BellRing Brands (BRBR) 6 Aug 242024 Q3 Earnings call transcript

Hello, thank you for standing by. Welcome to BellRing Brands' Third Quarter Fiscal Year 2024 Earnings Conference Call.

[Operator Instructions] I would now like to turn the call over to Jennifer Meyer of Investor Relations for BellRing Brands.

You may begin.

Good morning, and thank you for joining us today for BellRing Brands' Third Quarter Fiscal 2024 Earnings Call. Darcy CFO. President are Paul CEO; today our Rode, me Davenport, and our and With Paul begin release bellring.com. and posted Relations a presentation Darcy and will support on brief we'll and that filings both question-and-answer have our afterwards, the website session. The the remarks SEC press these and in slide with supplemental are prepared Investor remarks, at sections

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

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

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

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

Thanks, messages Jennifer, want that all and all this joining you with. walk today to away I X have thank morning. I us you key for

grew saw share XX%. to sales over first, up I'm net sales a Premier we The strong prior XX%. quarter. continues EBITDA we The happy year in adjusted We to on shape XX% that drive Protein capacity Net to up demand. have new business and bring as perform strength with and begin

delivering grow Protein Shake shake strong. second year-to-date performance RTD gross category remains as above benefited new quarter favorable our I'm bringing our The continues margins. proud expectations above were consumers. each algorithm. My demand of Premier to message, our long-term margins with in we EBITDA Our Premier with from

and by percentage outpacing household the XX% nearest points. QX the competitor hit all-time Protein an and to July. consumption X penetration its in RTD high accelerated in category, in in Premier XX% remains grew Our highest

We have our entire ranked across and the top in XX% RTD #X category velocity SKU of third. products the

has of meaningful marketing or brand haven't the that believe a to potential, given we untapped continue ton message. innovation. My third We started

our Our outlook has plan production delivered to and improved.

co-man that remiss rebuild strong happy secured delivered in production to consistently have our every incremental and inventories share QX. especially and is has for room the fill or fiscal to to 'XX. I be safety entire would huge levels, a bell stock and to diversified ring there us safety gaps when business to enables organization, it dynamic a quarter this category, incredibly manage internal we error. I'm growing This with give to little It hard remaining but capacity operations year, up is to Our limited it network allows our customer inventory if for us as out target our us I didn't challenging do stock we shout is rapidly setting for additional a expectations say, but a the in sales team.

culmination of benefit come. My for a first message So What the for you your learned work. thank us really hard years we've X. to last will is all

and QX in grow to raise net our to QX and better-than-expected outlook XX%. over Our our XX% to drove increased XX% the expect sales We performance, grow demand fiscal production confidence now EBITDA year. decision for 'XX to XX% to adjusted

into going date to performance our of proud and XXXX. by are encouraged We our momentum

to initial XX%. of deliver to year planning side for estimates While high sales at growth algorithm are finished of next with process, XX% certainly long-term the net our not our our

details more outlook on in will November. We fiscal 'XX provide

consumers. X% bringing every have versus their teenager, in forms on benefits QX, our by and almost equally given velocities up Now more The age the XX% aging saw wide to It brand's category depending providing while in building deeper a is activity. Protein led into rare a get highlights. with growth child, Ready-to-drink all our driven critical the mainstream that continues goals. tailwinds an stronger into health distribution convenient It are continue nutrient is our beneficial learn, and to a nutrition about of high broad an brands more category woman, category swath bit appeal. X% the the for teams strong and by a RTD and Ready-to-mix QX. to a future, weight as muscle get for adult to grew brand category. pregnant and of we Mainstream incredible a gains. is a new future variety most and have grew potential boosted ranging display The growth consumers nutrition management. and excited from to our athlete drive relevance the feature of

and a Turning food quarter, XX%. to expansion Shake e-commerce outlier growth and consumption ago because grew consumption in XX%. versus remained Encouragingly, our brands. was specific up Club in XX% consumption mass, and and strong to up returned food. by overall volumes robust mass dollar Premier our changes in year this Growth flat strong growth distribution temporary velocities with in and was July, with growth consumption assortment out-of-stocks. the flavor driven of clubs

with as category. brand remained #X the nutrition TDPs RTD in and as in-stocks bottles broader brand well in metrics market as gains, with in up TDP improved Our Both #X the of the convenient further throughout the QX. share RTD drove XX%, with versus growth Expansion including QX. form, Protein brand the Premier quarter maintained grew size, position expect we pack segment distribution TDPs market share the along XX% and healthy. its in in

hold beginning, the XX% at with in repeat of buy adding We for year with points Protein drinking households consumers from referenced fiscal category. surpassed our goal household category percentage another continues penetration X I the the to of household reached in Premier I'm all-time brand high Protein. growth the roughly see pleased to to As coming all in penetration bring steady. Premier of 'XX, with rate new almost continuing our and outside

household strong trajectory, gains a low plenty growing room in with Protein especially brand continue see of velocities. XX% its All continued in and category. Premier encouraging penetration grow the this behind of and QX distribution to expand powder to we our is high-growth strong category because

at a of in #X Premier by marketing customer, retailer's category. we potential format the it remain fact, in velocity the a powder growth the investing did category behind category. way major have X.X% brand dollars encouraged quarter for powder we in reached this be item more same In Protein brand the will We ready-to-drink to household the are believe in in mass the and Premier QX. Its the mainstreaming penetration the continue contributor and this

in in customers. key with of third velocities one at the Turning category the to top Dymatize. The strongest brand remains the

However, and challenged It that U.S. strong as still specialty comparables excitement promotion the worth for a softness this covers the which result global these competitive pressures about consumption, Despite brand. international of a quarter. this channel. which headwinds, with tough the had in the continued ongoing up is noting also XX% XX% July a net brand e-commerce of of was ton record of represents business, to Dymatize's XX% continues sales be about showing there's quarter brand

promotion. in behind are in Looking the and marketing investment both increasing U.S., Dymatize forward, we

running Our national McCaffrey back Christian San with marketing month. this All-Pro Francisco campaign launches

am potential can with closing, year-to-date brand. see creative to bullish are proud X do we top-tier I of amazing for continue progress. person We with mainstream Overall, type be complementary this on folks the brands. In and our powder excited to of the

results track to ahead We are our guide on of November. deliver last

Protein mainstream confidence leading in tailwinds. high. share are brands and and segments are the the strong Protein maintaining Dymatize with of outlook growth Ready-to-drink BellRing major the long-term household #X remains early and Our position for in category. the Premier powder low penetration Premier Brands with stages in loyalty with

Our to drive to start continues grow we as momentum on shakes demand.

to robust our to years organization core, to demand pivot from growth support company. At we capacity excited are Our on see is growth. I'm plan driving. track a our many of supply-focused

of to our entire look call our organization XXXX, to brand. Thank So fiscal place on drivers We you more interest marketing demand company. your for 'XX I have now national over in providing is specifics including quarter. the will to biggest the Paul. forward turn in around eager our our next campaign for all

year, trade performance. Darcy, EBITDA an to and net sales increase higher double-digit X% of were and margins shakes pricing. international everyone. Adjusted offset was for $XXX to nearly result remaining with more $XXX EBITDA extent, morning, and gaps RTD XX% good dollar net and favorable Adjusted by up quarter, retail be a quarter Thanks, quarter to margins. Starting filled primarily growth lower consumption QX. Dymatize and lifted above growth, inventory meaningfully expectations late expectations. outpaced for over for in sales XX% sales XX%. gains gross growth RTD of QX million, on modestly improved the net higher brand Protein Entering volumes trade grew were growth inventory the levels. XX.X%, trade fourth target prior share are our builds levels growth declines Net lesser in Premier the by with a as million, powders. of distribution exceeding strong this levels our inventory by volume behind with domestically. growth organic than X% driven XX% Shipment was decreased

protein Compared expectations, XX a display line also a net distribution. of a For from gross included input favorability. margin with cost lesser on the also whey in protein changes period costs mix in advertising sales. domestic, sales basis drove Promotional basis margin profit from of promotion activity of gain favorable prior hedges, cost quarter $XXX X.X% were of which lapping recall, margins as this XX.X% net mark-to-market Gross expenses SG&A were percentage that relatively unrealized and second the increase. included primarily the our The headwind elevated growth are on spend challenging as XX% than expected XX.X%. to in and increase club the heavy costs grew increase our profit to we an nonrecurring activity with an comparable XXX a million benefited points unfavorable to lap in net with of we in more quarter. Gross quarter deflation extent, to year. year-over-year points resulted commodity

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

expected, the by incremental shake As production. driven the in fourth increases inventory with in third quarter increased expected further quarter levels

flow will With X.X and XXXX. fiscal of As million quarter, With generation, cash of million June to this and EBITDA net below we our we at X.Xx. share net in debt bought growth strong price in $XX anticipate remain total. share our Xx net million leverage shares per respect leverage average or repurchases XX, an $XXX was was $XX.XX

share remaining repurchase million. authorization Our is $XXX

billion million $XXX to outlook. of Turning 'XX $XXX be raised to net $X.XX guidance to adjusted to $X We sales EBITDA million. and fiscal our for our billion

XX% to the guidance healthy Our with midpoint. quarter. margins line XX% implies the growth adjusted guidance confidence production in to XX% better-than-expected XX% growth of EBITDA strong updated increased fourth at shake demand results, XX.X% The reflects top adjusted and in our EBITDA QX of and of

sales Our club implies of on year-over-year. promotional updated volume be LTO at Protein Premier fourth Protein with relatively net organic distribution Dymatize expected continued activity. guidance is driver. gains, Premier growth volumes growth, others the and growth flat all quarter main partially robust higher offset the to reduced XX% based and midpoint largely by

improvement. We margins over lower expect gross modestly quarter benefiting input improve quarter, marketing are the new Premier shipment meaningfully to gross fill margin ago growth for growth the costs, inventory net as while gaps outweighs RTD retailer year to profit consumption higher from and remaining outpace low we dollar expected the shakes distribution. Fourth

Lastly, we with to we our expect be are quarter performance. year-to-date prior margins pleased compared down adjusted In fourth year. closing, EBITDA to slightly

high, Our is it and now questions. turn will to momentum to well the out positioned close over we the are operator for year. I

comes Andrew first Barclays. Our of question the Lazar line Instructions] [Operator from with

Is price mentioned in Darcy plan planning hitting I this more than the on favorability given in you quarter, for last fourth start you that and quarter think ready-to-drink had Paul, Premier shakes. quarter costs much the increase that a thought? input to you still you were

Yes.

the our in We related protein that powder input lot shakes. quarter favorability is cost price powders, our are not a increase. was still moving forward this the Keep whey for of mind particular the to in with business which

a favorability cost. of And rise protein. was So on third on there the was sharp whey you quarter, the very a talked may recall quarter is protein in from lot that -- whey expected last as we about

conservative quickly just For us, that into on were bit our flowed how P&L. a we

Shakes calls. favorability because on much saw whey on because primarily to was protein we shakes. not some so much the of largely as And pretty -- related were track

planned inventory way or you your to now capacity And securing the target of to fourth it your had pipeline you that's to you will that I just was beyond how capacity it of increasing know of sort as was the time, Darcy, incremental Great. you then for formally sort and of of initial safety potential each facilities yet? in online? have some Or mentioned just incremental number this year? And looks your that get think 'XX in coming some X incremental supply you part what that, help but all lines the then X Was I'm -- 'XX. you've back to stock through that needs for quarter as to of sort for greenfield considering been levels. the at wondering committed already that the

The beginning year. to of the the incremental thought Yes. at was what incremental capacity originally we

So very good news.

some. first secure time capacity couple for been we've the years. We this last able the is been And have pushing for to really that existing of co-mans our more

think it's news. I good So

fully good to it's pass actually that they're some now and having that think stabilized have on. co-mans are I able our efficiencies news

very around all news. good So

As for co-mans new the with of expansion our lines.

-- in expand But who We going generally, the with. of same. process have is we're not evaluating the time we're line to the

capacity expect to need in We 'XX. new

comes of Our next with JPMorgan. from the Ken question Goldman line

is? any the line the that where positively the we line, [ about growth lead the early usual headwinds into bottom the of think started there from even the top with understanding sales ] was as particular the line just Vir to we terms early that I just about curious, tailwinds top yet. or I in EBITDA next growth should negatively any than hasn't year or on to of more flow-through look reads appreciate or think year might costs are

say So I would things, a 'XX. couple fiscal for of for thoughts

'XX incremental potentially that First, will spend. we've fiscal Shake -- be we're spend, highlighted business obviously obviously our marketing talking suggest we -- to that demand, which for driving expect promotional would

between the from line driving make X on promotion look expect the 'XX versus I and on demand see marketing perhaps. we toggle some those we to on And as as obviously, we 'XX, promotion So would to step-up may marketing. decisions

half or The a expecting -- to shake there. next price obviously, year. throughout and inflation step-up 'XX on our other starting one to we the on QX then some of our is more We're into still in business. increase year. 'XX we Powder first we've But the inflation It's expecting 'XX. in pretty really are increase But business, powder, into expect sizable on impactful a continue versus taken

we going some forward, think our price But can headwinds some inflation, on expect So shakes. offset I increase with I on promotion. largely headwinds on perhaps marketing and

for if competitor, curious, the of it's what then little more anecdotal? or a your accelerates getting more more Shakes stores is consideration well point. And we curious follow-up, it a see your mainstream gaining to really that's started mainstream widespread? if would bit not at more and I'm your And into part one, I'm something this see migrate a sort the of just desire it just of Shake least aisle traditional in brand, space at the a Is beverage as of we biggest Premier couple sort shelf or as to this biggest supermarkets.

it's been expansion, So and expanded tracking yes, DSD. the competitor been surprising through into we've it's absolutely There's really it, beverage that, some aisle. true. that Not has and

term of As the One strategies of the has of right? getting of display. -- always I you pieces. That our would been the aisle ways. is of it's show I up X a in aisle, near of remember, getting is getting our aisle, end couple can the into so strategy. separate One more different So kind think out of part out a aisle key out

we to see the where and those in see other part especially of you'll a quarter, strategies, you'll of that we key saw we of deli. even -- them pursuing actively next amount section a part you it quarter, lot the it displays store our bottled strategy, areas the them that like is are adjacent other a see is And of you'll coolers right of to the this and near pharmacy in a displays, have single to in go with both been actually from we'll and The checkout, fair of store. other out -- -- see everywhere

the a a term, key around more category but bump eyeballs long versus of we look the therefore, mainstream which and, strategies, is you We actually around I part aisle. And actively more movement trial X moving, of think which actually asking, and think, by absolutely the which So us first get if the more what that evaluating. the of is, multiple just -- we're that display and strategy. Then a you're is awareness of the we say I picking our into end-aisle store are up still that lot and would can placements absolutely of evaluating.

question Thomas next Citi. Our Palmer with of line from comes the

prepared in to due noted in of as examples constraints. to the and just not next bigger big then Protein look ramp there has year up been how part Premier You out point that maybe highlight innovation on remarks for Is to And towards a this become as starts any we a this a front. some focus? focus

Yes.

So X put I would innovation buckets. into

The which expansion. basically pack call little first innovation, what size format eye is bucket I is

of like So at be protein. have packs. be which that different bigger will It sizes, be It we can packs, a of can smaller bottles. different can combination macro get levels

-- that, and talk So We put consumers is innovation. segment. really and about Yes. with incremental of of eye for occasions. you incremental mind, little that my ton that in a just in kind innovation, big-eye little into is see innovation. When also going eye is Flavor opportunity

of an us year. going increasing to Obviously, what we on capacity. come So you'll next lines public you'll focus on call, Protein but into burner and the put see is have of innovation kind get lines new a back a of on not couple XXXX. launches that see in increasing out that new But of I'm because Premier

segment I And the to campaign? this a seems half awareness move the launches. brand a be we the And for on to target? bit what's of then differentiate any on guess, maybe marketing Is messaging, competitive right new this campaign of the the what into Great. help Dymatize, in more more brand? back Is customer and as -- Just little trying it what's it the now?

Yes.

actually is, focus the this hits week. yes, and it the So air

awareness. pen is household So it. you The our X%. I hopefully around see mean should really focus is

So brand. product. is Dymatize awareness The the it's a premium around of

pay for. expected consumers And so which more are to

want and we why part should super graduate so doing it's already equity a with is is his And to explain authentic McCaffrey. What's about kind to it it key him of kind people he worth of we're and Dymatize amazing of And regimen. it his why it nutrition connection uses because Dymatize. a really borrowed of And is workout Christian in success.

is is not right the launching it starting. that So season as we're coincidence by football campaign

so and is that a is And -- he big obviously, name.

around So is that equity. the campaign, It an Dymatize -- and focus. that's is awareness the it's focused

also addition couple In spots other that of have campaign, on equity will to focus flavor. a we that

if lower funnel, upper in funnel into upper and campaign, of funnel will on campaign have starting within of it QX marketing a you both of the So 'XX. then kind think continue going we is

Davidson. line with of Our question Brian from comes D.A. next the Holland

volume just backdrop the about referring more and when earlier kind just question to CPG. pricing, commodities challenging are Maybe volume flowing mindful broadly, and -- across through the of also P&L the back of response Paul's

customer the to respect to pricing you Just announced any or provide that can share sense response last with quarter? you

answer you do want Paul, that? me to

please. Yes,

Yes.

have specifically of mean pricing pricing other taken rising never cetera. is labor, is will it again, So because et easy. of say freight, it manufacturing, helpful And that cost is recently. competitors the I I What is

to line. they -- pushback, which are all seeing some the we're and would increases and before then of I people over -- And it's on other did always them major but no and passing it helps. it us, So say, are

dynamics in powder. about some label Perfect. And whey about rollouts, with particularly ask we're then getting -- I wanted to competitive asked private

of of compete was any take the its historical -- I little maybe frame, makes maybe bit private limits maybe what in what And the share, in Darcy, done on broadly? provide category perspective you sense? this in sort label So looks like could has more to label perspective help categories just hoping in a private to if and you this ability to that

Yes. Yes.

less in than about So guess, private in is in X.X%. I label definitely it's it's -- category others. powders mature X%, this about -- It RTD,

and more not channels. that tracked realize Just in

-- that just most the So of for just category there's track channels powder less Powder. remember in

probably it, our So I for the call And at same RTDs estimates if thing where mean, look it's is, you whole are closer bars. to marketplace. powders, kind actually for X% of so XX% to

interesting what So -- the most it's for is, share. has what maintaining is part,

our So than it's the branded not category players. growing faster in

there -- And share. maintaining last the to labels for has are and This that are stronger you know, the just been -- private case private strong just years. it's there So less as happens few labels. be now

success the think retailer. the depends I on

in case. people look However, I would the that category, for that generally and -- and this has been say they trusted -- so And brands.

It's I I has say do went would label And been category, couple -- lot that bigger are a very others would with not I complicated the isn't and think I private dynamic and the think bars, RTDs in part where And successful. had think have Then I do of label to private have first. be to RTDs. has in retailers. it just -- concentrated was, last. of capacity powder we will to there say, within in that saw tried go the of at a least produce just first meaning it a RTDs

little of I think are so scared And a it.

you So reference context? some give does and that

Yes. I leave it that's there. extremely No, Darcy. helpful, can

the from with Yasmine line comes of Deswandhy question Bank America. of next Our

So quick Premier. had I on just a one

that with June to Club also you impact assortment? into the quantify mentioned in temporary in changes accelerate Are consumption channels able had the growth all So July. you being club of began said the you you in consumption to strong and exception. key And

hold in quantify to way any XQ And that further from there there? acceleration or accelerate is do So that? you to even expect

Okay.

Can you -- question a just a the there, time? more you Yasmine. were just there can give questions in lot one Sorry, say me of

Yes.

that the just So assortment club Premier? are in is of of first to the the channels being quantify to the all in relates changes question just weaker able of than rest it just of you as temporary impact kind the in of XQ

said And you QX...

you do Paul, to get want Yes. that.

Or want clarify. said Well, to want seeing just temporary sure. I QX? Are you QX? make to the in I you just changes

Yes.

Okay. Yes.

we did one the assortment changes in primarily in So start which early in in quarter with have quarter. customers, our to some the in club third and the largest fourth club of quarter, ship late did

of So we should was, see know number of precise the certainly, year-over-year headwind an of club move we that that to change have it I forward. in a what the I think QX but growth as don't we if impact impact had you're just QX, quarter the some as hit QX well and and seeing as out-of-stocks vastly as we which our later we other the in that QX. into some and late improved of the got customers, in club as growth

have And lower mean, expected. if X to say about would consumption QX percentage what saw. was higher what that I we Yasmine, I you're than would And thinking we think -- we consumption, our than about expected we that headwinds points

was So of and the due shipments to went that that delayed the out. combination some basically, --

of And and points for about products new that in. was to about stock point due of of was replenishment X of shipped being so part X out that

consumption. hopefully, around So X that with of points helps

it but to relates follow-up, quick had a household helpful. one penetration. question. growing I base And Okay. as pop-ups more that and audiences. an said to brand, on saw you just in higher-level is this York tend more quick there was a younger activation a skew Great. your target it's just towards and adult really previously recently consumer That's know I I that these New a

expect the just from bit penetration to that plan about to talk and address continued So household drive how here growth. you little a could you you consumers that

Yes.

you So ice-cream saw pop up. the

saw I that. Yes.

successful. That's Yes. very

so So yes, low penetration category, household household low penetration brand.

average call but our it, age ranges. right is early XXs, currently, So

them of will -- then early and we on bring get category younger kind to focus the them the our where keep population that trying we're And younger, can marketing we so campaign into throughout. to really

was was one can but you that seeing that -- kind activation, you'll tell, test it. So as of start one

Premier, for if As through next you're as we who our of campaign come just well show you efforts. out see we in see build can to that for creative marketing the the targeting year as it through going

Our with the comes next TD line of from Robert Cowen. Moskow question

think is didn't factors. points all that to you lower said was just for catch XXX Was Or I for consumption what I thought it. various than you Just clarify, club? about that channels? basis for

was the effect All most club channels, as of but well it food. the majority -- was some as

Okay. the at for -- it's that if relate think RTD, know shipments? really eyeballing expecting just and pattern be how that if major kind you a to -- October in you up in And trends some ask higher comps segment, of major of you are Because that? I filling difficult the you biggest think you XX%. then growth shipments gaps. than quarter, I reason could acceleration, Premier your acceleration would is get kind do And consumption you inventory this even look Slide Protein you're the general, tracked Do consumption in look X, still in would And and be XQ? need do fourth

can -- I latter. take do Yes, I'll the

Yes, that. do you can

our I in shipment my or to do the growth that outpace of outpaced out distributions. in before. and as getting pool, some slightly new of we shipments expect retailers' prepared we're and this the on mentioned So consumption remarks that's continuing but Darcy shipping to because stocks replenish growth inventories fourth touched also consumption remaining modestly growth quarter,

and some distribution. going So in bottles we've had other some

quarter. shipments in consumption modest ahead increase fourth or expect the a yes, of So

referencing, As far looking as at the think the you're you're I chart October time frame.

event. a small club called last event We have August year, it did in in So club we August.

XX-week rolling kind that you're It's October. impact of promotion. of the in mainly And to seeing that's the so what it as August gets

that for We and is on the contemplated bit around but quarter, a this consumption. guidance doing year. in versus headwind is We're us all are promotion, our it less lapping so days thinking a that in of fourth our shipments

And just Rob, to...

ahead, Darcy. Go

we that there ahead. is both are know focused. I Go --

first. Darcy, you go

CEO. are You

please. So ahead. Go

everybody lot that a is which I know consumption, why. I on Well, focused understand

a that kind Obviously, help the we July bit consumption at -- -- might like to some XX%. expect was to it of low but strong I little So give will in dynamics thought be really of we QX QX. And monthly overall expect that then teens. you

So you acceleration then that we'll you'll about. In August, should mainly it's expect in Paul the channels and untracked and promotion talking lapping that because was you [indiscernible] September. we're especially was expect, captured is and an see a consumption in see -- late dip, that but should of dynamics just is August, some club that into

the bit -- So you a see increase this promotion in down and of because Club August lapping come then in of September. strong July, again the

question with line next Palmer ISI. Evercore the Our of from David comes

Thanks, also for last point. and thanks that

a Just we volatility much and were been a how that. to we're in talked out at being retrospective maybe look to volatility last not this you of yours, perhaps do in flow constraints the constraints? related or how about had only volatile had as maybe have competitively. some easy past, than just that in and broaden we ebb assortment And addition points for a constraints the in key in your comparisons data sales do the seeing and on they a the about the competitor's that different in think capacity you you it's maybe But follow-up quarter. can also an to reset capacity making If then think different past,

governs coming seeing in that comments any comparisons be on the quarters. how even that we'll and that the Just

Yes.

lack our or trade within but patterns of our a reflection word exacerbated yes, use consumption lack of I or with, volatility, safety stock and to I'll -- hate changes are inventory. absolutely the So start the by

happened and was didn't to so The So was this had were reason out was time. some below what I've happens I'm we planning go what consumption mentioned in They July. Well, and were delayed until that associated timing, -- to the going give out. go June to shipments got in you consumption expected May. we that QX. all They pushed the

up show do has based some blunt of expect. basically inventory, trade changes don't kind consumption of have what it enough We we doesn't not, enough reflect in see changes. because of consumption. But safety or you the retailer it those to And because stock have these we releases on we the

trade as back we types So back just as see to of when I will are get you we which put to guess, adequate close, not as kind it. stock when -- of, we get these well safety we volatility inventory, adequate

do the enough, our is to is our category. driven from trade talked growth of and really, competitor, and as inventory, less The that safety coming trade well by us brands stock growth, is biggest retailers is our about is competition. all this brands, I of Interestingly mainstream growth as having category our the of our being the well, the second piece the the mainstream outside about completely mean, almost with I all --

So much there really is brands. not shifting brand X the very between

margins this for guidance. you on How it to EBITDA year. thinking something that the like finish that. looks judging in Thank the XX% could your your now? by are XX% margin term? you low long-term for just be long-term XXs above you'll Is And about longer that

in year keeping year a especially Premier having we're driving biggest obviously, not Yes. strong you -- margin yes, a We as Protein. on it's business, mind our still that on demand full -- mentioned,

normal. spend. we've but think how And of give on we the flexibility of reevaluate we'll on the We plays been our it new long-term part we'll our it. out to continue -- upper always in we've wouldn't But that don't that, XX% said obviously, target to November, that certainly part gives fiscal consistently something it's that, come our when thoughts I So be evaluating and our yes, on 'XX. upper to I was algorithm, But us it. on we're is think like

the line Stephens. Our next Jim from Salera with of comes question

wanted bit we RTD in you more in maybe category? brands see albeit but that pricing area? my I've for about little a other promotion price, maybe significant you smaller question from, maybe think kind competitors, of seen down two, that pretty cadence my alternating think competitors Midwest, in and broadly promotional in the or is, the about in Darcy, power area should a as category the on ceiling that have And the is shake drill more ability forward for a guess to increase that's club putting moving something I to concentrated as take between I offerings. promotions the first

of little on question, then first clarity need and one. a your might answer I second me the Let bit

all a and bit, not ]. X a MVM over So it's of but last, rest the -- the has kind little of on brand seems really And them, and year-ish. new is promotion actually that -- said. as there is that brands, yes, be say trend promotional call it, to increased always not [ the in somebody it's intensity club, really I top you been will

of more say, would I long-term kind trend. is, a that a of So

talked it rest marketplace, The of but been there, been second indicative on with definitely on. powders marketplace. the really across -- -- is RTD, the an in hasn't in the definitely in promotional where continued, and call extreme, this has uptick there for intensity last Powder I and And an as the about trend capacity on RTDs. there's I discounting do and as that and has on increase to think promotion sure, it been coming of it

a have little bit we that think I more capacity.

are to demand. get so able And back to people driving

the was second question? what sorry, And

Yes.

to how time. that as promo need on really kind this of that just and promos keep take part calendar value that gaps limit, just can promotional category power does there's a second gap on for roll was if that price The on a the even space, levers to in somebody given the there's of kind the on you of at always pricing limit you has much if always your relative because kind off promo

good of have for pricing No. constraints, with last shown very I we the talk performance given brand our incredibly despite capacity that us. high about we've power, of think over have strong consumers course -- business mean kind of really few think and the consistently I'll an brand. we're loyalty, that I just our feel with stayed we the I the and years I

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trial, TPR goes where it we displays, are from where repeat trial need the eyeballs as where as there, will we get get the we we there. to to, eyeballs, the do get we is little get So the the in the the display. Because of

focus. be periods. QX, drive So Everybody we major in into we that March. have our enters will really And X see -- Jan, the our category Feb,

we this and started period year drive got we to big a -- back promotion during that's QX. So

We and really again, period next think don't to or And it frequent. to deep period. go that we of then lighter as year. will we've will learned again second drive expect we it the because do be bit in a will I have kind also little a have QX

question line Andersen next from comes with the Our Blair. of Jon William

I shipments ahead was year? you there just could your run relative expectations perhaps that to is if bit wondering expectations question and fall resets last consumption fourth follow-up talk into about for quarter? And of is in the factored kind then your to little are shelf a capacity. how of on the And second

and You've incremental had top for now puts wondering maybe in your terms plan of base just capacity that. I'm secured XXXX? capacity growth in sales supporting some that where on you of

get last if great fair that presentation, did so you we to was actually, the space you combination big of Page TDPs retailer some the a We for that increases. graph look expect a -- and we fairly is show do -- increase around year, if expanded a amount. a will at a mass be supplemental QX, XX increases. There shelf

as got see we inventory in space then favorability didn't see that also retailer. And nice some year, the last we in in will from QX, a We QX. trade just filling dramatic fill as increase some more not gap did that little we but of we'll

going will shipping the out that be of for new part are increases left inventory in partially to it's and distribution. So for the trade filling of the be ones then

expect little this of QX. So in ahead consumption do prepared yes, do expect, and remarks, a to we bit we Paul said his in have shipments

we yes, to are safety really second incremental bill raise get our but sets capacity. not only It it, the which of going to and is quarter allows this And target that production weeks weeks guidance deliver that secured nicely. The is XXXX. -- stock, our up into us us actually also piece X

driving. So great to really we're ground running and the get place hit a in to demand back

with from Our comes next line of Truist the Chappell question Bill Securities.

basis products XXX seem the shipments talked was questions. club One, a your and as that. you expectations I consumption just X handle of about your to below it just on, why understand to the obviously, Just fully below channel. club and expectations a you channel lot understand points didn't good stuff trying have coming that from like and when I'm on

just help that. there something So understand intra-quarter? us was Or that surprised you

Yes.

Why go get Paul, don't -- So you ahead. it?

Yes. No.

little it earlier. Darcy a think touched on bit I

down comes to really timing of it So the shipments.

customers the as -- to other did of to expected. we well quarter some in the some shipments our have to and club bottles we of than some other of as So some into other just in later flavors. and happened ship distribution out-of-stocks refill It the new in

on that a so was to which, headwind a impact direct about growth. fourth mentioned a our And was moment XX consumption the consumption quarter, ago, had -- it in point basis a direct growth Darcy our as

XX% So if if at time. growth XX% consumption our that we you that, around that was put about were would had shipped on

stock time. the out, and We full those just what not we sometimes to fall at safety that's changes It's not quarter. when from you're It's have uncommon. in time internally, shipment timing things saw

follow-up. July why your I another impact And that and But is it. of because a timing have got of Got follow-up you then I then boost the have a shipments? did sales

I somebody would not say well, backup. it necessarily --

in saw more consumption start that getting as -- distribution largely and July, because well those filled So to us that of into trade. is as the out-of-stocks accelerate into you that June and getting

impact So July. which that into did June why have saw you and a on consumption further is in accelerate direct it

Got it.

I'm the the outside trying back category. playing especially and on of in then in couple real mean your your on pricing, customers to is most category new sourcing we as sandbox everyone well forward, just And follow-up but move my commentary just of pricing, Okay. you're the I

others thought drinks promotion And just and more their that Does about we promotional so pricing talking and of 'XX. as about categories. we of as hear levels energy process revive and your you into CSD's come fiscal think as move into kind to

they are I what a Bill, to up people outside they think what giving to up are to the this shake. think category, of are the comes trading -- buy I so -- they giving buy what

So are occasions most replacements. our instance, of for breakfast

bagel and in what Egg So out are cream is essence, an cheese, a et trading cetera. consumers McMuffin,

for those expensive are, shake. $X so than part, most things the a And more

breakfast. and we a not much where we only so see And healthy so expensive, have I that think it's -- I think more less but also it is is

all And so that's we I like that's why pricing of seeing, you're think say have power. where feel data that would we and our

with Our comes next Securities. question the Mizuho Baumgartner of John line from

now combination guess thinking evolve? caffeine. protein's not you First to innovation. touched ingredients energy off, nutrition. becoming the and and can powder? X to more development we about category ask broadly, you standardized, this And I X, similarly a formulations comment. assess drinks, ability including it with But think where long-term wanted I'm on evolve high-protein, Darcy, I what of the big-eye do And extent you're similarly, see do functions mean active here, between comment you to years, a I in X, as your how and fiscal low-sugar innovation with liquids on bit 'XX

is wide and and in of the first that of just how as of nutrient to variety as amazing learn innovation benefit it which ramifications is people, beneficial Well, which obviously kind I back we just the how think my about provides, well I the ramifications. the has more it also what has goes piece, the talked it about remarks, prepared to protein innovation

there much existing formats. pack it formula to different opportunity, that little there we about but big-eye in actually just kind why huge because different by packages of the is our -- in innovation, in eye the so you is by upside something which asked are So different know I encouraged actually, sizes a is reason innovation think such or I close so putting

and is places. protein you ton food. in the complement are those if I the world, other places, you what real from of into go into see mainstream combination that X, And -- that influence the a side influenced the you household with innovation. XX specialty, sports So part places years you to see One it look with is think GNC as where that nutrition. eye a when X, more the X that kind walk of gets is you those I potential. Then functional into there's you you big I penetration think a by of specialty mean And or shop you'll there's go a right? kind see kind out, ingredients. natural, the So of walk most. because going In X vitamin a like that part, if

But really that you an see So function. has also influence. then leaning into

And so go. will I think that's where the category

has capacity bottle opposed on supply club follow-up, Great. mass more of newer circumvent take single-serve But the as seeing I'm we're Tetra's of and entry. such to of extent of industry your as bottles And to competition and for the channels Tetra complaint opportunity. barrier a a players it the been a just terms in be in means extent which been And then standard curious some the to newer tightness a RTD. as and entrants can has major bottles. sort tightness adopting the to

bottles is really constrained upstream -- think what it is constrained. the processing. And aseptic is also that So is I

that's same processing seeing. And the the it time formats see But and think So the the bottles capacity that for put for format, there I so our general, and of think opening being whether talk it of the potential capacity see is a with. in what in business, one part about the we when potential that of up, Tetra bigger -- for is shakes, potential numbers constrained. aseptic is of see us, you or we growth not is actually I yes, for that bottle because I is see that but Tetra, in bottles capacity, that a -- opportunity a is that you're a us, we the upstream the smaller growth it's we is bottle actually that the

questions call. further in Ladies the participation. conference concludes and gentlemen, I'm today's showing Thank for no you This your queue.

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