3. BellRing Brands, Inc. (NYSE:BRBR)
Number of Hedge Fund Holders: 43
BellRing Brands, Inc. (NYSE:BRBR) is a consumer product holding company that provides ready-to-drink (RTD) protein shakes, powders, nutrition bars, and other RTD beverages. Its primary brands are Dymatize and Premier Protein. BellRing Brands, Inc. (NYSE:BRBR) operates through protein-based consumer goods.
The company’s net sales for fiscal Q4 2024 increased by 18% over the prior year, reaching $556 million. Its Premier Protein brand is increasingly resonating with its target audience, resulting in a 20% net sales growth that was primarily attributed to strong volume growth for both powders and RTD shakes. Its RTD shake sales also increased by 21%, boosted by distribution gains and organic growth. The overall consumption for October increased by 28%. This growth was attributed to the company’s Pumpkin Spice fall seasonal flavor, which resonated greatly with consumers.
The primary drivers of volume growth for the company’s Premier Protein brand include increased organic growth and promotional activities, expanded pack sizes and formats, distribution gains on existing and new products, and innovation. BellRing Brands, Inc.’s (NYSE:BRBR) Dymatize brand also drove growth. Net sales for the Dymatize international business segment grew by 30% in fiscal Q4 2024, delivering growth for the quarter. The company also introduced a new national marketing campaign for the brand with San Francisco All-Pro running back Christian McCaffrey, which was launched on November 14 during NFL Thursday night football. In addition to advertising, BellRing Brands, Inc. (NYSE:BRBR) is launching its new product platforms in the first half of fiscal year 2025.
Wasatch Core Growth Fund stated the following regarding BellRing Brands, Inc. (NYSE:BRBR) in its fourth quarter 2023 investor letter:
“BellRing Brands, Inc. (NYSE:BRBR)) was also a significant contributor. BellRing’s offerings include nutritional shakes, powders, bars, and other products primarily marketed under the Premier Protein and Dymatize brands. We like the company’s asset-light operating model, which relies on outsourced production. Given the low cost of BellRing’s products and perceived value among a loyal and growing group of health-conscious consumers, we believe the company has a durable, economically resilient business. Moreover, we think the intellectual property associated with BellRing’s shelf-stable, good-tasting products is relatively difficult for competitors to replicate. Amid the fallout from the Covid-19 pandemic, the company’s production capacity had been severely constrained, impacting revenues and earnings. In 2023, BellRing was able to add new outsourced production facilities—and even more will be added in 2024. Finally, the company and the stock benefited from the proliferation of GLP-1 agonists, such as Ozempic, being used for weight loss. Dieters often consume BellRing’s products in an effort to ingest enough nutrients. That said, the GLP-1 trend wasn’t part of our original investment thesis and isn’t why we continue to own the stock.”
