BellRing Brands, Inc.

Q3 net sales increased 4%. Premier Protein brand and RTD shake net sales increased 1%, with shake volume up 3%, price/mix down 2%, and dollar consumption up 6%. Dymatize net sales increased 27%, with volumes up 6% and price/mix up 21%. Adjusted gross profit was $158 million and adjusted gross margin was 27.7% versus 35.1% a year ago. SG&A was $94 million, or 16.4% of sales, including a $7 million advertising increase and a $5 million organizational realignment charge. Operating cash flow was $79 million and net leverage ended at 3.2x. For FY26, management now expects net sales of $2.335 billion-$2.375 billion, adjusted EBITDA of $275 million-$295 million, and a margin of approximately 12%. The outlook includes $28 million of unfavorable inventory-related impacts, with $21 million already recorded in Q2 and Q3, and tariffs are expected to be an 80 basis point margin headwind for the year. For Q4, net sales are expected to be flat at the midpoint and adjusted EBITDA margin is expected to be approximately 10%.

Mike Axelrod struck an upbeat but candid tone, saying he sees BellRing’s category and brand strength as durable even though current performance has been hurt by transitory factors. He emphasized that Premier Protein remains the category leader with strong consumer demand and a long runway for growth, but said execution has not been consistent enough and that he is focused on listening, improving accountability and building a more disciplined operating model. He framed the near-term challenges as manageable and said he expects to share more on strategic priorities and 2027 guidance on the next call.

Paul Rode focused on the drivers behind the quarter and the recovery plan. He said Q3 beat on sales and consumption, but margins missed due to inventory-related headwinds, higher freight costs and protein inflation; adjusted gross margin was 27.7% versus 35.1% last year. He detailed $28 million of unfavorable inventory-related impacts in FY26, $10 million to $12 million of annualized savings from the June organizational realignment, and a year-end net leverage expectation of about 4x due to a sizable legal settlement in Q4. He also said freight rates stepped up sharply in Q3 and are expected to remain elevated into Q4 and carry a bit into next year, while whey and milk protein costs are still expected to stay elevated.

Analysts pressed on whether FY26 is a trough, whether BellRing needs more ongoing marketing support, and how pricing can offset cost inflation without hurting volume. Management said FY26 is not the new normal, expects FY27 margins to improve, and pointed to a double-digit Premier shake price increase plus pricing on Dymatize powders, along with productivity and reorganization savings. Questions also focused on the cause of excess bottle inventory, with Paul Rode explaining that tetra packs cannibalized bottles more than expected and that demand and supply planning did not react quickly enough, leading to a $10 million reserve and Q4 trade spend to clear inventory. On innovation and distribution, management highlighted the launch of Premier Protein Ultimate and Sparkling Soda, plus targeted regional DSD expansion into convenience and continued gains in FDM and e-commerce.