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

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Paul Rode: Yes, from an EBITDA perspective, we did bring at the bottom end of our range, that’s largely reflecting some of the margin favorability that we saw in the first quarter. And really specifically, we saw the production attainment fees of about $3.8 million in the first quarter that we did not include in our original guidance. And so that is certainly a big part of the reason for raising on EBITDA.

Darcy H. Davenport: And Kaumil, I would just say on just the guidance piece, strong start to the year, but it’s early. And we just want to see — we’re being a little more conservative. And I think we want to see another quarter before making any changes to our guidance.

Kaumil Gajrawala: Okay. Got it. And anything you’d like to add on spring shelf resets, just maybe with the outlook, I think by now maybe you would have a good sense on where you stand and how that lines up with your ability to supply?

Darcy H. Davenport: Yes, sure. So I’ll hit fall first. I think I talked about it a little last quarter, but I would say, overall, both Dymatize, so let’s just talk about product that we have supply, that ample supply. So powder is really good. So Dymatize, Premier powders, doing very well in actually both fall and spring resets. We’ve gotten store expansion. We’ve got new items in. I talked about in the prepared remarks around getting back club distribution on Dymatize, which was exciting, looking forward. And then on — and that actually applies to spring resets as well. When we’re talking about shakes and our focus is for spring is reintroducing our pos SKUs so the three flavors that will be coming back in really March, April.

So those — and actually, it’s more April, May for the spring reset. And it’s looking good. So most places, they’re excited to get our full line back, and we’re expecting to — everywhere where we’ve heard for spring, they’ve taken all the three items. So feeling pretty good about resets.

Operator: Alright, thank you. Our next question will come from Chris Growe with Stifel. Your line is open.

Christopher Growe: Thank you, good morning. I had a quick question for you, if I could. And just to understand, you mentioned having stronger production this quarter. Was that just a one quarter factor or you’ve seen that kind of continue through the year, I guess, ultimately, I’m just curious with your volume growth expectations for the year have changed if you’re seeing a stronger rate of production from your co-manufacturers?

Darcy H. Davenport: So yes, we had stronger production this quarter and I will say that we are lapping, kind of the worst of our capacity constraints last year. So we’re lapping a low number, but we did have strong — about 20% production growth. So we were very pleased with that. As far as our full year, we’re still expecting to be — we talked about low double-digit growth as having for production. And although I think we’re feeling better about that after getting the first quarter under our belt and hopeful we’ll over-deliver that. But right now, I think that it’s still a good number to go on.

Christopher Growe: And then related that, would you expect to ship ahead of consumption in the second quarter, again, if this were still an inventory rebuilding mode, is that right?

Paul Rode: I would expect to — I would expect shipment and consumption to be closer tracking in the second quarter. We may see a little bit of build as we get into the second half, as we start to relaunch some of the flavors, we may, we’d expect to see that shipments may be slightly ahead of consumption. But I think we’ll be a little bit more balanced as we go forward, as we close kind of the remaining gaps on shelf, we’ll ship a little bit ahead, but it should be a better balance as we go forward, I think.

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