a parallel path for a bit of looking at potential regional and national partners. And we remain focused on the opportunity. We're building internal capabilities. We've been hiring some folks with DSD expertise. So we're building our internal capabilities and our muscle and have made progress. So as we move into '27, we do see an opportunity to do some -- to have some partnerships with some regional players in some key markets at the start of the journey. So it's launching into those channels. We can learn quick -- apply learnings to the future expansion. But the thinking is, yes, there's kind of several phases of the rollout that would start sometime this year. So we would expect to see some sales start flowing in our fiscal '27 and then grow it from there. This doesn't preclude us from continuing to pursue a national opportunity. But we feel like this is a good place for us to start, and it's something we've been working on very hard. And we can provide further updates as we get into our November guide on where we are in that journey. We're still -- it's still being worked through. It's not -- still working through with our partners to set the course forward. Operator: Our next question comes from the line of Jim Salera of Stephens. James Salera: Paul, I wanted to ask on the dynamics around volumes sold on promo. You guys called out that 3Q is kind of more seasonally normal and a step-down from a heavier promo in 2Q. I wonder if you can give us some details around it. Is that due to presumably other people in the industry also experiencing the same freight headwinds and commodity cost increase, and so that's just kind of a de facto way to help take a little bit of price back relative to the promo level before, and we would expect to see promo step back up? Or do we think that maybe in 2Q, that was just a little irrational and we should expect, I'll say, a more normalized promotional cadence from the industry going forward? Paul Rode: Yes, it's a great question, and one we probably don't fully know the answer to. So I would say that, to your point, we saw a more rational or lower promotional quarter, which is typical for the third quarter. So I think what's hard to read is that -- and it's really in the second quarter we saw kind of a heavier spending really from our insurgent brands. I mean it was across the category, but it was the insurgent brands that really were spending more heavy in the second quarter, and really they pulled back significantly in the third quarter. So I think it's hard to read if that's them kind of following the category lead, so to speak, where you have kind of 2 big push periods in the year, the second quarter and the fourth quarter around New Year, New Year and back-to-school, or if it's the inflationary pressures that are starting to create some angst with them spending on demos and promotion spend as they had been. So I think time will tell which direction that goes. I think either of those are possible or it could be both. But for sure, that's what we saw in the third quarter, was promotional spend -- or the promotional -- yes, the percent of spend on promotion was certainly lower and back to more normal levels. Operator: Our next question comes from the line of Kaumil Gajrawala of Jefferies. Kaumil Gajrawala: Welcome, Michael. Looking forward to working with you. I guess as you were thinking about this job, as you were presenting to the Board to get this job, you're sort of looking at an industry that's no longer new, has no longer been discovered, certainly has tons of runway, but lots of folks are facing it. When you think about market cap creation as it relates to this industry going forward, what were some of the areas where you felt like BellRing has the right to win or maybe some of the specific things you feel like you can do or do differently to maybe get the shares or the equity value closer to where it was not that long ago? Michael Axelrod: Yes. So a little bit about my thought process in why joining BellRing. So Premier Protein is the #1 RTD protein brand and one of the most attractive and fastest-growing categories in CPG. There aren't many growing categories like this one. And I think that when you look and take a step back at the brand, it has exceptional consumer fundamentals. Household penetration also continues to go up. And it's only at 23%, so there's a lot of runway there. And most encouraging is it's got one of the highest repeat rates in the category. And so once you try a drink, you love it and you repeat it, which is very attractive. So for me, it was about the combination of a category that has that long, to your point, the long runway for growth and a brand that has already earned tremendous consumer loyalty. And I don't think BellRing is trying to create the demand. The demand is there. I think the opportunity is continuing to win through what I would call consumer-focused innovation, outstanding execution, in fact, world-class execution, and disciplined investment. So making sure we're investing in the highest-ROI opportunities. And across my career, I found that businesses with strong consumer fundamentals typically have many opportunities to drive profitable growth. And I see the same thing here at Premier and BellRing. Operator: Our next question comes from the line of Matt Smith with Stifel. Matthew Smith: Paul, I wanted to ask around the input cost outlook. Proteins remain elevated, but our projection suggests that they're stable but at higher levels. Are you able to take on a normal level of coverage into fiscal '27? And then on the freight side, have you started to see rates move lower, or are they just kind of sustained at higher levels? Kind of how do you see freight playing out in the fourth quarter and as you look ahead? Paul Rode: Yes. On freight, we saw freight rates really step up on us in the third quarter, and our expectation is that they remain at that high level in Q4. And it's really -- it's a combination of, obviously, the higher fuel costs, but there's also a supply-demand dynamic of drivers that got worse in kind of the third quarter and the fourth quarter. And so some of that, I think, will sustain. I think there's a part of freight that's transitory and I think there's a part of freight that could sustain for a bit. And so as we think about Q4 and really, as we think about our guidance versus last time, freight is a big headwind to our prior guidance. And I would expect freight to carry a bit into next year. And then after that, I mean, obviously, there's geopolitical and other factors at play there and macroeconomic factors with supply-demand on -- drivers that we'll see how freight plays out. On your comment on protein, protein costs, and I'm going to break them into 2 pieces. On whey protein, which is the input, which is our powder input cost, our expectation is that those rates remain elevated throughout next year. Perhaps we might start to see them come our way a little bit as we go through the second half. But supply-demand is still very tight on whey proteins. And so therefore, we expect those trends to largely continue. And then on milk proteins, milk protein costs, which we saw pretty high levels of -- on the nonfat dry milk component of the CME earlier this year. So that seems to have settled down to kind of more of a -- that settled down a bit since then, but it's still at a level that's above what we saw in fiscal '26. So we're still expecting inflation from our milk proteins and our shake business going into '27, so incremental inflation beyond where we are in '26. Right now, we'd say maybe inflation is in the mid-single-digit range at the moment, but obviously, that could change. As far as coverage, we're typically covered out 6 months or so. So we do have some coverage on our proteins in fiscal '27. And obviously, as we get to our guide in November, we'll have -- provide further clarity on where we are with protein costs and our coverage. Operator: Our next question comes from the line of Yasmine Deswandhy of Bank of America. Yasmine Deswandhy: Welcome. Mike. I just wanted to ask a question about the incremental price increases just across the category. So you announced double-digit price increase on Premier. And then I think there's a peer of yours that announced a high single-digit price increase effective around the same time. Are you expecting an uptick from the 70% RTD shake category volumes sold on price promotion following these price increases? And I guess just historically, when you've taken price at this level, does it normalize back down to the 70% average over time or does it stay sticky at that elevated level? Paul Rode: It stays pretty sticky at the elevated level. I mean, certainly, you would look at -- it gives you optionality to invest back either through promotion or advertising. I mentioned earlier that from a pricing perspective, obviously, the other largest brand in our category took pricing earlier this year. Obviously, we're announcing pricing now. Again, as you mentioned, there are some others that are pricing. So I do think that it's certainly possible that others could continue -- or could take further pricing. So as we look forward, I think time will tell if it increases the promotional activity, I guess, within the category. I mean we've seen pretty healthy levels of promotional spend in the last -- especially during the peak periods. And so will it elevate it from there? I don't know, but it may provide some optionality. But I do think there's true inflation that these increases are needing to offset. Operator: Our next question comes from the line of Robert Dickerson of BTIG. Robert Dickerson: Welcome, Michael. I guess just kind of a simple question, and maybe I just don't -- I didn't get it yet. But clearly, category is doing great. Your positioning still seems pretty strong, and consumption trends, as you're showing, we can see, seem pretty healthy too. So maybe if you could just kind of rightsize it pretty simplistically for me, kind of like why the excess inventory is already in place, right? Because it kind of seemed like if consumption is coming through and you're kind of making the right amount of product, then maybe you wouldn't have as much excess inventory and wouldn't be taking the write-downs. Again, I know, very simple, but just provide some color. Paul Rode: Yes. So the inventory-related actions are specific to our bottles business. So it's not tetras, it's bottles. And there's -- as with most things, there's a combination of things that occurred. One of which is we did introduce tetras in the e-commerce channel, which we expected some cannibalization of our bottles business, but it ended up being a bit more than we expected. And some of that is, I think, with the combination that you have the value-conscious consumer, so obviously, if they can get tetras cheaper, they -- that was something that we saw. So it ended up cannibalizing more than we thought. The demand team didn't lower demand fast enough. The supply team didn't pull down supply fast enough. And while we've been trying to work through it as best we could, in the third quarter, it became apparent that some of that was not going to get sold through in a timely fashion that we had planned for. So we ended up taking a reserve in the third quarter, $10 million. For perspective, that's 2% of inventory, but still $10 million. But it's 2% of our total inventory. And then our fourth quarter has an impact as well from the inventory actions because we're more heavily promoting some of our bottles to sell through as much of it as we can. So yes. So it's primarily bottles. We believe it should be at this point behind us. But it is certainly a headwind versus what we had previously guided. Operator: Our next question comes from the line of David Palmer of Evercore ISI. David Palmer: I'm just wondering if you could maybe give a sense of where you see the evolution of this space in ready-to-drink protein. We've seen some SKUs come and go at Costco and others. And we've seen new forms: canned product, higher protein, PET, milk-derived. Some people will say that some of those players have a great tasting product that might have made them a tough competitor. So maybe you could step back and just give a sense of where you see the competition today, how you're responding, where you might see disadvantages or advantages right now. Because I think people will wonder how you're thinking that your market share will shift going forward. Paul Rode: Yes. I think if you just step back and look at the category, the dynamics are pretty similar at the moment as they have been. So you have kind of the 2 big players that have about 50% of market share. They continue to lead. You have these insurgent brands that there's kind of 2 primary that appear to be sticking. They've gained some market share, and they're still lapping year-over-year market share gains. But over the last few months and quarters, they have started to kind of have pretty consistent market share versus seeing sharp growth. And then you have the legacy brands that are continuing to decline. And so a lot of the dynamics, kind of at a 50,000-foot level, aren't dramatically different as they have been. Now there's still a lot of churn. Trust me, there's -- you have, even within the club, you see brands coming in with different products or different flavors or -- so there's still a consistent churn in brands trying to make headway. But kind of as you pull back and look, the category dynamics, I would say, are largely still the same. We've talked in the past about ultrafiltered milk versus MPC. And I don't think, again, the dynamics have changed all that much there. There are some brands that use ultrafiltered milk that have done well, both insurgent and kind of the big players. And there's big players that are also strong with using MPC or milk proteins, and that's true for insurgent brands as well. So where the category goes from here, obviously, you're seeing innovation. We've got some innovation, obviously, some significant innovation in the fourth quarter. I think it will continue to evolve as we move from there. But I think, again, at the 50,000-foot level, it's continuing to evolve, it's dynamic, but it's also -- the dynamics haven't changed that dramatically in the quarter. Michael Axelrod: Yes. Just to build a little bit on Paul's remarks. I agree. I also think that given the increase in competition, that the importance of innovation is critical and the right innovation that steers the consumer to Premier. But also execution and operational excellence. And those are capabilities and muscles that we're building. But as we -- as the category evolves and, again, household penetration continues to go up, repeat rates are exceptional, consumers are loving protein. And so for me, it's making sure we've got the right innovation, outstanding execution and we operate with operational excellence with our partners both internally and externally. Operator: Our next question comes from the line of Jon Andersen of William Blair. Jon Andersen: Welcome, Michael. Just a quick one on innovation. You mentioned the importance of innovation and you have a couple of new products launching, I guess, this quarter in Ultimate and Sparkling Soda. What are the kind of the milestones that you'll be watching or the metrics that you'll be watching carefully on these 2 introductions? And how should we be kind of measuring success, in your mind? And then more broadly, is there any kind of bigger innovation areas, formulas, form factors that you might be exploring down the road? Paul Rode: Yes. So you're correct, we're very excited about the innovation that we're launching in the fourth quarter with the Sparkling Protein Soda and the 42-gram Ultimate. As far as what are we watching for, obviously, distribution is the first. And so we've gained some nice distribution in the fourth quarter, and we expect to gain some additional distribution in fiscal '27. We'll be watching, obviously, repeat rates. We'll be monitoring the media interactions, both on social media and some of the events that we have planned for that. So seeing how consumers respond. And then obviously, consumption. I mean, consumption, we'll be watching very carefully to see how those do. I mean these are intended -- Soda is intended for a different occasion. Ultimate obviously goes after kind of the athletes and a different consumer than the 30 gram. And so we'll continue to watch for those. As far as different innovation, those are the big ones. Obviously, that, we expect that to drive some significant growth in our fiscal '27. The team is working hard on additional innovation. There's nothing really we plan to talk about today on significant innovation. Obviously, we'll continue to have things like flavor extensions and those kinds of things. But we'll be in a better position as we get to November to talk further about innovation. Operator: Our next question comes from the line of Robert Moskow of TD Cowen. Robert Moskow: A couple of questions. In your prepared remarks, you talked about, in club, how one of your products will be rotating out and you're hoping to retain a portion of that demand. Is that a pallet that's coming out? And also you talk about retailers evolving assortment strategies. Can you give us more specifics as to how club retailers are evolving their assortment strategies? I think you've talked pretty specifically about what's changing in the past. And I want to know, are they expanding to more and more brands? Or are they doing something different now? Paul Rode: Yes. So to your first part of your question, yes, we did talk about that we -- while we expect our club shake assortment to be very similar, that we did expect to have one rotate out. And it's a specific -- it's one in-store pallet, so it's our lowest-performing flavor at one retailer. And so we expect that to happen in the fiscal first quarter. Regarding your second question, I would say that club retailers are constantly refining their assortments. They're constantly bringing -- they kind of have a base of the highest performers that tend to stick and then they are constantly churning through other types of products, other offerings. It could be similar offerings to what's already out there. It could be something completely different. And so that is not -- that's not really new. It's not a change as far as space. I don't -- we aren't seeing that the category space for club is necessarily changing from recent trends. Obviously, it's up from a year ago, but not from recent trends. And so I think from club, it's just consistently looking for what drives incrementality in their business, what can they do to maximize the productivity of each of their pallet positions. So I would not say that it's necessarily changed all that much. And back to our -- the one pallet that we are rotating out, we are going to continue to work closely with that club retailer to find additional distribution opportunities, be it innovation, regional rotations, flavor rotations. We've seen in the past that pallet positions can -- you can add them, you can subtract them, but you usually will have other opportunities down the road to deal with that. And so I think that's what we were calling out in our prepared remarks. Robert Moskow: Okay. And Paul, a follow-up question on the elasticity assumption. It's a little unclear to me what you're forecasting for elasticity. The math works out to be over negative 1.0. And I want to know if I'm overstating that with regard to the price increase you're taking. Paul Rode: So we said that we would expect elasticity to be greater than 1, fairly consistent with some of our past price increases. And obviously, we'll have a little bit of information when we get to our November guide as we may see some of that hit the shelf, so we could have some early reads. But those are our preliminary estimates at the moment. Operator: Thank you. That's all the time we have for questions today. This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in BellRing Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BellRing Brands wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. BellRing Brands (BRBR) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance in Q3 was characterized by strong top-line consumption that exceeded expectations, yet was offset by significant adjusted EBITDA margin pressure from inventory-related charges and rising freight costs. Management attributed the 180 basis point margin headwind to a $10 million charge on excess bottled shake inventory, driven by higher-than-expected cannibalization from the e-commerce tetra format and a failure to adjust supply plans quickly enough. The company is undergoing a strategic leadership transition and organizational realignment designed to reduce structural layers, accelerate decision-making, and improve execution discipline. Premier Protein maintains category leadership with household penetration reaching almost 23%, supported by the highest repeat rates in the category despite an increasingly competitive landscape. Operational challenges are being addressed through a focus on 'supply chain excellence,' including deeper integration with co-manufacturers and enhanced procurement capabilities to mitigate future inventory volatility. Market dynamics show a return to historical promotional norms in Q3 (70% of volumes on promo) following an unusually heavy Q2, though management remains cautious regarding value-seeking consumer behavior. Management announced a double-digit price increase for Premier shakes and additional pricing for Dymatize powders effective Q1 2027 to offset sustained inflation in milk and whey proteins. The fiscal 2027 strategy relies on a 'disciplined expansion' into the convenience channel through targeted regional DSD partnerships, leveraging the new 42-gram Ultimate shake and Sparkling Soda innovation. Guidance for fiscal 2026 was revised to reflect a 140 basis point headwind on second-half margins from sharply rising freight rates. and a total of $28 million in unfavorable inventory-related impacts. The company expects volume-related price elasticity to be slightly greater than 1 following the 2027 price increases, partially mitigated by expected double-digit distribution gains in fiscal 2026 and meaningful gains in FDM and e-commerce channels in fiscal 2027. Margin recovery is projected to begin in fiscal 2027, supported by the non-recurrence of 120 basis points of inventory headwinds and $10 million to $12 million in annualized savings from the recent reorganization. A $5 million charge was recorded in Q3 related to the organizational realignment, which was excluded from adjusted EBITDA to reflect the structural nature of the change. Net leverage is expected to spike to approximately 4x by the end of the fiscal year, driven by the anticipated payment of a sizable legal settlement in Q4. Tariffs are confirmed as a persistent 80 basis point margin headwind for the full fiscal year 2026. One low-performing shake flavor pallet is expected to rotate out of a major club retailer in Q1 2027, representing a low single-digit percentage of current net sales. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that fiscal 2026 margins are not the 'new normal' and identified 120 basis points of inventory headwinds that will not recur in 2027. The new CEO emphasized that the next several months will be spent determining the 'structural earnings power' of the business while building a path to sustainable growth. Management noted that a major peer took a similar double-digit increase earlier this year, providing a market precedent for their upcoming Q1 2027 price action. While retailers generally resist price hikes, BellRing is in the final stages of implementation and believes the move is necessary to restore healthy margins after two years of absorbing inflation. The excess inventory was specific to the bottles business and resulted from a combination of value-conscious consumers shifting to tetras and internal teams not lowering supply fast enough. Management characterized the $10 million reserve as representing only 2% of total inventory but acknowledged the need for better end-to-end supply chain visibility. The company is shifting from a national-only focus to a phased regional DSD approach starting in fiscal 2027 to capture the 10% of the RTD category currently in convenience stores. Success will be measured by distribution gains and the performance of the 42-gram Ultimate shake, which is well suited to the convenience channel and can drive incremental growth.

BellRing Brands, Inc. BRBR reported third-quarter fiscal 2026 results wherein earnings declined year over year and missed the Zacks Consensus Estimate. However, revenues increased year over year and came ahead of the consensus mark. The company posted adjusted earnings of 30 cents per share for the third quarter of fiscal 2026, down 45.5% from 55 cents in the prior-year quarter. The figure missed the Zacks Consensus Estimate of 37 cents. BellRing Brands Inc. price-consensus-eps-surprise-chart | BellRing Brands Inc. Quote Net sales increased 4.2% to $570.4 million from $547.5 million in the year-ago quarter and exceeded the Zacks Consensus Estimate of $562 million. Higher Premier Protein shake volume, driven by distribution gains and robust Dymatize sales growth, supported revenues, while significant input cost inflation, including tariffs, higher freight expenses and inventory-related charges, weighed on profitability. Premier Protein net sales increased 0.7% year over year. Volume rose 1.5%, while price/mix declined 0.8%, reflecting incremental promotional investments. Premier Protein ready-to-drink (RTD) shake sales increased 1.2% from the prior-year quarter. Volume grew 3.1%, whereas price/mix declined 1.9%. Premier Protein RTD consumption increased 6% year over year. Premier Protein RTD consumption rose 50.9% in e-commerce, 26.1% in food and 10.1% in mass channels, while club consumption declined 7.6%. Dymatize net sales climbed 26.7% year over year. Volume increased 6%, while price/mix improved 20.7%, reflecting pricing actions implemented to offset inflationary costs and distribution gains in international markets. Dymatize consumption increased 2.7% from the year-ago period. By channel, e-commerce sales increased 18%, while mass sales declined 11.9%, specialty and all other sales fell 3.9%, food sales decreased 12.2%, and club sales dropped 53%. Adjusted gross profit declined 17.9% to $157.9 million from $192.4 million in the prior-year quarter. Adjusted gross margin contracted 740 basis points to 27.7% from 35.1%. The decline reflected significant input cost inflation, including tariffs, higher freight expenses and a $10 million charge related to excess shake bottle inventory. The inventory charge reduced adjusted gross margin by 180 basis points. Selling, general and administrative expenses declined 35.2% to $93.7 million from $144.5 million, including reorganization charges of $5.4 million. As a percentage of sales, SG&A improved to 16.4% from 26.4%. Adjusted EBITDA decreased 34.9% to $78.3 million from $120.3 million a year earlier. Management said that the excess shake bottle inventory charge and higher-than-expected freight costs were the primary reasons adjusted EBITDA came in below internal expectations. Operating profit increased 46% to $65.4 million from $44.8 million, as lower reported SG&A expenses more than offset the decline in gross profit. Cash and cash equivalents totaled $50.4 million as of June 30, 2026, compared with $71.8 million as of Sept. 30, 2025. Inventories increased to $480.6 million from $330.4 million, while long-term debt rose to $1,135.3 million from $1,084.3 million over the same period. Operating cash flow for the first nine months of fiscal 2026 declined to $65 million from $91.5 million in the comparable prior-year period. During the first nine months of fiscal 2026, BellRing repurchased 4.9 million shares for $133.1 million. As of June 30, 2026, the company had $506.9 million remaining under its existing share repurchase authorization. For the fourth quarter of fiscal 2026, BellRing expects net sales to be flat at the midpoint of its outlook. Premier is anticipated to post low-single-digit sales growth, including an approximate 100-basis-point headwind from powders. The company also projects double-digit growth in RTD shake volumes, with the benefit expected to be largely offset by weaker price/mix stemming from elevated promotional activity across the club, mass and e-commerce channels. BellRing forecasts an adjusted EBITDA margin of approximately 10% for the fourth quarter. The margin outlook reflects the impact of seasonal promotional spending, continued commodity and freight cost inflation ahead of planned pricing actions, as well as initiatives to reduce excess shake bottle inventory, which are expected to lower the quarterly adjusted EBITDA margin by roughly 100 basis points. For fiscal 2026, BellRing increased its net sales outlook to $2.335-$2.375 billion, representing 1-3% year-over-year growth compared with its earlier expectation of flat to 2% growth. The company reaffirmed its adjusted EBITDA guidance of $275-$295 million and continues to expect an adjusted EBITDA margin of about 12%. The outlook reflects inventory-related headwinds, planned promotional spending in the fourth quarter to accelerate the sell-through of excess shake bottle inventory, ongoing tariff-related pressure and elevated freight costs expected to weigh on second-half margins. Shares of this Zacks Rank #3 (Hold) company have plunged 34.5% over the past six months compared with the industry’s decline of 1.7%. Image Source: Zacks Investment Research Some better-ranked stocks have been discussed below: Darling Ingredients Inc. DAR develops, produces, and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. DAR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for DAR’s current fiscal-year sales and earnings implies growth of 12.4% and 813.2%, respectively, from the year-ago actuals. DAR delivered a trailing four-quarter negative earnings surprise of 38.9%, on average. The Chef’s Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. CHEF currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings indicates growth of 10.8 and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average. US Foods Holding Corporation USFD, together with its subsidiaries, markets, sells and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. The Zacks Consensus Estimate for US Foods’ current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago actuals. USFD delivered a trailing four-quarter earnings surprise of 1.4%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BellRing Brands Inc. (BRBR) : Free Stock Analysis Report Darling Ingredients Inc. (DAR) : Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report US Foods Holding Corp. (USFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BellRing Brands (BRBR) came out with quarterly earnings of $0.3 per share, missing the Zacks Consensus Estimate of $0.37 per share. This compares to earnings of $0.55 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -18.92%. A quarter ago, it was expected that this nutritional supplements company would post earnings of $0.31 per share when it actually produced earnings of $0.14, delivering a surprise of -54.84%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. BellRing Brands, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $570.4 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.56%. This compares to year-ago revenues of $547.5 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. BellRing Brands shares have lost about 51.6% since the beginning of the year versus the S&P 500's gain of 11%. While BellRing Brands has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for BellRing Brands was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.36 on $658 million in revenues for the coming quarter and $1.24 on $2.35 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the bottom 15% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Flowers Foods (FLO), is yet to report results for the quarter ended June 2026. This bakery goods company is expected to post quarterly earnings of $0.23 per share in its upcoming report, which represents a year-over-year change of -23.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Flowers Foods' revenues are expected to be $1.23 billion, down 1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BellRing Brands Inc. (BRBR) : Free Stock Analysis Report Flowers Foods, Inc. (FLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BellRing Brands has lowered its forecast for a key earnings metric amid inventory and ingredient issues. The cut to the US company’s guidance for annual adjusted EBITDA was alongside a set of third-quarter results that included sales that were above market expectations. BellRing Brands now sees its adjusted EBITDA coming in at $275-295m for the year as a whole, compared to its previous forecast of $315-335m. The US protein-shakes and bars business said the new forecast includes $28m of “unfavourable inventory-related impacts”. BellRing said $21.3m was recorded in its second and third quarters. The amount included an $11.3m “inventory-related charge associated with a third-party supplied ingredient that did not meet BellRing’s quality requirements”, the company explained. It added the recovery of the charge had not been incorporated into its outlook. The group recorded a further $10m charge for “excess shake bottle inventory”. BellRing expects its adjusted EBITDA to be affected by around $7m in trade spending in the fourth quarter to “support sell-through of excess shake bottle inventory and optimise inventory levels ahead of fiscal year-end”. In the three months to the end of June, BellRing’s net sales grew 4% to $570.4m. Volumes increased 1.7% and the company noted a 2.5% rise in “price/mix”. The company is forecasting its annual net sales will grow 1-3% to $2.335-$2.375bn. Its previous estimate was an increase of 0-2% to $2.325-$2.365bn. BellRing said the “dollar consumption” of its Premier Protein RTD shakes during the third quarter increased 6% and its Dymatize powder and RTD products 2.7%. However, Premier Protein powder products decreased 4.2%. Third-quarter operating profit stood at $65.4m, compared to $44.8m a year earlier. Net earnings were $34.2m, versus $21m in the same period a year ago. William Blair analyst Jon Andersen said: "The quarter was noisy with sales above expectations and the fiscal year sales guide raised. However, EBITDA in the quarter were below and EBITDA guidance was lowered, although these appear to be related to transitory inventory charges and actions to optimise inventory levels by the end of the fiscal year.” "BellRing Brands cuts earnings forecast amid inventory issues" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

Interested in BellRing Brands Inc.? Here are five stocks we like better. Third-quarter sales rose 4%, led by better-than-expected performance from Premier Protein and a 27% increase in Dymatize sales, but adjusted gross margin fell to 27.7% from 35.1% due to protein and freight inflation, tariffs, and excess-inventory charges. BellRing lowered its fiscal 2026 profitability outlook, now projecting $275 million to $295 million in adjusted EBITDA and about a 12% margin. Inventory-related impacts, higher freight costs, tariffs, and expected fourth-quarter trade spending are weighing on results. To support future growth and margins, the company plans double-digit price increases on Premier Protein shakes and powders in fiscal 2027, alongside expanded distribution and new products such as Premier Protein Ultimate and Sparkling Soda. These 3 Stocks Offer Investors Exposure to the Functional Beverage Boom BellRing Brands (NYSE:BRBR) reported third-quarter fiscal 2026 net sales growth that exceeded its expectations, but lowered its profitability outlook as inventory-related charges and higher freight costs weighed on margins. Net sales increased 4% in the quarter, supported by better-than-expected performance from both the Premier Protein and Dymatize brands. Adjusted EBITDA margins, however, fell below the company’s guidance, prompting BellRing to revise its full-year outlook. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control These 4 Mid-Caps Just Announced Big Buyback Plans Mike Axelrod, who joined the company as president and CEO seven days before the call, said the ready-to-drink protein shake category retains favorable long-term fundamentals despite growing competition and recent execution challenges. “Premier remains the category leader,” Axelrod said. “Consumer trends improved every quarter this year, and we continue to see considerable opportunities to better realize the full potential of the business.” → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Trump Tax Reforms: 7 Stocks That Could Benefit in 2025 Premier Protein brand and ready-to-drink shake net sales rose 1% during the quarter. Shake volume increased 3%, while price and mix declined 2%, resulting in a 6% increase in dollar consumption. BellRing said sales growth trailed consumption because of e-commerce promotional timing, the greater effect of promotions on net sales than retail consumption, and modestly lower trade inventory. Excluding a roughly one-percentage-point benefit from an e-commerce promotional timing shift, consumption outside of club channels grew about 16%, according to the company. BellRing also cited an early start to a small portion of a promotion at a major mass retailer and stronger baseline velocities as sources of upside versus its expectations. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Dymatize net sales increased 27%, with volume up 6% and price and mix up 21%. CFO Paul Rode said the price-and-mix gain reflected inflation-driven price increases implemented earlier in the year. Consumer demand was particularly strong in e-commerce and international channels, while overseas distribution gains also supported the brand. Adjusted gross profit was $158 million, and adjusted gross margin declined to 27.7% from 35.1% a year earlier. The decline reflected protein and freight cost inflation, including tariffs, as well as a charge tied to excess bottle-shake inventory. The inventory charge represented a 180-basis-point headwind during the third quarter and was the main source of variance from BellRing’s forecast, Rode said. Higher-than-expected freight costs also pressured results, though higher sales partly offset the impact. SG&A expenses totaled $94 million, or 16.4% of sales, including a $7 million increase in advertising spending. BellRing also recorded a $5 million charge related to an organizational realignment announced in late June. The company expects the changes to produce annualized operating-expense savings of $10 million to $12 million once completed, with most of the benefit expected in fiscal 2027. BellRing now expects fiscal 2026 net sales of $2.335 billion to $2.375 billion, representing growth of 1% to 3%. Its previous guidance called for sales ranging from flat to up 2%. The company forecasts adjusted EBITDA of $275 million to $295 million, with an adjusted EBITDA margin of about 12%. The outlook includes $28 million in unfavorable inventory-related impacts, including $21 million already recorded in the second and third quarters. The remaining impact is primarily tied to targeted fourth-quarter trade spending intended to support sell-through of excess bottle inventory. Tariffs are expected to be an 80-basis-point margin headwind for the full year. Higher freight rates are expected to weigh on second-half margins by about 140 basis points versus the company’s prior outlook. Fourth-quarter net sales are expected to be flat at the midpoint of guidance. Fourth-quarter adjusted EBITDA margin is expected to be about 10%. For the fourth quarter, Premier sales are expected to rise by a low-single-digit percentage, including an approximately 100-basis-point headwind from powders. BellRing expects double-digit ready-to-drink shake volume growth to be mostly offset by unfavorable price mix caused by promotional activity in club, mass and e-commerce channels. Rode said the company expects Premier shake consumption to rise at a mid-single-digit rate in the fourth quarter, modestly ahead of sales because promotions have a larger effect on BellRing’s net sales. Dymatize and other sales are expected to decline by a mid-single-digit percentage against a difficult comparison period. To address sustained input-cost inflation, BellRing announced a double-digit price increase on Premier Protein shakes and additional pricing on powders, both effective in the first quarter of fiscal 2027. The company expects volume-related elasticities from the shake price increase to be slightly greater than one. Rode said the company’s last shake price increase was nearly two years ago and that the new action is intended to support healthier margins while allowing BellRing to continue investing in the business. He said another major ready-to-drink competitor previously implemented a double-digit increase. BellRing also plans to broaden its presence across channels. It expects meaningful distribution gains in food, drug and mass retail and e-commerce during fiscal 2027, supported by core products and innovation. In convenience, the company is pursuing targeted regional direct-store-delivery expansion and has hired personnel with DSD expertise. The company said its 30-gram protein shakes and newly introduced Premier Protein Ultimate product, containing 42 grams of protein, are suited for convenience retail. BellRing is also launching Premier Protein Sparkling Soda, which it said expands the brand into the refreshment category. Both Ultimate and Sparkling Soda are rolling out to mass, food and e-commerce channels during the fourth quarter. BellRing plans to monitor distribution, consumption, repeat rates and consumer response to advertising and social-media activity as it evaluates the launches. Rode said BellRing does not view fiscal 2026 margins as its “new normal” and expects adjusted EBITDA margins to improve in fiscal 2027. The company cited the absence of certain inventory-related charges, planned price increases, productivity programs and organizational savings as factors expected to support improvement. Axelrod said he is not yet prepared to set a long-term margin target. He said his initial priorities include assessing the business’s structural earnings power, identifying execution issues and building a path toward sustainable, profitable growth. BellRing generated $79 million in operating cash flow during the third quarter and ended the period with net leverage of 3.2 times. The company expects leverage of approximately four times at fiscal year-end due to an anticipated sizable legal-settlement payment in the fourth quarter. BellRing Brands, Inc is a consumer packaged goods company specializing in high‐protein, better‐for‐you nutrition products. Formed in March 2020 as a spin‐off from Post Holdings, the company focuses on delivering convenient protein solutions to health‐conscious consumers through a portfolio of well‐known and emerging brands. The company's product offerings include ready‐to‐drink protein shakes, protein powders, nutrition bars and other performance nutrition items. BellRing Brands' flagship brands include Premier Protein, a line of shakes and bars designed for everyday protein supplementation, as well as Dymatize and PowerBar, which cater to athletes and active individuals seeking advanced sports nutrition formulas. BellRing Brands markets its products primarily across North America, leveraging relationships with major retailers, wholesale clubs and e-commerce platforms to reach consumers in the United States and Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "BellRing Brands Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

ST. LOUIS, Aug. 04, 2026 (GLOBE NEWSWIRE) -- BellRing Brands, Inc. (NYSE:BRBR) (“BellRing”), a holding company operating in the global proactive wellness category, today reported results for the third fiscal quarter ended June 30, 2026. Highlights: Third quarter net sales of $570.4 million, up 4% year-over-year Operating profit of $65.4 million, net earnings of $34.2 million and Adjusted EBITDA* of $78.3 million, each of which included a pre-tax $10 million inventory-related charge Updated fiscal year 2026 net sales outlook of $2.335-$2.375 billion and Adjusted EBITDA* outlook of $275-$295 million, inclusive of full year pre-tax $28 million unfavorable impact of inventory-related actions *Adjusted EBITDA is a non-GAAP measure. For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” later in this release. BellRing provides Adjusted EBITDA guidance only on a non-GAAP basis and does not provide a reconciliation of its forward-looking Adjusted EBITDA non-GAAP guidance measure to the most directly comparable GAAP measure due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including the adjustments described under “Outlook” later in this release. “I am honored to lead BellRing into its next chapter of growth and value creation in a category with attractive long-term fundamentals,” said Michael Axelrod, President and Chief Executive Officer of BellRing, effective July 29, 2026. “Premier Protein is the clear leader in ready-to-drink shakes backed by a powerful brand and deep consumer loyalty. We have a strong foundation and meaningful opportunity to strengthen execution, reinforce our market leadership and deliver more consistent, profitable growth over time. As I begin meeting with our employees, customers and partners, I am energized by the talent across the organization and confident in our ability to create long-term value for shareholders.” “Our third quarter revenue exceeded our expectations, driven by strong performance from both Premier Protein and Dymatize,” said Paul Rode, Chief Financial Officer of BellRing. “While profitability was impacted by inventory-related charges and continued input cost pressures, the underlying demand trends for our brands remain healthy. Our updated fiscal 2026 outlook reflects these factors, and we are taking decisive actions through pricing, productivity initiatives and disciplined cost management to improve profitability while continuing to invest behind our brands to support long-term growth.” Third Quarter Consumption Trends Dollar consumption of Premier Protein ready-to-drink (“RTD”) shakes increased 6.0%, Premier Protein powder products decreased 4.2% and Dymatize powder and RTD products increased 2.7% in the 13-week period ended June 28, 2026, as compared to the same period in 2025 (inclusive of Circana United States (“U.S.”) Multi Outlet Plus with Convenience and management estimates of untracked channels). For additional information regarding consumption metrics, see the supplemental presentation on BellRing’s website, which can be accessed by visiting the Investor Relations section. Third Quarter Operating Results Net sales were $570.4 million, an increase of 4.2%, or $22.9 million, compared to the prior year period, driven by 1.7% increase in volume and 2.5% increase in price/mix. Premier Protein net sales increased 0.7%, driven by 1.5% increase in volume and 0.8% decrease in price/mix. Premier Protein RTD shake net sales increased 1.2%, driven by 3.1% increase in volume and 1.9% decrease in price/mix. Volume gains were driven by distribution gains. Price/mix was negatively impacted by incremental promotional investment. Dymatize net sales increased 26.7%, driven by 6.0% increase in volume and 20.7% increase in price/mix. Net sales benefited from higher average net selling prices in connection with inflation-driven price increases and international distribution gains. Gross profit was $163.3 million, or 28.6% of net sales, a decrease of $30.3 million, compared to $193.6 million, or 35.4% of net sales, in the prior year period. Adjusted gross profit* was $157.9 million, or 27.7% of net sales, a decrease of $34.5 million, compared to $192.4 million, or 35.1% of net sales in the prior year period. In the third quarter of 2026, gross profit and adjusted gross profit were impacted by significant input cost inflation (inclusive of tariffs) and higher freight. In addition, gross profit and adjusted gross profit were impacted by a $10.0 million charge for excess shake bottle inventory; this reflected a 180 unfavorable basis point impact to gross margin and adjusted gross margin. *Adjusted gross profit and adjusted gross profit margin are non-GAAP measures that exclude mark-to-market adjustments on commodity hedges. For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” later in this release. Selling, general and administrative (“SG&A”) expenses were $93.7 million, or 16.4% of net sales, a decrease of $50.8 million compared to $144.5 million, or 26.4% of net sales, in the prior year period. SG&A expenses included $5.4 million in reorganization charges in the third quarter of 2026 and a $68.1 million provision for legal matters in the third quarter of 2025, both of which were treated as adjustments for non-GAAP measures. Marketing and consumer advertising expenses were $23.1 million, an increase of $6.7 million compared to the prior year period, driven by increased Premier Protein spend. Operating profit was $65.4 million, an increase of $20.6 million, compared to $44.8 million in the prior year period with reduced SG&A expenses partly offset by lower gross profit. Interest expense, net was $19.9 million and $18.4 million in the third quarter of 2026 and 2025, respectively, with the increase primarily driven by higher outstanding borrowings under BellRing’s revolving credit facility. Income tax expense was $11.3 million in the third quarter of 2026 compared to $5.4 million in the third quarter of 2025. The effective income tax rate was 24.8% and 20.5% in the third quarter of 2026 and 2025, respectively, with the increase primarily attributable to discrete tax benefits recognized in the prior year period. Net earnings were $34.2 million, an increase of $13.2 million, compared to $21.0 million in the prior year period, and were impacted by the current year $10.0 million excess inventory charge. Net earnings per diluted common share were $0.29 compared to $0.16 in the prior year period. Adjusted net earnings* were $35.0 million, a decrease of $35.8 million, compared to $70.8 million in the prior year period. Adjusted diluted earnings per common share* were $0.30 compared to $0.55 in the prior year period. Adjusted EBITDA* was $78.3 million, a decrease of $42.0 million, compared to $120.3 million in the prior year period, and was impacted by the current year $10.0 million excess inventory charge. *Adjusted net earnings, Adjusted diluted earnings per common share and Adjusted EBITDA are non-GAAP measures. For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” later in this release. Nine Month Operating Results Net sales were $1,706.4 million, an increase of 2.3%, or $38.0 million, compared to the prior year period, driven by 4.7% increase in volume and 2.4% decrease in price/mix. Premier Protein net sales increased 0.4%, driven by 4.6% increase in volume and 4.2% decrease in price/mix. Premier Protein RTD shake net sales increased 0.5%, driven by 5.2% increase in volume and 4.7% decrease in price/mix. Dymatize net sales increased 13.7%, driven by 9.0% increase in volume and 4.7% increase in price/mix. Gross profit was $485.8 million, or 28.5% of net sales, a decrease of $97.2 million, compared to $583.0 million, or 34.9% of net sales, in the prior year period. Adjusted gross profit* was $454.7 million, or 26.6% of net sales, a decrease of $138.5 million, compared to $593.2 million, or 35.6% of net sales in the prior year period. In the nine months ended June 30, 2026, gross profit and adjusted gross profit were impacted by significant input cost inflation (inclusive of tariffs), unfavorable price/mix and higher freight. In addition, gross profit and adjusted gross profit were impacted by a $10.0 million charge for excess bottle inventory recorded in the third quarter and an $11.3 million inventory-related charge recorded in the second quarter associated with a third-party supplied ingredient that did not meet BellRing’s quality requirements (the combination of which represented an unfavorable 120 basis point impact to gross profit margin and adjusted gross profit margin.) *Adjusted gross profit and adjusted gross profit margin are non-GAAP measures that exclude mark-to-market adjustments on commodity hedges. For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” later in this release. SG&A expenses were $263.2 million, or 15.4% of net sales, a decrease of $51.9 million, compared to $315.1 million, or 18.9% of net sales, in the prior year period. SG&A expenses included $5.9 million in reorganization charges in the nine months ended June 30, 2026 and a $69.0 million provision for legal matters in the nine months ended June 30, 2025, both of which were treated as adjustments for non-GAAP measures. Marketing and consumer advertising expenses were $71.8 million, an increase of $12.7 million compared to the prior year period, driven by increased Premier Protein spend. Operating profit was $209.9 million, a decrease of $45.3 million, compared to $255.2 million in the prior year period driven by lower gross profit. Interest expense, net was $60.0 million and $49.3 million in the nine months ended June 30, 2026 and 2025, respectively, with the increase primarily driven by higher outstanding borrowings under BellRing’s revolving credit facility. Income tax expense was $38.1 million in the nine months ended June 30, 2026 compared to $49.3 million in the nine months ended June 30, 2025. The effective income tax rate was 25.4% and 23.9% in the nine months ended June 30, 2026 and 2025, respectively. Net earnings were $111.8 million, a decrease of $44.8 million, compared to $156.6 million in the prior year period, and were impacted by the current year $21.3 million inventory-related charges as described above. Net earnings per diluted common share were $0.95 compared to $1.21 in the prior year period. Adjusted net earnings* were $96.0 million, a decrease of $119.7 million, compared to $215.7 million in the prior year period. Adjusted diluted earnings per common share* were $0.81 compared to $1.66 in the prior year period. Adjusted EBITDA* was $222.4 million, a decrease of $141.8 million, compared to $364.2 million in the prior year period, and was impacted by the current year $21.3 million inventory-related charges as described above. *Adjusted net earnings, Adjusted diluted earnings per common share and Adjusted EBITDA are non-GAAP measures. For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” later in this release. Share Repurchases During the nine months ended June 30, 2026, BellRing repurchased 4.9 million shares for $133.1 million at an average price of $27.41 per share. As of June 30, 2026, BellRing had $506.9 million remaining under its share repurchase authorization. Outlook For fiscal year 2026, BellRing management has updated its previously issued guidance, as shown in the table below. Adjusted EBITDA outlook includes $28 million of unfavorable inventory-related impacts, of which $21.3 million were recorded in the second and third quarters, including an $11.3 million inventory-related charge associated with a third-party supplied ingredient that did not meet BellRing’s quality requirements (recovery of which has not been incorporated into this outlook) and a $10.0 million charge for excess shake bottle inventory. In addition, Adjusted EBITDA is expected to be unfavorably impacted by approximately $7 million in the fourth quarter, primarily from targeted trade spend to support sell-through of excess shake bottle inventory and optimize inventory levels ahead of fiscal year end. BellRing provides Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales guidance only on a non-GAAP basis and does not provide a reconciliation of its forward-looking Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales non-GAAP guidance measures to the most directly comparable GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for mark-to-market adjustments on commodity hedges, office relocation costs, executive transition costs and other charges reflected in BellRing’s reconciliation of historical numbers, the amounts of which, based on historical experience, could be significant. For additional information regarding BellRing’s non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures.” Use of Non-GAAP Measures BellRing uses certain non-GAAP measures in this release to supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures include Adjusted gross profit, Adjusted gross profit margin, Adjusted net earnings, Adjusted diluted earnings per common share, Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales. The reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is provided later in this release under “Explanation and Reconciliation of Non-GAAP Measures.” Management uses certain of these non-GAAP measures, including Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales, as key metrics in the evaluation of underlying company performance, in making financial, operating and planning decisions and, in part, in the determination of bonuses for its executive officers and employees. Additionally, BellRing is required to comply with certain covenants and limitations that are based on variations of EBITDA in its financing documents. Management believes the use of these non-GAAP measures provides increased transparency and assists investors in understanding the underlying operating performance of BellRing and in the analysis of ongoing operating trends. Non-GAAP measures are not prepared in accordance with GAAP, as they exclude certain items as described later in this release. These non-GAAP measures may not be comparable to similarly titled measures of other companies. For additional information regarding BellRing’s non-GAAP measures, see the related explanations provided under “Explanation and Reconciliation of Non-GAAP Measures” later in this release. Conference Call to Discuss Earnings Results and Outlook BellRing will host a conference call on Tuesday, August 4, 2026 at 8:30 a.m. ET to discuss financial results for the third quarter of fiscal year 2026 and fiscal year 2026 outlook and to respond to questions. Michael C. Axelrod, President and Chief Executive Officer, and Paul A. Rode, Chief Financial Officer, will participate in the call. Interested parties may join the conference call by registering in advance at the following link: BellRing Q3 2026 Earnings Conference Call. Upon registration, participants will receive a dial-in number and a unique passcode to access the conference call. Interested parties are invited to listen to the webcast of the conference call, which can be accessed by visiting the Investor Relations section of BellRing’s website at www.bellring.com. A slide presentation containing supplemental material will also be available at the same location on BellRing’s website. A webcast replay also will be available for a limited period on BellRing’s website in the Investor Relations section. Prospective Financial Information Prospective financial information is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the prospective financial information described above will not materialize or will vary significantly from actual results. For further discussion of some of the factors that may cause actual results to vary materially from the information provided above, see “Forward-Looking Statements” below. Accordingly, the prospective financial information provided above is only an estimate of what BellRing’s management believes is realizable as of the date of this release. It also should be recognized that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecasted. In light of the foregoing, the information should be viewed in context and undue reliance should not be placed upon it. Forward-Looking Statements Certain matters discussed in this release and on BellRing’s conference call are forward-looking statements, including BellRing’s net sales, Adjusted EBITDA, Adjusted EBITDA as a percentage of net sales and capital expenditures outlook for fiscal year 2026. These forward-looking statements are sometimes identified from the use of forward-looking words such as “believe,” “should,” “could,” “potential,” “continue,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,” “target,” “is likely,” “will,” “can,” “may” or “would” or the negative of these terms or similar expressions, and include all statements regarding future performance, earnings projections, events or developments. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. These risks and uncertainties include, but are not limited to, the following: BellRing’s dependence on sales from its RTD protein shakes; BellRing’s ability to continue to compete in its product categories and its ability to retain its market position and favorable perceptions of its brands; disruptions or inefficiencies in BellRing’s supply chain, including as a result of BellRing’s reliance on third-party suppliers or manufacturers for the manufacturing of many of its products, pandemics and other outbreaks of contagious diseases, labor shortages, fires and evacuations related thereto, changes in weather conditions, natural disasters, agricultural diseases and pests and other events beyond BellRing’s control; BellRing’s dependence on third-party contract manufacturers for the manufacture of most of its products, including one manufacturer for nearly half of its RTD protein shakes; the ability of BellRing’s third-party contract manufacturers to produce an amount of BellRing’s products that enables BellRing to meet customer and consumer demand for the products; BellRing’s reliance on a limited number of third-party suppliers to provide certain ingredients and packaging; significant volatility in the cost or availability of inputs to BellRing’s business (including freight, raw materials, packaging, energy, labor and other supplies), including as a result of tariffs or inflationary pressures; BellRing’s ability to anticipate and respond to changes in consumer and customer preferences and behaviors and introduce new products; BellRing’s ability to expand existing market penetration and enter into new markets; consolidation in BellRing’s distribution channels; the loss of, a significant reduction of purchases by or the bankruptcy of a major customer; legal and regulatory factors, such as compliance with existing laws and regulations, as well as new laws and regulations and changes to existing laws and regulations and interpretations thereof, affecting BellRing’s business, including current and future laws and regulations regarding food safety, advertising, labeling, tax matters and environmental matters; fluctuations in BellRing’s business due to changes in its promotional activities and seasonality; BellRing’s ability to maintain the net selling prices of its products and manage promotional activities with respect to its products; BellRing’s ability to obtain additional financing (including both secured and unsecured debt) and its ability to service its outstanding debt (including covenants that restrict the operation of its business); the ultimate impact litigation or other regulatory matters may have on BellRing; the accuracy of BellRing’s market data and attributes and related information; changes in critical accounting estimates; uncertain or unfavorable economic conditions that limit customer and consumer demand for BellRing’s products or increase its costs; risks related to BellRing’s ongoing relationship with Post Holdings, Inc. (“Post”) following BellRing’s separation from Post and Post’s distribution of BellRing stock to Post’s shareholders (“the Spin-off”), including BellRing’s obligations under various agreements with Post; conflicting interests or the appearance of conflicting interests resulting from certain of BellRing’s directors also serving as officers and/or directors of Post; risks related to the previously completed Spin-off; risks associated with BellRing’s international business; BellRing’s ability to protect its intellectual property and other assets and to continue to use third-party intellectual property subject to intellectual property licenses; costs, business disruptions and reputational damage associated with technology failures, cybersecurity incidents and corruption of BellRing’s data privacy protections; impairment in the carrying value of goodwill or other intangible assets or other long-lived assets; BellRing’s ability to identify, complete and integrate or otherwise effectively execute acquisitions or other strategic transactions and effectively manage its growth; BellRing’s ability to hire and retain talented personnel, employee absenteeism, labor strikes, work stoppages or unionization efforts; BellRing’s ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002; significant differences in BellRing’s actual operating results from any guidance BellRing may give regarding its performance; and other risks and uncertainties described in BellRing’s filings with the Securities and Exchange Commission. These forward-looking statements represent BellRing’s judgment as of the date of this release. BellRing disclaims, however, any intent or obligation to update these forward-looking statements. About BellRing Brands, Inc. BellRing Brands, Inc. (NYSE: BRBR) is a dynamic and fast-growing consumer brands business with the purpose of Changing Lives with Good Energy. Focused on growing the proactive wellness category, the company’s brands include Premier Protein, the #1 ready-to-drink protein and proactive wellness brand, and Dymatize, the brand behind the #1 hydrolyzed protein powder. A culture-driven, pure-play company, BellRing Brands believes nutrition is at the core of a healthy world and produces products with best-in-class nutritional profiles and exceptional flavors. Its products are distributed in over 90 countries across club, mass, food, eCommerce, specialty, drug and convenience. To learn more visit www.bellring.com. Contact:Investor RelationsJennifer [email protected](415) 814-9388 EXPLANATION AND RECONCILIATION OF NON-GAAP MEASURES BellRing uses certain non-GAAP measures in this release to supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures include Adjusted gross profit, Adjusted gross profit margin, Adjusted net earnings, Adjusted diluted earnings per common share, Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales. The reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is provided in the tables following this section. Non-GAAP measures are not prepared in accordance with GAAP, as they exclude certain items as described below. These non-GAAP measures may not be comparable to similarly titled measures of other companies. Adjusted gross profit and Adjusted gross profit marginBellRing believes Adjusted gross profit is useful to investors in evaluating BellRing’s underlying profitability of its revenue-generating activities as it excludes mark-to-market adjustments on commodity hedges (which are primarily non-cash and not consistent across periods; see the explanation below for more information). BellRing believes Adjusted gross profit margin (Adjusted gross profit as a percentage of net sales) is useful to investors in evaluating BellRing’s operating performance because it allows for more meaningful comparison of operating performance across periods. Adjusted net earnings and Adjusted diluted earnings per common shareBellRing believes Adjusted net earnings and Adjusted diluted earnings per common share are useful to investors in evaluating BellRing’s operating performance because they exclude items that affect the comparability of BellRing’s financial results and could potentially distort an understanding of the trends in business performance. Adjusted net earnings and Adjusted diluted earnings per common share are adjusted for the following items: Provision for legal matters: BellRing has excluded gains and losses recorded to recognize the anticipated or actual resolution of certain litigation as BellRing believes such gains and losses do not reflect expected ongoing future operating income and expenses and do not contribute to a meaningful evaluation of BellRing’s current operating performance or comparisons of BellRing’s operating performance to other periods. Mark-to-market adjustments on commodity hedges: BellRing has excluded the impact of mark-to-market adjustments on commodity hedges due to the inherent uncertainty and volatility associated with such amounts based on changes in assumptions with respect to fair value estimates. Additionally, these adjustments are primarily non-cash items and the amount and frequency of such adjustments are not consistent. Reorganization costs: BellRing has excluded certain one-time costs associated with internal reorganizations, as the amount and frequency of such adjustments are not consistent. Additionally, BellRing believes that these costs do not reflect expected ongoing future operating expenses and do not contribute to a meaningful evaluation of BellRing’s current operating performance or comparisons of BellRing’s operating performance to other periods. Office relocation costs: BellRing has excluded certain duplicative costs associated with new office moves as the amount and frequency of such expenses are not consistent. Additionally, BellRing believes that these costs do not reflect expected ongoing future operating expenses and do not contribute to a meaningful evaluation of BellRing’s current operating performance or comparisons of BellRing’s operating performance to other periods. Executive transition costs: BellRing has excluded certain advisory, hiring and other transition related costs associated with its Chief Executive Officer transition, as the amount and frequency of such expenses are not consistent. Additionally, BellRing believes that these costs do not reflect expected ongoing future operating expenses and do not contribute to a meaningful evaluation of BellRing’s current operating performance or comparisons of BellRing’s operating performance to other periods. Separation costs: BellRing has excluded certain expenses incurred to transition services to BellRing from Post prior to the expiration of the master services agreement with Post, as the amount and frequency of such expenses are not consistent. Additionally, BellRing believes that these costs do not reflect expected ongoing future operating expenses and do not contribute to a meaningful evaluation of BellRing’s current operating performance or comparisons of BellRing’s operating performance to other periods. Foreign currency gain/loss on intercompany loans: BellRing has excluded the impact of foreign currency fluctuations related to intercompany loans denominated in currencies other than the functional currency of the respective legal entity in evaluating BellRing’s performance to allow for more meaningful comparisons of performance to other periods. Income tax effect on adjustments: BellRing has included the income tax impact of the non-GAAP adjustments using a rate described in the applicable footnote of the reconciliation tables, as BellRing believes that its GAAP effective income tax rate as reported is not representative of the income tax expense impact of the adjustments. Adjusted EBITDA and Adjusted EBITDA as a percentage of net salesBellRing believes that Adjusted EBITDA is useful to investors in evaluating BellRing’s operating performance and liquidity because (i) BellRing believes it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, (ii) it presents a measure of corporate performance exclusive of BellRing’s capital structure and the method by which the assets were acquired and (iii) it is a financial indicator of a company’s ability to service its debt, as BellRing is required to comply with certain covenants and limitations that are based on variations of EBITDA in its financing documents. Management uses Adjusted EBITDA to provide forward-looking guidance and to forecast future results. BellRing believes that Adjusted EBITDA as a percentage of net sales is useful to investors in evaluating BellRing’s operating performance because it allows for more meaningful comparison of operating performance across periods. Adjusted EBITDA reflects adjustments for income tax expense, interest expense, net and depreciation and amortization, and the following adjustments discussed above: provision for legal matters, mark-to-market adjustments on commodity hedges, reorganization costs, office relocation costs, executive transition costs, separation costs and foreign currency gain/loss on intercompany loans. Additionally, Adjusted EBITDA reflects an adjustment for the following item: Stock-based compensation: BellRing’s compensation strategy includes the use of BellRing stock-based compensation to attract and retain executives and employees by aligning their long-term compensation interests with BellRing’s stockholders’ investment interests. BellRing’s director compensation strategy includes an election by any director who earns retainers in which the director may elect to defer compensation granted as a director to BellRing common stock, earning a match on the deferral, both of which are stock-settled upon the director’s retirement from the BellRing board of directors. BellRing has excluded stock-based compensation as stock-based compensation can vary significantly based on reasons such as the timing, size and nature of the awards granted and subjective assumptions which are unrelated to operational decisions and performance in any particular period and does not contribute to meaningful comparisons of BellRing’s operating performance to other periods.

This article first appeared on GuruFocus. Net Sales: Increased 4% in Q3 fiscal 2026, with both brands ahead of expectations. Premier Protein RTD Shake Net Sales: Increased 1%, with volume up 3% and price mix down 2%. Dymatize Net Sales: Increased 27%, with volumes up 6% and price mix up 21%. Adjusted Gross Profit: $158 million, with adjusted gross margin of 27.7% versus 35.1% a year ago. SG&A Expenses: $94 million, or 16.4% of sales, including a $7 million advertising increase. Adjusted EBITDA: Full-year outlook revised to $275 million to $295 million, with a margin of approximately 12%. Operating Cash Flow: $79 million generated in Q3. Net Leverage: Ended Q3 at 3.2 times, expected to be approximately 4 times at fiscal year-end. Full-Year Net Sales Guidance: $2.335 billion to $2.375 billion, representing growth of 1% to 3%. Warning! GuruFocus has detected 1 Warning Sign with BRBR. Is BRBR fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BellRing Brands Inc (NYSE:BRBR) reported Q3 net sales and consumption that exceeded expectations, with both Premier Protein and Dymatize contributing to the upside. Premier Protein's household penetration reached almost 23%, with the highest repeat rate in the category, indicating strong consumer loyalty and growth potential. The company is taking decisive actions to improve profitability, including a double-digit price increase on Premier Shakes and additional pricing on powders, effective in Q1 fiscal 2027. Innovation is a key growth driver, with the launch of Premier Protein Ultimate (42g protein) and Sparkling Soda, expanding into new occasions and channels. The company is executing a disciplined expansion into the convenience channel through targeted regional DSD partnerships, which represents a significant white-space opportunity. Dymatize net sales grew 27% in Q3, driven by strong price mix and distribution gains in international markets. The organizational realignment is expected to generate annualized operating expense savings of $10 million to $12 million, improving efficiency. Category fundamentals remain healthy, with high single-digit growth expected, driven by strong consumer demand for protein. The company is investing in advertising at approximately 4% of sales, with the 'Go Get Them' campaign driving solid lifts in brand equity and awareness. Management expects improved margins beginning in fiscal 2027, with progress from pricing, productivity, and supply chain improvements. Adjusted EBITDA margins were below guidance due to inventory-related headwinds and higher freight costs, with these pressures expected to continue in Q4. The company recorded a charge on excess bottle shake inventory, which was a 180 basis point headwind in Q3, and expects additional inventory-related impacts in Q4. Freight rates have risen sharply and are expected to remain elevated, incrementally weighing on second-half margins by approximately 140 basis points. The company is facing significant protein and freight cost inflation, including tariffs, which have pressured gross margins. Full-year adjusted EBITDA guidance was revised down, with margins expected to be approximately 12%, reflecting ongoing cost pressures. The company expects volume-related elasticities from the price increase to be slightly greater than one, which could impact volume growth. In the club channel, one shake item is expected to rotate out, representing a low single-digit sales percentage, with only partial demand retention expected. Net leverage is expected to increase to approximately 4 times by year-end due to a sizable legal settlement payment in Q4. The company is not satisfied with its financial performance and acknowledges inconsistent execution, which has affected results. Fourth quarter adjusted EBITDA margin is expected to be approximately 10%, reflecting seasonal promotional activity and continued cost inflation. Q: As we think ahead to fiscal '27 and beyond, once the company has passed these near-term inventory and trade costs, does the business also require more in terms of ongoing marketing support? How do you view the company's ability to take pricing to deal with elevated costs while at the same time discounting to move inventory? Do you see fiscal '26 as a trough and where do you think margins could ultimately settle?A: Paul Rode (CFO) stated that fiscal 2026 is not the new normal for margins, and they expect EBITDA margins to improve in fiscal 2027. He cited several non-recurring inventory-related headwinds (approximately 120 basis points) and initiatives to improve financial performance, including a double-digit price increase on Shakes and a third round of pricing on Dymatize powders, both effective in Q1 2027. The organizational realignment is expected to generate $10 million to $12 million in annualized savings. Mike Axelrod (CEO) added that his focus over the next several months is to understand the structural earning power of the business and build a path to sustainable, profitable growth. Q: To what extent does the double-digit price increase on Premier Shakes fully offset input cost inflation? How have discussions with retail partners gone, and do you expect others in the industry to take similar actions?A: Paul Rode (CFO) noted that a major competitor in the RTD space already took a double-digit price increase earlier this year, and their increase is in line with that. He confirmed the increase is necessary to offset inflation absorbed over the last two years and to get back to healthier margins. Regarding elasticity, the company expects volume-related elasticities to be slightly greater than one. They are having good conversations with retailers and expect strong distribution gains, especially in FDM and e-commerce, supported by new innovation launching in Q4. Q: You mentioned strengthening execution as a meaningful opportunity. Can you talk about where you see the biggest opportunities for improved execution and how long it will take to achieve those?A: Paul Rode (CFO) explained that opportunities exist around improving supply and demand planning processes, which contributed to inventory write-offs this year. Mike Axelrod (CEO) added that he views it in the context of supply chain excellence, focusing on driving the lowest cost production and distribution, strengthening procurement, and getting in front of inventory issues sooner. Paul Rode also noted that the organizational realignment announced in late June was designed to reduce layers, speed up decision-making, and make the company more nimble. Q: Can you provide more detail on the targeted regional DSD expansion plans? What does success look like over the next 12 to 24 months, and how material could it be as a percentage of sales?A: Paul Rode (CFO) explained that convenience represents a meaningful white space, as it is about 10% of the category but a channel they barely play in today. The launch of the 42-gram Ultimate product, alongside the 30-gram shake, gives them greater flexibility to pursue the channel. They have been building internal capabilities and hiring DSD expertise. As they move into fiscal 2027, they see an opportunity to partner with regional players in key markets as a start, expecting some sales to flow in fiscal 2027 and grow from there. This doesn't preclude pursuing a national opportunity later. Q: Can you give us details around the dynamics of volume sold on promotion? Is the lower promotional level in Q3 due to other industry players also experiencing freight and commodity cost increases, or should we expect a more normalized promotional cadence going forward?A: Paul Rode (CFO) said it's hard to fully know the answer. The lower promotional quarter in Q3 is typical for the season. In Q2, they saw heavier spending from insurgent brands, which pulled back significantly in Q3. It's unclear if this reflects those brands following the category's two big push periods (Q2 and Q4) or if inflationary pressures are causing them to reduce promo spend. Time will tell which direction it goes, but Q3 promotional spend was certainly lower and back to more normal levels. Q: When you think about market cap creation in this industry, what were some areas where you felt BellRing has the right to win or specific things you can do differently to get equity value closer to where it was?A: Mike Axelrod (CEO) stated that Premier Protein is the number one RTD protein brand in one of the most attractive and fastest-growing categories in CPG. Household penetration is only at 23%, providing significant runway, and the brand has one of the highest repeat rates in the category. He believes the opportunity is to win through consumer-focused innovation, world-class execution, and disciplined investment in the highest ROI opportunities. He sees many opportunities to drive profitable growth given the strong consumer fundamentals. Q: On input costs, are you able to take on a normal level of coverage into fiscal '27? On the freight side, have you started to see rates move lower or are they sustained at higher levels?A: Paul Rode (CFO) said freight rates stepped up in Q3 and are expected to remain at high levels in Q4 due to higher fuel costs and a supply-demand dynamic of drivers. He expects freight to carry into next year. On protein costs, whey protein (powder input) is expected to remain elevated throughout next year, though they might start to see some relief in the second half. Milk protein costs have settled down but remain above fiscal 2026 levels, so they still expect incremental inflation in the shake business going into 2027. They are typically covered out six months and have some coverage on proteins in fiscal 2027. Q: With the announced price increases across the category, are you expecting an uptick from the 70% RTD shake category volume sold on price promotion? Does it normalize back down to the 70% average over time or stay sticky at that elevated level?A: Paul Rode (CFO) stated that promotional levels stay pretty sticky at the elevated level. The price increase provides optionality to invest back either through promotion or advertising. He noted that the other largest brand in the category took pricing earlier this year, and others are pricing as well. While it's possible promotional activity could increase, the increases are needed to offset true inflation. Q: The category is doing great and consumption trends seem healthy. Why is the excess inventory already in place? If consumption is coming through, why wouldn't you be making the right amount of product?A: Paul Rode (CF For the complete transcript of the earnings call, please refer to the full earnings call transcript.