BellRing Brands (BRBR) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 increased 16% year-over-year to $515.4 million, driven by strong Premier Protein volume growth, record household penetration, and distribution gains, while Dymatize saw a slight sales decline.

• Net earnings rose 66% to $73.7 million, with operating profit up 47% to $111.6 million, reflecting lower raw material costs and higher sales.

• Gross profit margin improved to 36.8%, up 630 bps year-over-year, aided by input cost deflation and a mark-to-market gain on commodity hedges.

• Management raised FY2024 net sales guidance to $1.96–$2.0 billion and Adjusted EBITDA to $430–$440 million, citing strong Q3 performance and improved visibility.

• Incremental shake production capacity was secured for Q4, enabling inventory replenishment and positioning for strong FY2025.

Financial highlights

• Gross profit for Q3 2024 was $189.9 million, with gross margin at 36.8%.

• Adjusted EBITDA reached $120 million for the quarter, with a margin of 23.2%.

• Diluted EPS for Q3 was $0.56, up from $0.33 in Q3 2023.

• Cash flow from operations was $69 million for the quarter and $160 million year-to-date.

• Net debt at quarter-end was $776 million, with net leverage at 1.8x.

Outlook and guidance

• FY2024 net sales guidance raised to $1.96–$2.0 billion; Adjusted EBITDA to $430–$440 million.

• Projected FY2024 growth: net sales +18–20%, Adjusted EBITDA +27–30% over FY2023.

• Q4 net sales growth expected at 14% (midpoint), with Premier Protein as the main driver.

• FY2025 initial estimates target the high end of the long-term net sales growth algorithm (10%-12%).

• Fourth quarter gross margins expected to improve year-over-year, but higher marketing spend will slightly reduce adjusted EBITDA margins.