BELLRING BRANDS, INC. Q1 FY2025 earnings call

• Fiscal '25 started well with net sales and adjusted EBITDA growing ~25% in Q1, driven by Premier Protein. - The Convenient Nutrition category grew 12% in Q1, with ready-to-drink up 18% and mainstream everyday/sports nutrition RTD up 31%. - Premier Protein saw consumption growth acceleration, distribution expansion, and launched a new national marketing campaign. It also launched an indulgent line of products and updated its logo/packaging. - Dymatize had international growth, launched new products and marketing campaigns with athletes, and remains bullish on the sports nutrition category.

Premier Protein: Net sales grew approximately 25% in Q1. Premier Shake consumption grew 23%, and Premier Protein powder consumption was up 24%. Premier Protein is the number one Convenient Nutrition brand with a 26% RTD market share. Dymatize: International business drove growth, with net sales increasing 13% this quarter. Dymatize holds the number two share position within sports nutrition powders, with international sales growing double-digit and offsetting domestic headwinds.

• Raised fiscal '25 net sales guidance to 13%-17% growth and adjusted EBITDA to 7%-14% growth. - Second quarter expected mid-to-high teens net sales growth led by Premier Protein, with Dymatize and others flat to down. Adjusted EBITDA margins to decline modestly in Q2 due to higher marketing spend.

• Protein cost inflation could impact margins. - Timing of marketing spend and packaging redesign could affect EBITDA margins. - Competitive landscape and potential supply chain issues if growth is too rapid.

Q: How would you characterize the growth levers this year and what's coming in stronger or more importantly?

A: Focus on demand driving, national advertising, distribution expansion, and innovation. This year is different from last as the organization is now focused on demand driving with ample capacity.

Q: What's the response to Premier's national campaign so far?

A: Early website traffic and online search are strong. Test markets met or exceeded lift expectations, and creative adjustments were made.

Q: How is Dymatize's international growth expected to play out this year?

A: International business will stay strong throughout the year, but the US business is pressured by commodity prices. The global brand is expected to have single-digit growth.

Q: What's the impact of cost inflation?

A: Mid-single digit cost inflation is expected, with first half being slightly more favorable and second half less favorable.

Q: How are you balancing the pace of packaging and innovation?

A: Balancing speed to avoid supply constraints. Packaging redesign will roll out in the second half, and marketing spend is being adjusted to maintain a sustainable pace.

Q: How are distribution gains being achieved?

A: Part from easing capacity constraints and part from increasing share of shelf and category space. Share of shelf is expected to increase as Premier is the number one brand in the category.

Q: Why was marketing spend shifted from Q1 to the second half?

A: Due to creative adjustments, the marketing spend was shifted by ~$4M from Q1 to the second half while keeping the overall spend level consistent with guidance.

Q: What's the impact of GLP-1s on BellRing Brands' growth?

A: GLP-1s represent ~25% of growth, with penetration plateauing but still acting as a tailwind for the category.