BellRing Brands, Inc. (NYSE:BRBR) Q1 2023 Earnings Call Transcript

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Pamela Kaufman: Hi, good morning. So given that the production capacity is improving better than you expected, can you talk about any changes in your advertising or promotion plans, is that driving any change in your plans for the year there? And I guess, how are you thinking about the further recovery in TDPs over the course of the year, can they approach 2021 levels given improving supply?

Darcy H. Davenport: So promotion and marketing. We are fairly consistent with what we communicated before. So our plan is just to remind you, we will — we are doing some market — we’re coming back with marketing, as Paul said, in Q2 around non — mostly non-Shake items. So we’re actually marketing more of our Dymatize as well as Premier Protein powder, basically any product that we have ample supply on. We’ll come back towards the end of kind of back half marketing our shakes. So we’ll start getting back into marketing there. And that was really always the plan. From a promotion standpoint, again, consistent with what we talked about before, we’re looking at light promotion but not until Q4. So that’s the kind of answers the promotion and marketing fees.

On TDPs, we are seeing and I assume you’re talking about TDPs on shakes, we are seeing some slight improvements this quarter, and that’s really having to do with just better in-stocks. We’ll continue to see that through next quarter with the reintroduction of our SKUs which will hit in Q3. We’ll start seeing, again, some bump up of TDPs but it’s not going to be dramatic. We’re waiting on resets to happen, and that will happen in the kind of late spring, which really is Q3 for us and then into Q4. As far as 2021 levels, honestly, I think that it’s going to take, I would say, Q4, Q1, probably Q1 of 2024 to really get back to 2021 levels, but we’ll be consecutively improving every single quarter, I think.

Pamela Kaufman: Great, thank you. And then just on Dymatize, can you elaborate on what’s impacted the performance this quarter and how you’re thinking about Dymatize growth over the rest of the year?

Paul Rode: Sure. There were two items that were headwinds to the quarter. The first is we did see some shipments pull — we have some shipments into especially international that was stronger in Q4 that de-loaded in the first quarter. So that was about 15% of the 25% headwind and then we were lapping discontinued products, which we’ve called out over the last couple of quarters as a headwind that we will see continue into the second quarter. So those are the two primary items if you pull out that, those two combined were about a 25% headwind that gets you closer to the consumption growth, which was up 30%. So we really feel like it’s — the brand is doing well from a consumption perspective. So we really want FDM and e-commerce, we’re just — we just have some shipment timing items and the decision we made last year and just got items that are weighing it down.

Darcy H. Davenport: Yes, I would just encourage everybody to focus on the consumption for Dymatize. The business is super healthy and shipments can be a little lumpy in that business because international and specialty represent about 50% of the business and those ordering patterns can really — you can get three big orders one quarter and then one the next. So really, focusing on consumption is the best barometer of the health of the business, and we’ve been consistently seeing double-digit growth.

Pamela Kaufman: Thank you.

Operator: Thank you. Our next question will come from Kaumil Gajrawala from Credit Suisse. Your line is open.

Kaumil Gajrawala: Hi, first, just let me ask you if your revenues came in quite nicely ahead of expectations. But you only brought up your guidance on the EBITDA side. So is there anything maybe timing related that we should be aware of as it relates to revenues?

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