BellRing Brands NYSE: BRBR reported second-quarter fiscal 2026 results that management said came in below expectations, citing a tougher competitive and consumer environment that pressured mix and profitability. President and CEO Darcy Davenport said the company was “disappointed with our results” as “multiple dynamics pressured our financial results,” including a shift toward promoted sales, higher freight costs, and an inventory-related charge.
Quarterly results reflect mix shift, freight, and an inventory charge
CFO Paul Rode said total net sales increased 2% year over year to $599 million, while adjusted EBITDA was $54 million. Adjusted EBITDA margin was 9%, which Rode said was “400 basis points below our guide of 13%.” He attributed 190 basis points of the variance to an $11 million inventory-related charge, with the remainder driven primarily by Premier Protein RTD composition and higher-than-expected freight costs.
Adjusted gross profit was $136 million, and adjusted gross margin was 22.7%, down from 34.5% a year ago. Rode said the year-over-year decline was driven by input cost inflation (including tariffs), unfavorable price mix, higher freight, and the inventory-related charge. SG&A was $92 million, or 15.3% of sales, and included higher advertising investment, which he said was up 140 basis points as a percentage of sales.
Promotions intensified as consumers became more price sensitive
Davenport described a category backdrop that remains strong in terms of growth but has shifted toward heavier promotions and greater price sensitivity. She said the ready-to-drink (RTD) shake category is still “up 8%,” and household penetration continues to rise, but BellRing observed “a contraction in RTD shake spend per household,” which she called the “first decline in buy rate in five years.”
She said the promotional environment stepped up materially in the quarter, noting that “27% of RTD shake category volumes were sold on price promotion, up 8 percentage points versus last year,” and added that newer, smaller entrants have been investing aggressively. In response, BellRing is choosing to “continue to invest in promotion and advertising to defend share and support our long-term growth,” even as profitability is pressured.
In Q&A, Davenport said the increase in promotion and lifts appeared macro-driven, tied to consumer affordability pressures, while also acknowledging a “perfect storm” of competitive intensity and inflation. She added that price sensitivity is showing up across channels, but is “most acute in club,” where BellRing said competition and promotional lifts are highest.
Brand performance: Premier steady, Dymatize pressured by elasticities
Management said net sales grew 2% overall. Davenport said Premier Protein net sales were in line, while Dymatize sales fell 2%. Rode reported Premier Protein net sales grew 1.7%, with RTD shake net sales up 2.3%.
Premier shake volumes increased 12% in the quarter, which Rode said was offset by “unfavorable price mix of 9%,” driven by higher promoted volumes and lower baseline volume. Davenport said Premier RTD net sales increased 2.3% with “double-digit volume growth mostly offset by price mix declines.”
Davenport also pointed to channel differences, saying consumption outside of club “continues to be strong, up 15%,” with mass up “high-teens” due to distribution gains and incremental promotion. Still, she said the company saw “softer velocities in non-promoted weeks and retailers,” reflecting consumers’ increased reliance on promoted pricing and value-oriented options.
Demand drivers: distribution, advertising, and new product innovation
Davenport said the company is continuing to push distribution and expects “double-digit TDP growth in 2026,” with single-serve bottles contributing meaningfully to those gains. She noted that while single-serve is “not as productive as larger pack sizes,” it supports trial and display strategy.
On marketing, Davenport said BellRing increased advertising and updated creative with the “Go Get ’Em” campaign launched in late December. She said early indicators include lifts in awareness and brand equity as well as increased traffic to BellRing’s website and e-commerce pages, and that the company’s analysis indicates “strong ROI and incremental sales.” BellRing expects to maintain advertising investment at about 4% of sales, though Davenport cautioned near-term returns may be “more tempered” given the competitive promotional environment. Rode reiterated the company is maintaining advertising investment at “approximately 4% of sales for the full year.”
On innovation, Davenport said BellRing plans to launch two new offerings in the fourth quarter based on a demand study highlighting “performance protein” and “refreshing protein” white spaces:
- Premier Protein Ultimate: a 42-gram shake aimed at the “40+ protein gram segment,” offered in multi-packs and single-serve bottles, launching in mass, e-commerce, and select food retailers.
- Premier Protein Sparkling Soda: a 15-gram protein sparkling beverage in cans, offered in four fruit flavors with a “very clean label with only 5 ingredients,” launching with a significant mass retailer, e-commerce, and other FDM retailers, supported by displays, retail media, and social media.
In response to questions about shelf impact and economics, Davenport said the new items are expected to be “incremental on the shelf.” Rode said innovation economics vary, with newer items typically starting at lower margins due to smaller scale, but improving as volume grows.
Updated outlook: lower sales growth and margin pressure from costs and trade spend
BellRing lowered its full-year fiscal 2026 outlook. Davenport said the company now expects net sales growth “of flat to up 2%,” and adjusted EBITDA margin around 14%, including “50 basis points of impact from the Q2 inventory-related charge.” Rode provided updated guidance of net sales of $2.325 billion to $2.365 billion and adjusted EBITDA of $315 million to $335 million, implying an adjusted EBITDA margin of approximately 14% to 14.5% excluding the inventory-related charge.
Rode said the company now expects second-half net sales growth of about 1%, versus 8% implied in the prior guide, driven by reduced baseline velocity assumptions for Premier Protein RTD and added promotional activity in the fourth quarter that increases trade spend and pressures mix. He said the company expects second-half margin of about 15% versus 20% implied previously, citing several drivers:
- Higher freight and protein costs (about 200 basis points)
- Unfavorable mix and increased trade investment (about 160 basis points)
- Lower cost savings and other manufacturing costs (about 60 basis points)
- Lower SG&A leverage (remainder)
For the third quarter, Rode said BellRing expects net sales growth to be down about 1% year over year, with Premier declining slightly and Dymatize growth offsetting some of the decline. Third-quarter adjusted EBITDA margin is expected to be approximately 16%, reflecting year-over-year commodity and freight inflation, tariffs, and higher advertising.
Management also discussed inflation trends, with Davenport and Rode highlighting higher freight costs and accelerating protein-driven inflation. Rode said the “big new news” was a significant rise in non-fat dry milk pricing, a key input for milk proteins used in shakes, with some impact in the latter part of fiscal 2026. Davenport said that as inflation rises, “base pricing across the category” is likely to increase over time, though she did not specify timing beyond noting that pricing “has to follow” given the size of cost increases.
On cash flow and capital allocation, Rode said the first half was a modest use of cash in line with expectations, and BellRing ended the quarter at net leverage of 3x. The company repurchased $26 million of shares in the second quarter and expects strong cash flow generation in the second half, while also anticipating payment of a legal settlement in the fourth quarter and leverage remaining in the low 3s for the rest of fiscal 2026.
About BellRing Brands NYSE: BRBR
BellRing Brands, Inc is a consumer packaged goods company specializing in high‐protein, better‐for‐you nutrition products. Formed in March 2020 as a spin‐off from Post Holdings, the company focuses on delivering convenient protein solutions to health‐conscious consumers through a portfolio of well‐known and emerging brands.
The company's product offerings include ready‐to‐drink protein shakes, protein powders, nutrition bars and other performance nutrition items. BellRing Brands' flagship brands include Premier Protein, a line of shakes and bars designed for everyday protein supplementation, as well as Dymatize and PowerBar, which cater to athletes and active individuals seeking advanced sports nutrition formulas.
BellRing Brands markets its products primarily across North America, leveraging relationships with major retailers, wholesale clubs and e-commerce platforms to reach consumers in the United States and Canada.
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