BellRing Brands (BRBR) 7 Feb 232023 Q1 Earnings call transcript

Welcome to the BellRing Brands First Quarter 2023 Earnings Conference Call and Webcast. Hosting the call today from BellRing Brands are Darcy Davenport, President and Chief Executive Officer; and Paul Rode, Chief Financial Officer.

Today’s call is being recorded and will be available for replay beginning at 12:00 P.M. Eastern Time. The dial-in number is 800-695-0671 and no pass code is required. participants placed all mode. a time, this have in been listen-only At introductions. is turn Relations Meyer, for to my of floor Brands It pleasure Jennifer the now over to BellRing Investor Ma’am, please begin.

with and supplemental prepared fiscal website afterwards joining Good and release for first session. Paul With our will Darcy thank The and remarks a these today for have in Investor President Relations and our question-and-answer presentation begin XXXX remarks, in morning our us and filings CFO. brief call. earnings Darcy slide are CEO; you BellRing today Brands are Davenport, me the quarter and Paul will we BellRing.com. the on support that SEC press posted of sections Rode, both

available are on slides and the website. release the addition, SEC’s In

to by that uncertainties management would results as call the and subject Before update undertakes this contain which current as call considered I and could no these date to materially forward-looking forward-looking these risks of of we carefully investors continue, remind this be you to statements. statements, obligation These statements. are from statements actual are differ should like that will

a recorded audio will And and available is call replay non-GAAP website. reminder, will finally, on an our discuss call this be this certain As being measures.

to non-GAAP For that, With website. GAAP measure, the a I issued the Darcy. to posted will these reconciliation our over on see call yesterday of nearest measures our and press turn release

higher fiscal you EBITDA grew sales protein Net off shake quarter am to slightly a that our thank of I XXXX joining and our we expected into and first prior ahead better presentation translated that productions, Overall our net start came results in to coming XX%. at shipments. with to year expectations. with XX% than stronger Jennifer sales Thanks premier was supplemental our Last over in results quarter adjusted is share first good pleased all posted for us. evening, and reported website.

from are benefited that returned EBITDA particularly we In COGS momentum volumes addition, favorability. to growth grow. premier starting its encouraged adjusted protein and am to see QX I in

As and major affirmed will of we raised we release to you range. expect quarter. communicated don’t the fiscal net low-end sales of last our cadence provide more saw in XXXX adjusted We yesterday’s changes outlook EBITDA press a our details. Paul

start optimal production. retailers in own this growth to saw of our lost inventory. as levels. constraints. worst shake inventory still as at improved, Let’s with are increase as our This We significant well at our but quarter growth Both the not production modestly allowed capacity we us increase have

our fully Over we few at until most the levels, internal months, expect we of recover XXXX. next inventory our expect to normal customers while early will don't be

with state XXXX. capacity expansion production expected in to on annual plans Our digits double fiscal are low grow track

with QX. scale co-manufacturer continues Our each month up to throughout new bottle improving production

fiscal XXXX. new co-manufacturers with their are coming late Our the to that realized for with QX co-man two facilities three plan. in be we step benefit comes until online online. fully tracking in not in production Recall, XXXX up greenfield will small Consequently, have dedicated our a QX

setting for in to expected up of incremental XX%, many capacity Our north XXXX growth. of shake is be robust years us

RTD general, increases household Before Ready-to-drink constraints our supplemental that of our to and with insights. prior provide remained communication the in quarter. continued QX, consumption across deeper, but business despite and us was accelerating detail reviewing competitive these compared up and changes category our share strong, are better in ready-to-mix changed sources capacity brand greater up XX% sources growing Both XX% up turn, in XX%. The set. to penetrations. updates, in for segments well have want coverage new better outlined [ph] price category we as and tracked are as presentation I in These

the strength. growth driving at of rates a as across is grew solid this club greater by accounts. brand trend slower-than-anticipated category last top their than returned XX% consumption mass, continued quarter. This E-commerce XX% was macro channel we with Protein The strong, consumers up bottle Protein growth It the with Premier club. consumption quarter new for co-man scale to showing Sports consumption growth food, highlighted growth January goals. to remarkable continues pursue more is exception. segment was with only The runway XX%. The a momentum and huge that growth. the through up as especially fitness Nutrition hindered show our

at performing for driving key in and Market activities. gains small with share reflecting shelf. brand despite in Protein SKUs the velocities XX% channels. lead long all inventory year on our past growth. Our metrics reduced shakes third reaffirm experienced runway top TDPs sequential Premier for the track has SKUs demand more quarter, this sustained a stabilized in limited

slowdown, loyalty penetration quarter, and a pullback softened marketing. this in As our household has as penetration buy the in and are of Premier highest household has we still steady, the repeat our and high-value buyers. Protein holding discussed last the Despite result rate flavors, promotion, category, demonstrating our of intentional rates

XX% flavors, tracked national we and ever vanilla top in rank launched see our Consumption this and but distribution. in We exciting we in marketing. our January. prior household portfolio. the light quarter gaining Protein a chocolate are are currently promotion two portfolio top year three part restart year, shake expect The marketing campaign rapidly powders brand currently expand to -- XX% Protein up sales first was penetration our growing Premier full a and in Premier flavors and It's and Powders small have to as reintroduce formats. light versus channels. the successfully rebound later of

channels. driven dollars saw another and consumption tracked the Dymatize, all momentum to We into across quarter January Impressively, brand key with up with XX% up Turning untracked and promotion. in great by consumption pricing, double-digit gains, strong growth had distribution accelerated XX%. the channels

are to Dymatize's expansion report you we channels, with regained brand already happy to market share distribution rates and I'm TDPs repeat with temporarily X.X% club new and highs mainstream in lost As accounts holding share, versus this QX add may in well. continues we households the the late the market year. buy a customer that performing key remember, is in ended propelling year distribution and consumption at quarter. reaching steady. up Dymatize tracked quarter rates a with significantly ago. all-time ACV We last

progress In supply shake capacity competitive closing, making moats. diversify we deepen are expansion in our significant our grow our to and and

tailwinds. accelerate above mid-single-digit category rates with macro Our historic strong trend high-growth continues to growth

are We and promotions. to range and Protein Premier flavors full marketing of our shake re-introducing close restarting

XXXX Paul. our outlook remain quarter. our Lastly, we call support. will have I and a forward in robust and growth confident to BellRing your sharing now next We that you will for look help over the fuel long-term Thank progress beyond. innovation the to of pipeline continued turn in

good everyone. Thanks, morning, Darcy and

As off a was sales $XX start. prior million. over Darcy year XX% of EBITDA with to Net for is XXXX highlighted, sales quarter the adjusted good adjusted margins XX% and XX.X%. EBITDA EBITDA Net grew were adjusted increased and million fiscal $XXX strong

optimal continuing growth brand to due outpaced to to and increased ago tailwinds. quarter Protein to grew levels. Volumes XX%. RTD consumption as seasonality XX% a average inventories prices with the Premier in shake back category grew compared X%, well sales contributed selling year Higher debt reflecting as build typical production to growth Starting growth customer trade sales Net continued net performance, overall growth.

QX. product higher into in we to pricing, net sales decision offset ago, benefiting lower QX distribution compared and year which growth products, favorable partially from to volumes. certain lapping was our continues to Dymatize grew X% mix, a and strategic net discontinue are gains, a by Moreover, Dymatize headwind

deloaded In during into the discontinued products shipment sales inventory combination growth which addition, in shipments the quarter. of the of inconsistent and The headwind quarter. net rate specialty domestic was the XX% and shipment lapping timing patterns channels international both a the have historically to of

growth Excluding to these consumption growth. sales tracks items, net closer

gross basis chain $XXX Gross of shake increase grew supply as year attainment profit driven of margin and the XX.X%, as The production our XXX by efficiency. up gross fees with was lapping from of partially margins co-manufacturers well prior points. million in XX%,

gross margins pricing XXX significant Excluding decreased compared our offset year a basis inflation. these points actions ago impacts, as to

compared last $X.X SG&A increased a year cost, were expenses sales. net and Excluding onetime of as flat million separation percentage to

to million We and cash reviewing quarter. the make from in operations outlook, a flow first would few $XX flow liquidity. I Before cash like our generated in comments on

in historical million EBITDA $XX.XX our generate flow cash fiscal to stronger repurchases expect with with With in an share. per conversion bought price cash half, quarter, X.X of particularly second average the line flow much the XXXX, to rate. this We more shares at our in we year share to full respect

repurchase share remaining $XX authorization Our million. is

leverage to XXXX. cash leverage by As $XXX full March. growth was lower and XX, last the X.X of million continue than X.X flow from down of spin-off was we net fiscal December the With EBITDA strong and net a debt end almost anticipate generation, to our expected turn net times be times,

Turning outlook. to our

raising are range We for and of net sales million our our billion guidance maintaining adjusted million. $X.XX billion $XXX EBITDA of to $X.XX $XXX to

We increased. sequentially expect each quarter as RTD sales production continue shake grow to to

input Our on pricing offsetting Protein other on actions costs. are and Premier significant protein shakes inflation

sequentially and packaging up. expect first protein to we costs margins However, as gross the from decline step quarter

from which expect adjusted brand a continue benefit weighted further investments. impacts XXXX of pricing be incremental greater building towards actions, the the We half of first has while to half dollar second inflationary has XXXX, EBITDA growth and to

QX, continues driven the to prior quarter, growth primary net year, prior be growth high Similar by expect sales. compared net adjusted from to For sales the to dollars expect increased we EBITDA grow QX teens second driver. we percentage Pricing sales year. to significantly

to improvements support EBITDA to adjusted offset year similar be gross as largely However, Protein patterns are margins are marketing to and prior by higher spend Premier Dymatize. margin expected

up, our Post Before Holdings. provide relationship wrapping update to I with on an want

BellRing. us a and the has Vitale first momentum partner its completely guidance remaining and his Executive for and agreement continues Chairman our will the During we Board. Post years, the to in services closing, Post role are great In exited stock master and continue our stewardship. has sold over through remain services of grateful will as of provide been Post grow. their ownership to shares common of quarter, a Rob

growth to outlook will our I operator the QX us for it Our strong and gives results questions. prospects. turn confidence now over full greater in year long-term

question Thank And come our first from you. Evercore David will [Operator Instructions]. with ISI. Palmer

Your line is open.

you. Thank

numbers around fiscal about that there for color step-ups or be to for made think be promotions how the marketing and would much should up I some of a about and XXXX we the the expect give some you how maybe for rest there promotion implications marketing you there. you think Could and spending rest would the comment some just model?

I'll start marketing. with And Sure.

or from we for range sales and the the marketing to quarter. So up expect X% in be do to quarter. of We'd expect second the promotion net a second in advertising it marketing X% perspective, step to

primarily pretty that's For first spend drag. to it's on highest bit, consistent really, it's are advertising but half, again second a promotion in the pretty full a but -- impact the margin with From does perspective shakes, driver. It the and second mid-X% year, light we fourth in we'd a in the the significant approach expect spend second not our half and some quarter. be promotion quarter an that's not the and significant half doing

-- maybe Premier just see talk see Protein. And industry year? of competitive smaller you. to rest do shaping you And These competitive days, least comment at that competitors for could thank you environment you how a the for Thanks. of about from across some the be the limited fiscal environment capacity that for see the the through some benefiting appear about you but some up your players and just

quarter hasn't before. would have Yes. environment The themes the say same ton last since and competitive a kind of the I changed continued.

seeing brands of within set have the and continued. a us, including pricing category have across TDPs. more capacity pick some are last up taken this down RTDs. your kind So then smaller constraints question we about smaller are -- TDPs for X% competitive the To for RTDs about quarter, people few actually some

I start So I had see of the for forward the like is some as and as should perspective if the the performing shelf brands full look to have RTD a that brands think of kind capacity think of expansion space category from the you ourselves can. then a category, combination our you'll re-introducing accelerating -- picking etcetera, big these what as up innovation, the constraints that the happen just aren't with that levels that line competitors well from as of -- of some necessarily

you. Thank

Thanks.

you. Thank

Our English Jason with Goldman Sachs. next question will from come

line open. Your is

I'll cost online, bottle guess of Pak. was for morning PET it good to also but in. substantial allowing two get savings the PET supply. a believe Starting with Tetra Thanks Hey, expected bottles bring in profile amount you here. only folks. slotting with going I down me go your it I kind a first of was to When bring of the line margin you substantial capacity, amount with brought effectively to on

on we as the rate margin at do challenges that, of you've capacity where of terms boarded Given far magnitude so that since stand as absolute position? run in well

Paul Thanks, standpoint, capacity Jason. I'll and I'll hit have we hit the improved. cost let From the a capacity, savings.

exactly it you plans So are were The expand right. quite dramatically. to

in from bit. QX run like where a is increased whole be steps a be my to It the would So rate prepared our run year. standpoint. that every said to I we Actually, month last for pretty quarter, it little or rate close where needs we assumed remarks up

nice and but see. to saw step little some are we this real it We expecting a which back the in needed half improvement quarter, up to was bit

rest run savings absolutely a rate the Tetras. need big with want described to it to you the cost and add would anything So for was the we going it to very And year. on say pretty to savings? it be Paul, cost to well close that I be you of do close we're consistent is

No, are benefits in yes, we from this -- the realizing later we'll and think you the in been we first certainly as we're get switch. obviously, paying us seeing half, it. from definitely cost It's benefits then lapping the But year. do start this relationship. I We covered on

that improvements thing used amount -- change is only Yes, is this a plastic in the Jason, just of amount fair actually would the just these the also add there's other of around PETs. other I sustainability with

real there's change as the to front well. So a that benefit on

really of to good been though. they've have protein fast, hear. you the format, allow I'm about cost, potential quite prices like more to That's enthused see. bit, topic way for is to falling in come C-stores on enter the that which to the Sticking encouraging a

timing. comments last hedge about quarter You made sort of

P&L? you, and prices roll lower question your can to hedges a to where we expect stand your So these see when to

Yes.

your protein our We're coming on of into protein on really the whey the So on and biggest the I third benefit especially actually to the as expect costs, peak so think on point, the that is proteins powder, XXXX. start perhaps then to QX. more proteins of cost back. costs dramatically milk and we here is, our as the then second will falling will and through we're pull will the we year-over-year most whey protein starting so do early protein milk and is quarter, in really, -- protein see of some milk shakes come kind Whey to fiscal But that tailwinds powders. more really the in

through nine as QX time of somewhere declines rest six far out it into still depending to months from we the go are. and market. the protein There's but to the peak sold cost headwinds how of of the QX, goods time magnitude that's we lag we get a we into protein rolls just year, headwind the as in As procure net time from through on the the we go through through it's of the the

of so this us we And that the expect to next. quarter peak and hit into

lot. on. a thanks pass will I it Understood,

you. Thank

Our next Morgan. question come Goldman from will with J.P. Ken

Your open. line is

thanks. Hi,

my to as the underlying look in prices is, the have that products industry if of question constrained. costs I my Just more to increase you a gone or you're for dry build purposes gross should still it. I because any guess you come back to is won't and part that companies non-fat I is modeling heavily, cover. think, most you pricing? have capacity whey. still a And there. Jason's question discount your that as the answer those that of I remain That's, movements of these and is on we I -- And there they question Historically, capacity to your is, you'll such assume margin than lower, that to remain amount down, gross should little think, ask guess, think give margin guess in lower, way significant your ahead, that, down, we has more, your as up reason constrained, to have

Yes.

start that I'll to But of you consider. a Darcy, So touch this want then pieces just you have on to there's play couple of if and discounting. in

as headwinds see protein. go to expect yes, we'd some on So we XXXX, into

We around spend. places, in is other are where which in keep very starting half, second packaging we're in other the doing seeing promotional some especially inflation mind of we're our costs. that But in year and manufacturing a little also

side into you more invest to building XXXX, we dynamic the protein we is but of going brand are go costs as thinking promotional the and into in So of going have that down, the it.

think net-net, that are bit a next up are two play. to so primary bounce ought the year, I And but gross those in margins things

whey they a protein, nicely should the gross see But But On of obviously, quite come of are protein up and net-net, restarting between be is really on the now. margins trade-off the activity. so that I unfavorable. we costs for powders dramatic, change where coming it's shakes, because down expect promotional magnitude would from right to

thing other I to fiscal about proteins XXXX. this is at Jason maybe and our didn't this get think, mention, to, I XX% point we're I The for to covered XX% on want asked which

other Thank like there. update channels as Premier. curious It for seem then I'm in you an it's e-commerce, And doesn't strong for in just quite as that. for

changed Just the for for your year, all? strategy curious there for that's if and outlook at the

are was down quarter. you're was little right. the we that the -- for channel It a Yes, bit only

flavors from quarter. co-man talked We've stemming business, we They reminder firsthand that are But warehouse retailers. Dymatize key promoting all flavors at in about and holiday Premier tight online continued we about especially issues Dymatize at is the and back nicely. in actually items, our bottle last -- key the side, of is had about Dymatize stock prioritizing yes, promoted Just are are retailer. and stock and the challenges is XX% up our they this of constraints this XX% one kind on quite time getting e-com that our and space still a our the -- because for see on Premier is during fully

So Premier, need inventory. believe working are getting it we the I actively inventory. back. we They have on do the

in business next So remind kind later. sooner total in that than XX%. I the for will would thing that our But hopefully months, of just solved believe about this I e-commerce be several one is only you

important is one on get the it's areas of the of We it but of it it's we our still track business. So that channel. get want households, is because channels trial, small to it part an a fairly -- one we build

you much. Thank so

you. Thank

will come Morgan question from Kaufman next Stanley. Our Pamela with

is line Your open.

Hi, good morning.

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

marketing. and promotion So

are with what before. communicated We consistent fairly we

-- to -- will plan QX you, are doing back just our items. is -- with Paul we in remind non said, mostly So coming non-Shake we some we're as marketing, market around

powder, actually Premier we basically half as more ample So of on. our well of kind of marketing Dymatize shakes. towards back product we're end any the Protein supply back have that come marketing We'll our as

standpoint, And consistent back again, at always what getting So promotion about QX. into really before, was with but that we'll talked From until we we're a there. looking start plan. marketing light not promotion the

promotion kind marketing answers So of the that's fees. the and

just QX. it's really our that's assume to that QX seeing with continue see into and seeing, on happen you're but will do seeing spring, hit are for are bump will we which we some to start is We'll talking improvements TDPs, that late the which and in through then I us and resets having of again, kind up of in not to dramatic. about shakes, and QX. going in-stocks. quarter some better be reintroduction of On SKUs waiting really TDPs the to on next We'll with slight We're quarter, this happen, TDPs

levels, I XXXX probably every consecutively QX honestly, really it's going but improving to single take, would to I to I QX, quarter, get think. that As QX, we'll of think be far as levels, say, XXXX XXXX back

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

were were that the There to headwinds Sure. items two quarter.

in quarter. did shipments first The in international see some we QX into stronger shipments some first pull have de-loaded is we especially -- that that was the

So quarter. over and a will XX% that of products, into called couple we've were continue discontinued headwind quarters we of the as headwind lapping last the which XX% was then about out the we second that see

gets out those XX%. the items closer headwind you primary So up were two the which was consumption if a are to pull you two growth, about that, combined those that XX%

So feel is well -- like consumption a from we the brand it's really doing perspective.

FDM So -- just last made items and year we e-commerce, we want down. timing and items we're it are really just we decision shipment weighing the that and some just have got

big everybody and encourage really for can little and represent Yes, three those get then is orders of to patterns in healthy because just consumption specialty super and focus you Dymatize. lumpy The business on -- next. and international quarter ordering one the XX% business a can about one that would business shipments can the be I the

is focusing business, consumption of growth. on and we've seeing the best health of really, the the been consistently double-digit So barometer

Thank you.

you. Thank

will Gajrawala question come from Kaumil next from Our Suisse. Credit

Your line is open.

came let nicely only ahead quite in ask your But you expectations. the revenues side. just up first, on Hi, of guidance if you your EBITDA me brought

So anything relates of be related that we timing it as revenues? to is should maybe there aware

about margin the really fees attainment quarter EBITDA we And the that's include in not of that an we in the guidance. reflecting quarter. our first some our that the did Yes, end bring from first specifically, did $X.X we the in at range, million saw of saw we favorability largely bottom original of perspective, production

a certainly big And the so for of on part raising EBITDA. is reason that

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

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

sure. Yes,

hit I'll fall So first.

think I both supply. last it a say, ample I that about supply, overall, talked talk so we about but quarter, little I let's just Dymatize, would have that product

powder really So is good.

talking doing powders, expansion. both Dymatize, very Premier and got club about Dymatize, in We've talked fall remarks well getting actually in And the So on spring distribution new was prepared resets. store around We've gotten forward. I in. exciting, back which looking items and coming so [ph] -- well. spring back really SKUs on three March, that resets focus spring is be is about our as the shakes actually we're April. pos to that in for then flavors When reintroducing our and will applies

it's -- April, good. spring for those And and So actually, the reset. May looking it's more

for they've get to they're expecting full our -- all line everywhere items. the spring, we've and we're heard places, to most taken back, where excited So three

good So resets. pretty feeling about

Alright, thank you.

next will from with Growe Chris question Our Stifel. come

open. line Your is

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

will quarter say worst I that we had are our of production the lapping, year. capacity this yes, stronger So last constraints and kind of we

So have we're about lapping we production -- strong but did low a XX% number, growth.

So that. we were with pleased very

having we're about as to year, after And I I But getting it's still that full feeling number hopeful we over-deliver belt production. about double-digit under to talked low a our that. think growth -- that as good quarter be although think As expecting go still right and now, first on. we'll we're better far our for the

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

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

question, business the final of that factor, one how just production just understand then that And here, finished the am Is to I TDPs. future? could want thank the those you. a continue, onetime do And affect in

Sure. Yes, has those specifically related to a contract period that now passed.

over a So it's that contract basically a minimum is period. commitment volume

to not we have as we not fees go forward. further but production are expecting attainment would -- we So

Thank you.

you. Thank

from Securities. Baumgartner question John will next Mizuho Our with come

is Your line open.

penetration those to the anything learned for going providers, you are there, can touch, just just insights how you the your thanks or change question. mark differently data, wanted Thank thinking move are to much about especially morning, I would about forward, the you. you on first now, helpful? data think channel expanded, of seeing any you the from off, any how Numerator. the Good be anything have up on sort in how reassessing impact is you on if there What I guess brand expansion, the there

-- just this we get -- love is it quarter. a changed are new information. We question to next John, would ton of I

that data, feel Our quarter focus the making the last sure has for with we really good old been about the data new reconciling it.

focus. been has our that So really

digging data reason a know point. to it's and it main our coverage -- at both especially better we gotten switch have this, actually a in is we've is in is -- specialty. of the The there kind better are level reason ton business, team -- but the really this the there, for e-commerce over top the because insights -- We at really -- you I when the and only wonderful comes think IRI that to of is mine Numerator

a just right think was side move insights that But the just coverage it the haven't standpoint. for And even I the we great. a scratched get So from so now. us going of will Numerator to we're on from surface then good far depth be

So quarter. ask next me that

Okay.

save quarter. the Night And that my Good the for follow-up and next product. innovation I'll on So

to Premier pipeline. about the Dymatize you that for the think it's more from functional I introductions. role can going I segments neutral, are functional and it there gross But big margin at you've or certain there's if that get on these a to least Premier the to they to likely just as basis? are based opposed products on of step how thinking in seeing better functional, a be you. flavor accretive, then normalized Thank fair play into imagine not when think moving done, way research is the other? And one lend you forward, will are

Yes.

on we or So incrementality. not functional. it look necessarily our don't functional -- strategy at all We is about innovation

aligned consumers think users, so our it's So occasions incremental the incremental incremental side of things. occasions. This if one either to or perfectly at looking you pipeline, is of

about some we occasions. is will think but get all incremental also this users, I

is the shakes Obviously, XX-gram are morning. Night beverage. Our consumed mostly Good a in nighttime

limited is launch. So a this

a -- flavors just test one on on is And it are it's year. this We three powder. launch RTDs,

it. So in we're are early kind of dipping encouraging. toe our very results -- Early

designed and that has to it. it, for really the I name be a online exciting getting is reviews really a new this consumers see It to great occasion. think some it's understanding of

incremental the leading brands, overlaps think if our current you is focus in again, innovation I that's it's strategy with But into And So that being think our all -- but of about function both on line. more to and great. if incremental. function, general,

Okay, thank very much. you

Thanks.

Thank you.

Our Stephens. Ben question from will Bienvenu come next with

open. line Your is

is Jim posted what's Hi, good on Is Ben. guys as quarter. Congrats in-stock improving just to like a there. to constraints on feed guys. ask us the rate for going mass, on alleviate, just is some the on you start give because strong can This I'd there? you capacity results that really detail

Jim, about Premier? assume, you're I talking

Yes, go ahead.

constraints capacity channels quarter last FDM, in that were yes, year. Although FDM, had great by most affected channel, in both a our so but brands like those Premier

are distribution are in-stocks. well, just So in-stock better that in better those more the really yes, so gotten is really minor gains, reason factoring but driving some improvements. primary stores as rates just We've

really think this, biggest but is know I FDM. opportunity you our

think out. those from I within just see here we'll to strong growth continue on I that -- channels So think

cap. maybe there shelf are. not Is same into have that go certain specifically aisle looking Is need the or guys visibility in start more anything you the [ph] might ships where not on the of -- forward, some that guys for I consistency, from because to the move the said, NCAP point hit shopper you to maybe end there stock the the shakes They're of kind metric store? to it's whether you people see a sometimes those mass in-aisle channel, in know that velocity can

to not need We filling can in-stocks. that fill only product have but improved up we Just that shelves, extra enough also product out the the we are we have NCAP.

we if by been asked it So to flow will production directly many in. customers, NCAP. related can do We've capacity,

it's actually get this couple we did -- We thing. then off. We it stores. is capacity need to and sell capacity but We a January, in shelf. in a some in general, just have of more display the products, But held can

it you. on. thank will I great, pass Okay,

you. Thank

will question Our of from Bank next Spillane America. with come Bryan

line open. Your is

with and operator. then to question. I a Hey, had one morning Good I thank just everyone. clarification you wanted start just first

the for prepared sure in I you'd in mentioned just you a Darcy the is talking remarks, think And or XX% about XXXX that revenue? shakes. I right, not capacity Premier make want you're incremental extra capacity XX% have volume, available to

Correct.

maybe how thinking guess, also going XX% a as forward, of Okay, guess should priced, being of understand as and much margin And to some so about just to think kind year, driver is trying gross bigger as fiscal of thinking into anomalies whether right, in years? be revenues for and normalization low Paul. right, were but next structural margins about -- more out to -- be leverage in of kind thank I you just higher, trying think we gross margins, really weren't But in the the here beyond might co-man business funding we're this move promoting you. of or EBITDA costs I And we margins. EBITDA XXs? business the given that promotions were and balance we're of kind you, gross just growth the again, model I of trying is got years kind XXXX EBITDA and mid-XXs. there's out out that affected but if kind modeling the And about Darcy the more growth and weren't margins the be thinking margins, still translates Obviously, I peak, at question you've funding that it were both this revenues mid-XXs to capacity, then even are that I should there achievable, much. more you've some margins and how the guess,

Sure. start, jump I and in. Darcy, free can to feel then

So margins you some in the mentioned of the past.

protein of relatively the capacity and few pulled during constraints of I marketing. when those of so peak that had think margins promotion a low ago, all were And we costs some time years time were our we at and

those outsized the XX% call XX margins always upper XX%, EBITDA we to margins so kind And the range. and of margins, the in mid

As way more historically strip those we periods of think margins unusual our business that XX% is were really, forward, gross out the that of XX%, range. some go about XX%, we in kind the

the I perhaps we get. I some as been we think our could do at of we do with EBITDA certainly into So range EBITDA would leverage. in the to investments over side upper XX% well, be And the gain of And XX% be and will the term. margin we is gross that I to -- mid- We've achievable -- but primarily that typically think margins, above the believe behind do within long line, that spend get on likely G&A that promotion would is margins leverage marketing, gross still our as still algorithm margins. I think leverage G&A our most then in that. obviously, the think our we

said, think think that. we long-term algorithm of about the range margins it, I half we the the how -- XX% good is a And think term. it about So I on as like proxy in on to long the for gross is upper XX% maybe margins EBITDA

thank you. Okay,

the lot highest margins, a big -- basis. specifically a because the of EBITDA And we just quarterly category. then QX it's don't the can range do into Obviously, on usually Bryan, come and the just is that's marketing QX is new margins consumers time the a when cadence. from to always note a big because lowest

market you we usually new year, new side. So the heavier on and

kind -- QX, flat then that's and So QX. of

the EBITDA margins. usually cadence So that's of

helpful. you you'll about, term, better be I more thinking to squeeze That's And answer quick and just thanks. household this in when awareness. if John -- one year, sense this next asks, could about a do brand Okay, question of in, again, penetration, just data, beyond a or measure he longer just this maybe re-asks you Baumgartner just is the -- penetration household his maybe a but sense have have but of

is means awareness I penetration availability, in of So -- it penetration way, if -- awareness is but household understand to guess just I than what if needs up awareness thinking than lagging needs of brand be to there's just and household greater that some more penetration penetration? step guess and -- would faster, it's a I'm less marketing there is of still if ramp brand the brand trying versus kind people's that household or perhaps then greater in

Yes.

our And before is part funnel, of have which of yes, it's kind to definitely brand. think I the getting you can so then I people funnel, try. the is aware aware, the be right? of the -- opportunity think You top that

We decent, kind of awareness. have aided

So have is convenient some you RTD with brand have to heard opportunities. we come nutrition unaided protein and your where then a Premier Protein. The name it back from big

definitely we've -- there So is I think been dark.

I been marketing all forget a the where or we're and of dark kind we over story, close I because really plus. think on for think but we've promotion this to is year

So, some get kind to get we've do work back vocabulary. on got in consumer’s to and of

promoting, what's showing on on so to that. marketing encouraging those household we're and period we for of haven't -- even a me think metrics little loyalty time consumers I to our high-value really bit of pen, and when but this are been is we holding holding lost during loyal we're

unaided got definitely we've that do unaided that -- and be work to awareness, that the be I think would So and the some will our start.

Thanks Great. Paul. thanks Darcy,

Thanks.

Thank you.

Our from question will Truist. with come Chappell Bill next

open. line is Your

Thanks, good morning.

grow especially just XXXX. the of -- the to this the volumes as how into trying move over kind next -- demand You or understand we

and And of pricing category I your the scanner there, down. flat if the constraints, mean you XXXX, look the I'm that to whole the business the grow through is change is how in the the again, Specifically, and at more -- into thought grow understand trying is data, coming kind channel? those you get to for does the were get volumes coming track is capacity club, on to can consumers it club mean, back back from the to really -- channels is as you it capacity, faster just even I or volumes it

Both.

that said -- down also I but pricing XXXX, was Volumes was I the question in think earlier pretty for and I the have and amount in been response So quarter, constraints. down category you're mean an TDPs of in flattish depending kind of or category on slightly that X%. capacity right. both a to fair the

across and competitive of So set. issues the capacity just constraints lot

this in-stocks capacity, So don't a improve I improve to as pricing back demand forward year. and lot look we drivers, getting start and coming see play coming more into

we've seeing So in We food area drug yes, think the again We'll increases increases is upside the will the this nice channels. households, a start well kind which have seeing as I improvement. this often track But repeat new where trial on the same we get we we see likely they seen to what were we the as untracked, is both. mass bigger expect it And think past, the by constraints. of XX% coming FDM Premier which, from, hit quarter, capacity because e-commerce in then I club started new still from see. rate. volume And expect for both and hardest be you'll was from volume future for I within as have and

repeat repeat cheaper bigger as channel become within everyday they because packs at club price. a consumers and So they the users, want often

here, us gotten -- future, in I will untracked see tracked you'll growth that continue and growth model has within whole the both and the think, So volume channel.

trying or over -- capacity a quarters volumes of kind lap accelerate. time, guess as looking at like next seems I to three pricing And and comes it. you same you're like and the to Got modeling it the I'm double-digit understand up need we're landing the soft for

do now of kind see right you I pretty the of simple volumes mean So that can like it quickly? a that adjust that have full with set is pick up channels track to you at the you few get quarters channels if the or club taking the

I'm sure Not tracking question. your totally

doesn't I'm over the -- to look volume to how quarters next you but I the trying price as to lap -- increase, offset you volume four three understand to are it? mean expecting up just just pick that quickly you

you Paul, Yes. about of talk to cadence want do volume?

Sure.

pricing get this a want so have benefit the shakes in half. still and first that of we half, promotional about we second in do relaunch year aren't for we price We key Premier the production expect grow -- as also cadence just we price it club, October to promotions more that volume part. increase a of of the be promotion of still and the online, last that increase. this kind in talked the took April we in drives wide into current the in second thinking while the will took second increases, the price in the we year. some We comes currently year -- two is will fiscal half, which some lot latter related benefit drivers October X I the get forward the a So pricing a we of volume. next we get and to But highlight are, flavors as year, obviously, to of half current we for that of a one the in for having selling. of benefit our In the normal

second mix production be in second So we we volume to significant first, of pricing half and but to the the of expect become benefits because still that's in the the coming than more see online. volume a a contributor and half, does

thanks it, so much. Got

Thank you.

with Dickerson Rob from come will question Jefferies. last Our

open. is line Your

Thanks.

like pipeline brand repackaging where have follow-up. it Darcy if quick curious, term, Just think strong you back just the the in we despite a some I'm new if and is but you or question, longer innovation just and around still category it recently, generated of any positioning step are in design, of still foresee quick much, usually of for a innovation, TDPs think term, general think next coloring still years? increased of about two kind to know, three kind don't you the I had have are entire do backdrop, a very new category question, I competitive growing kind so what just reduction seems need the we volumes a when you you and just in there's being as longer kind share holding usually repackaging, there's follow-up. competition, quick

you're assuming about am talking Premier? I

Yes.

things. those at of looking always We're kind

look of over think that time. the of Premier kind we've feel I updated and

we're stand feeling good. I point positioning brand from a really think

of We approachable consumer tail. continue all of we have this this the to on right protein -- kind tell kind And is tiger of mainstream us by just a is continues our trend. research

brand right. is think And so positioned I the that

people. to challenge is absolutely I more it's message is we think production, then is that -- so can the And drive the our capacity, focus. just it

is good moving quickly about, command. Okay, EBITDA production should flow. everything moving just on up there's Look, flow is down, way more generating spot, in cash up, leverage coming margin more and enough. free then and you the And fair cash up, your talked be obviously a with sales moving

of a at CAPEX now. So least needs, lot for not

for definitely just would starts of year, you to So it, allocation? in pick where speaking, fiscal year, kind up cash thanks. this generally view priorities later of the That's next kind cash again, flow

Sure. Yes.

correct. focus with completely lot which We allocation -- generates Where gives growth. you're a organic on the strong is capital our today So obviously we flow, our us cash optionality side. really are of on business --

capital the debt the decisions down really share buybacks are a and between deleveraging for the really high paying our as fixed. have remainder of around We and deleveraging is our is and revolver really, M&A bar primarily so allocation

through delever and in through the capital growth. assess continue keep to year. So versus prudent mind, share we look allocation as EBITDA we buybacks a go as at still option just we that we'll And delevering for us

EBITDA. So we'll growing get times just below X with

optionality So down versus gives buybacks look us just to it at the share bringing revolver. our

Great thank to hear, so you much.

Thanks.

reached and for We today's any conclude time Ladies and we and your participation, at program. you. Thank time. appreciate have disconnect allotted may our does you gentlemen, this questions,