BellRing Brands, Inc.

Hello. Thank you for standing by. Welcome to Bell Ringbrand's third quarter fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message and it's raised. To withdraw your question, please press star 1-1 again. 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. With me today are Darcy Davenport, our president and CEO, and Paul Rhode, our CSO. Darcy and Paul will begin with prepared remarks, and afterwards, we'll have a brief question and answer session. The press release and supplemental slide presentation that support these remarks are posted on our website, and both the investor relations and the SEC filing sections at bellring.com. In addition, the release and slides are available on the SEC's website. Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. As a reminder, this call is being recorded and an audio replay will be available on our website. And finally, this call will discuss certain non-GAAP measures. For reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Darcy.

Thanks, Jennifer, and thank you all for joining us this morning. I have four key messages today that I want you all to walk away with. The first, I'm happy to share that we had a strong quarter. The business continues to perform as we bring on new shake capacity and begin to drive demand. Net sales grew 16% over prior year and adjusted EBITDA up 38%. We saw strength in Premier Protein with net sales at 20%. Our EBITDA margins were above our expectations as we benefited from favorable gross margins. I'm proud of our year-to-date performance with each quarter delivering above our long-term algorithm. My second message. Premier Shake demand remains strong. The RTD Shake category continues to grow with Premier Protein bringing in new consumers. Our consumption grew 10% in Q3 and accelerated to 20% in July. Premier Protein hit an all-time high in household penetration and remains the highest in the RTD category, outpacing its nearest competitor by six percentage points. We have the number one velocity skew across entire RTD category and 80% of our products. rank in the top third. We continue to believe that the brand has a ton of untapped potential given we haven't started meaningful marketing or innovation. My third message, our production delivered to plan and our outlook has improved. Our diversified command network has consistently delivered to expectations every quarter this year, and I'm happy to share that we have secured incremental capacity in Q4. This additional production enables us to fill remaining customer inventory gaps and allows us to rebuild our internal inventories to our target safety stock levels, setting us up for a strong fiscal 25. I would be remiss if I didn't give a huge shout out, or as we say, ring the bell, for our entire organization, but especially the sales and operations teams. It is challenging to manage a rapidly growing business in a dynamic category, but it is incredibly hard to do it with limited safety stock when there is little room for error. So thank you all for your hard work. What we have learned will benefit us for years to come. My last message really is a culmination of the first three. Our better than expected Q3 performance, confidence in demand, and increased Q4 performance production drove our decision to raise our outlook for the year. We now expect net sales to go 18 to 20% over fiscal 23 and adjusted EBITDA to grow 27 to 30%. We are proud of our performance to date and encouraged by our momentum going into 2025. While certainly not finished with our planning process, our initial estimates for next year are to deliver at the high side of our long-term net sales growth algorithm of 10 to 12%. We will provide more details on fiscal 25 outlook in November. Now to get a bit deeper into the category and brand highlights. The convenient nutrition category grew 7% in Q3 and all forms saw stronger growth versus Q2. Ready to drink led the category up 11% driven by strong velocities and distribution gains. Mainstream RTD brands continue to drive most of the growth and are bringing in new consumers into the category. Ready to Mix grew 8%, boosted by feature and display activity. Protein continues to have incredible tailwinds and high relevance with a broad swath of consumers. It is beneficial for almost every age, depending on their nutrition and health goals. It is rare to have a nutrient that is equally as critical for a child, a teenager, a pregnant woman, an athlete, and an aging adult, while providing a wide variety of benefits, ranging from muscle building to weight management. The more we learn, the more our teams get excited about our future, our future potential given our brand's mainstream appeal. Turning to our brands. Premier Shake consumption growth remained strong this quarter at 10% with volumes at 14%. Growth was robust in mass, food, and e-commerce driven by strong velocities and distribution expansion in mass and food. Club was the outlier with flat dollar consumption growth. versus a year ago because of temporary changes in our assortment and flavor specific out of stocks. Encouragingly, Club's consumption returned to growth in July and overall consumption grew 20%. Our brand metrics remained healthy. Premier Protein with RTD market share of 21% maintained its position as the number one brand in the RTD segment as well as the number one brand in the broader convenient nutrition category. Both market share and TDPs grew throughout the quarter, with TDPs up 13% versus Q2. Expansion in form, including bottles and pack size, along with improved in-stocks, drove the distribution gains, and we expect further TDP growth in Q4. As I referenced at the beginning, I'm pleased to see the brand reach another all-time high in household penetration, with 19% of households drinking Premier Protein. We surpassed our goal for the year, adding roughly three percentage points of household penetration in fiscal 24, with repeat and buy rates continuing to hold steady. Premier Protein continues to bring in new category consumers with almost all of our growth coming from outside the category. All of this is especially encouraging because in a high growth category with low household penetration, we see plenty of room to continue to grow our brand and expand the category. Premier Protein Powder continued its strong trajectory, growing 44% in Q3 behind distribution gains and strong velocities. In fact, at a major mass customer, we have the number one velocity item in the retailer's powder category. We remain encouraged by the growth potential of the Premier Protein brand in this format and are investing more marketing dollars behind it in Q4. Its household penetration reached 1.8% this quarter. and we continue to believe the brand will be a contributor in mainstreaming the powder category in the same way Premier did for the ready-to-drink category. Turning to Dymatize. The brand remains one of the strongest in the category with velocities in the top third at key customers. However, US consumption, which covers about 60% of the global brand, was challenged this quarter as a result of tough comparables, continued competitive pressures, and ongoing softness in the specialty channel. Despite these headwinds, July had a record e-commerce promotion showing there's still a ton of excitement for the brand. It is also worth noting that Dymatize's international business, which represents about 30% of the brand, continues to be strong with net sales of 18% this quarter. Looking forward, we are increasing investment behind Dymatize in the U.S., both in marketing and promotion. Our national marketing campaign with San Francisco All-Pro running back Christian McCaffrey launches this month. We are excited to see what this type of top-tier spokesperson and amazing creative can do for the brand. Overall, we continue to be bullish on the mainstream powder potential with two complementary brands. In closing, I am proud of our year-to-date progress. We were on track to deliver results ahead of our guides last November. Our confidence in the long-term outlook for Bellring brands remains high. Ready-to-drink and powder segments are in the early stages of growth with major tailwinds. Premier Protein and Dymatize are leading mainstream brands with low household penetration and strong loyalty, with Premier Protein maintaining the number one share position in the category. Our momentum continues to grow on shakes as we start to drive demand. Our capacity plan is on track to support many years of robust growth. I'm excited to see our organization pivot from supply focused to demand driving. At our core, we are a growth company. So our entire organization is eager to have all of our demand drivers in place for 2025, including our national marketing campaign on our biggest brand. Thank you for your interest in the company. We look forward to providing more specifics around fiscal 25 next quarter. I will now turn the call over to Paul.