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    BRBR
    Earnings call· Jun 2026(Q3 FY26)

    BELLRING BRANDS Q3 FY26 earnings call BRBR

    Aug 4, 2026 Source

    Executive summary

    BellRing Brands Q3 FY26 — Strong Sales & Consumption Offset by Margin Pressures

    BellRing Brands reported strong Q3 FY26 net sales and consumption, exceeding expectations for both Premier Protein and Dymatize. However, adjusted EBITDA margins were pressured by inventory-related charges and elevated freight costs, leading to a revised full-year outlook. The company is implementing a double-digit price increase for Premier shakes and other initiatives to restore profitability and improve execution, with new CEO Michael Axelrod focusing on supply chain excellence and disciplined investment.

    Highlights

    5

    • Net sales increased 4% in Q3, with both Premier Protein and Dymatize exceeding expectations.

    • Premier Protein shake volume grew 3% in Q3, with dollar consumption up 6%.

    • Dymatize net sales were up 27% in Q3, driven by 6% volume growth and 21% price/mix.

    • Premier Protein household penetration reached almost 23%, with consistently highest repeat rate in category.

    • Organizational realignment expected to generate $10M-$12M annualized run rate operating expense savings.

    Concerns

    5

    • Adjusted EBITDA margins were below guidance in Q3, reflecting inventory-related headwinds and higher freight costs.

    • Q3 adjusted gross margin declined to 27.7% from 35.1% a year ago, driven by protein/freight cost inflation and a 180 bps inventory charge.

    • Full-year adjusted EBITDA outlook includes $28M of unfavorable inventory-related impacts, with $21M recorded in Q2/Q3.

    • Freight rates have risen sharply, incrementally weighing on second half margins by approximately 140 bps.

    • Q4 adjusted EBITDA margin expected to be approximately 10%, reflecting seasonal promotions, commodity/freight inflation, and 100 bps inventory actions.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year Net Sales
    $2.335 billion to $2.375 billion
    high materiality
    High
    Full-year Adjusted EBITDA
    $275 million to $295 million
    high materiality
    High
    Full-year Adjusted EBITDA Margin
    approximately 12%
    high materiality
    High
    Q4 Net Sales
    flat at the midpoint
    medium materiality
    High
    Q4 Premier Protein Sales
    up low single digits
    medium materiality
    High
    Q4 Premier Shake Consumption
    up mid-single digits
    medium materiality
    High
    Q4 Dymatize and All Other Sales
    down mid-single digits
    medium materiality
    High
    Q4 Adjusted EBITDA Margin
    approximately 10%
    high materiality
    High
    Net Leverage
    approximately 4x
    medium materiality
    High
    Premier Shakes Price Increase
    double-digit
    high materiality
    High
    Powders Price Increase
    third round
    medium materiality
    High
    Organizational Realignment Annualized Savings
    $10 million to $12 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Premier Protein
    Sales growth trailed consumption primarily due to e-commerce promotional timing, a greater promotional impact on net sales and retail consumption, and modestly lower trade inventory. Consumption benefited approximately 1 percentage point from a promotional timing shift.
    Shake volume: up 3%Price/mix: down 2%Dollar consumption: up 6%
    		increased 1%1%——
    Dymatize
    Reflected inflation-driven price increases implemented earlier this year. Saw higher consumer demand primarily in e-commerce and international channels and benefited from distribution gains in overseas markets.
    Volume: up 6%Price/mix: up 21%
    		up 27%27%——

    Operational metrics

    19
    Adjusted Gross Profit
    $158 million
    Q3 FY26
    Adjusted Gross Margin
    27.7%down from 35.1% YoY
    Q3 FY26

    The year-over-year decline was driven by significant protein and freight cost inflation, including tariffs. Additionally, we recorded a charge in Q3 on excess bottle shake inventory.

    SG&A Expenses
    $94 million
    Q3 FY26

    Includes a $7 million advertising increase and a $5 million charge related to organizational realignment.

    Advertising Investment Increase
    $7 million
    Q3 FY26

    Part of SG&A expenses.

    Organizational Realignment Charge
    $5 million
    Q3 FY26

    Treated as an adjustment to EBITDA.

    Full-year Advertising Investment
    approximately 4%
    FY26

    Full year outlook continues to reflect this investment level.

    RTD Shake Category Volumes Sold on Price Promotion
    70%in line with historical norms
    Q3 FY26

    Relatively in line with historical norms for this period after adjusting for the shift of a major e-commerce promotion, while down sequentially from the heavier promoted second quarter.

    Premier Household Penetration
    almost 23%
    Q3 FY26

    Household penetration continues to grow for both the protein shake category and Premier shakes.

    Shake Repeat Rate
    consistently the highest
    Q3 FY26

    Premier shake repeat rate consistently the highest in the category.

    TDP Growth
    double digits
    FY26

    Remain on track to grow TDP double digits in fiscal 2026.

    Net Leverage
    3.2x
    end of Q3 FY26
    Full-year Inventory-related Impacts
    $28 millionunfavorable
    FY26

    The remainder primarily relates to targeted trade spend anticipated in our fourth quarter to support excess bottle inventory sell-through.

    Full-year Tariffs Headwind
    80 basis point
    FY26

    Expected margin headwind for the year.

    Second Half Freight Costs Headwind
    approximately 140 basis pointsincrementally weighing on margins
    H2 FY26

    Freight rates have risen sharply since May earnings call and are expected to remain elevated.

    Q4 Inventory-related Actions Headwind
    approximately 100 basis points
    Q4 FY26

    Headwind to the adjusted EBITDA margin rate in the quarter.

    Whey Protein Costs Outlook
    remain elevated
    FY27

    Supply-demand is still very tight on whey proteins, so those trends are expected to largely continue.

    Milk Protein Costs Inflation Outlook
    mid-single-digit rangeincremental inflation beyond FY26
    FY27

    Still expecting inflation from milk proteins and shake business going into '27.

    Protein Coverage
    6 months or so
    FY27

    Typically covered out 6 months on proteins.

    Elasticities from Price Increase
    slightly greater than 1
    FY27

    Expected for volume-related elasticities following the double-digit price increase on Premier shakes.

    Industry KPIs

    4
    MetricValueDetails
    Channel mixdouble digits
    Underlying sales growthhigh single digits%
    Brand marketing investmentapproximately 4%% of sales
    Productivity cost savings program$10 million to $12 millionUSD

    Product announcements

    2
    ProductTypeDetails
    Premier Protein 42-gram Ultimate Shakelaunch
    Premier Protein Sparkling Sodalaunch

    Capital programs

    1
    Organizational realignmentcompleted
    Period spend: $5 million charge
    Start: late June

    Benefit: annualized run rate operating expense savings of $10 million to $12 million

    The organizational realignment was announced in late June. A $5 million charge was recorded in Q3 FY26. It is designed to simplify the business, reduce structural costs, and improve execution discipline, with the majority of savings expected in fiscal 2027.

    Risks & headwinds

    5
    Inventory-related headwindsQ3 FY26, Q4 FY26, FY26

    Adjusted EBITDA margins were below our guidance, reflecting inventory-related headwinds. Q3 inventory-related charge was a 180 basis point headwind to gross margin. Full-year adjusted EBITDA outlook includes $28 million of unfavorable inventory-related impacts, $21 million of which have already been recorded in Q2 and Q3. Q4 inventory-related actions expected to be approximately 100 basis points headwind to adjusted EBITDA margin.

    Mitigation: Recorded a charge in Q3 on excess bottle shake inventory. Targeted trade spend anticipated in Q4 to support excess bottle inventory sell-through, reflecting a prudent decision to optimize those levels ahead of year-end. Working to strengthen planning capabilities and end-to-end supply chain processes to improve inventory management.

    Higher freight costsH2 FY26

    Incrementally weighing on second half margins by approximately 140 basis points. Freight rates have risen sharply since May earnings call and are expected to remain elevated.

    Mitigation: Incorporated into revised guidance. Expect freight to carry a bit into next year.

    Sustained inflationary pressure in key input costsFY26, FY27

    Protein and freight cost inflation drove year-over-year decline in adjusted gross margin. Expect whey protein rates to remain elevated throughout next year. Expect milk protein inflation in the mid-single-digit range for FY27.

    Mitigation: Announced a double-digit price increase on Premier shakes and additional pricing on powders, both effective in Q1 FY27. These actions are necessary to offset sustained inflationary pressure and support a healthier margin profile.

    Highly competitive environmentOngoing

    Competition has increased in the attractive, growing category. 70% of RTD shake category volumes were sold on price promotion in Q3.

    Mitigation: Focused on restoring a stronger profit trajectory and delivering more consistent results in FY27. Taking decisive actions across pricing, channel mix, productivity, and supply chain capabilities. Investing in advertising, distribution expansion, and innovation.

    Cannibalization of bottle business by tetrasQ3 FY26

    Cannibalization of bottle business by tetras in the e-commerce channel ended up being a bit more than expected, contributing to excess bottle inventory.

    Mitigation: Demand team didn't lower demand fast enough; supply team didn't pull down supply fast enough (implying future process improvements). Targeted trade spend in Q4 to sell through excess bottle inventory.

    What to watch in Q4 FY26

    5

    Premier Protein Shake Pricing Impact

    Q1 FY27
    Currentdouble-digit price increase announced
    Targetoffset inflation, elasticities >1

    Why it matters

    Critical for restoring healthier margins and profitability in FY27.

    First, we have announced a double-digit price increase on Premier shakes and additional pricing on powders, both effective in our first quarter of fiscal 2027. We believe these actions are necessary to offset sustained inflationary pressure in key input costs and support a healthier margin profile over time⏳. With this price increase, we expect volume-related elasticities to be slightly greater than 1.

    Q&A highlights

    5

    Is FY26 a trough in performance and profitability, and where do margins settle in FY27 and beyond, considering ongoing marketing and pricing ability?

    Paul Rode stated that FY26 is not the new normal for margins, expecting improvement in FY27 due driven by non-recurring inventory impacts (120 bps headwind in FY26) and initiatives like pricing and productivity. Mike Axelrod added that he needs more time to assess the structural earnings power of the business.

    “So we do not see '26, obviously, as our new normal for our margins. In fact, we -- as we said on our prepared remarks, we expect '27, our EBITDA margins will improve.”

    asked by Andrew Lazar · answered by Paul Rode

    2 min read5 chapters

    Detailed Narrative

    01

    New CEO's Vision and Focus

    Michael Axelrod, in his seventh day as CEO, outlined his focus on improving execution, operations, and speed to market, emphasizing consumer-centricity and strong customer partnerships. He sees significant opportunities to translate category leadership into consistent, profitable growth, particularly through supply chain excellence and disciplined investment. Axelrod plans to spend the coming months listening to employees, customers, and partners to identify improvement areas and empower teams.

    02

    Strategic Actions for FY27

    The company is taking decisive actions, including a double-digit price increase on Premier shakes and additional pricing on powders, both effective Q1 FY27. These measures are intended to offset sustained inflationary pressure in key input costs and support a healthier margin profile. Management anticipates volume-related elasticities to be slightly greater than 1 following these price increases.

    03

    Channel Diversification and Innovation

    BellRing is actively diversifying its business across channels, categories, and product segments. They expect meaningful distribution gains in FDM and e-commerce channels in FY27. In convenience, a disciplined regional DSD expansion is underway, targeting core 30-gram shakes and the new 42-gram Premier Protein Ultimate product. The launch of Premier Protein Sparkling Soda further expands into the refreshment category, creating new distribution opportunities.

    04

    Productivity and Supply Chain Improvements

    Several productivity initiatives, including cost savings programs and an organizational realignment completed in late June, are designed to simplify the business, reduce structural costs, and improve execution discipline. These actions are expected to generate $10M-$12M in annualized operating expense savings, with the majority realized in FY27. Efforts are also focused on strengthening planning capabilities and end-to-end supply chain processes to enhance inventory management.

    05

    Category and Brand Health

    The protein category maintains healthy fundamentals with strong consumer demand, expecting high single-digit fiscal year growth primarily driven by volume. Premier Protein's household penetration has reached almost 23%, boasting the highest repeat rate in the category. Despite increased competition, 70% of RTD shake volumes were sold on price promotion in Q3, reflecting continued value-seeking behavior and elevated promotional activity during peak seasons.

    AI-generated summary of the company’s earnings call. Not investment advice.