Bellring Brands Inc.
02/03/2026 | Press release | Distributed by Public on 02/03/2026 12:56
Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of BellRing Brands, Inc. and its consolidated subsidiaries. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included herein, our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and the "Cautionary Statement on Forward-Looking Statements" section included below. The terms "our," "we," "us," "Company" and "BellRing" refer to BellRing Brands, Inc. and its consolidated subsidiaries.
OVERVIEW
We are a consumer products holding company operating in the global proactive wellness category and are a provider of ready-to-drink ("RTD") protein shakes and powders. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are Premier Proteinand Dymatize.
Market Trends
During fiscal 2025 and continuing into fiscal 2026, input costs, including raw material, packaging and manufacturing costs, have faced inflationary pressures, including from the impact of tariffs beginning in fiscal 2026. In addition, we anticipate that announced tariffs, and any potential future modifications or incremental tariffs, could increase supply chain challenges, commodity cost volatility and consumer and economic uncertainty due to rapid changes in global trade policies. We expect these trends to have a materially adverse impact on our results of operations if we are unable to mitigate the impact on our business.
For additional discussion, refer to "Liquidity and Capital Resources" and "Cautionary Statement on Forward-Looking Statements" within this section.
RESULTS OF OPERATIONS
| Three Months Ended December 31, | Change in | ||||||||||||||||||||||
| dollars in millions | 2025 | 2024 | $ | % | |||||||||||||||||||
|
Net Sales
|
$ | 537.3 | $ | 532.9 | $ | 4.4 | 1 | % | |||||||||||||||
|
Operating Profit
|
$ | 78.5 | $ | 115.3 | $ | (36.8) | (32) | % | |||||||||||||||
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Interest expense, net
|
20.0 | 14.4 | 5.6 | 39 | % | ||||||||||||||||||
| Income tax expense | 14.8 | 24.0 | (9.2) | (38) | % | ||||||||||||||||||
| Net Earnings | $ | 43.7 | $ | 76.9 | $ | (33.2) | (43) | % | |||||||||||||||
Net Sales
Net sales increased $4.4 million, or 1%, during the three months ended December 31, 2025 compared to the prior year period. Salesof Premier Proteinproducts were down $5.7 million, or 1%, on flat volumes, driven by lower average net selling prices due to incremental promotional investment. Sales of Dymatizeproducts were up $9.9 million, or 16%, driven by 30% higher volumes primarily due to higher international volumes. Average net selling prices decreased due to unfavorable product mix. Sales of all other products were up $0.2 million.
Operating Profit
Operating profit decreased $36.8 million, or 32%, during the three months ended December 31, 2025 compared to the prior year period. Thisdecrease was primarily driven by higher net product costs of $35.9 million (primarily driven by higher raw material and manufacturing costs), partially offset by reduced advertising expenses of $2.7 million.
Interest Expense, Net
Interest expense, netincreased $5.6 million during the three months ended December 31, 2025 compared to the prior year period primarily due to higher outstanding borrowings under our Revolving Credit Facility (as defined in "Liquidity and Capital Resources" below). The weighted-average interest rate on our total outstanding debt was 6.9% and 7.0% for the three months ended December 31, 2025 and 2024, respectively. See Note 12 within "Notes to Condensed Consolidated Financial Statements" for additional information on our debt.
Income Tax Expense
Our effective income tax rate was 25.3% and 23.8% for the three months ended December 31, 2025 and 2024, respectively.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended December 31, 2025, we borrowed $180.0 millionand repaid $80.0 millionunder our revolving credit facility (the "Revolving Credit Facility") provided for under our amended credit agreement (the "Credit Agreement"). As of December 31, 2025, we had $147.6 million of available borrowing capacity, including $2.4 millionletters of credit outstanding under the Revolving Credit Facility. Letters of credit are available under the Revolving Credit Facility in an aggregate amount of up to $20.0 million. Our Credit Agreement provides for potential incremental revolving and term facilities at the Company's request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.
During the three months ended December 31, 2025,we repurchased 3.0 million shares of our common stock at an average share price of $31.95 per share and at a total cost, including any accrued excise tax and broker's commissions, of $97.8 million.
We expect to generate positive cash flows from operations over the next twelve months and believe our cash on hand, cash flows from operations and possible future credit facilities will be sufficient to satisfy our future working capital requirements, purchase commitments, research and development activities, debt repayments (including interest payments), share repurchases and other financing requirements for the foreseeable future. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact meeting our capital needs during or beyond the next twelve months. Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. We believe that we have sufficient liquidity and cash on hand to satisfy our cash needs. If we are unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.
Short-term financing needs primarily consist of working capital requirements, interest payments on our 7.00% senior notes maturing in March 2030 (the "7.00% Senior Notes") and on outstanding borrowings under our Revolving Credit Facility and payments on our provision for legal matters. Long-term financing needs include the repayment of our 7.00% Senior Notes and outstanding borrowings under our Revolving Credit Facility. Additional long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and other strategic transactions. Our asset-light business model requires modest capital expenditures, with annual capital expenditures over the last three fiscal years averaging less than 1% of net sales. No significant capital expenditures are planned during the next 12 months. Additionally, we may seek to repurchase shares of our common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
The following table presents select cash flow data, which is discussed below.
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Three Months Ended December 31, |
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| dollars in millions | 2025 | 2024 | |||||||||
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Cash (used in) provided by:
|
|||||||||||
|
Operating activities
|
$ | (3.1) | $ | 3.0 | |||||||
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Investing activities
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(4.2) | (1.3) | |||||||||
|
Financing activities
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(5.3) | (23.2) | |||||||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
0.5 | - | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | $ | (12.1) | $ | (21.5) | |||||||
Operating Activities
Cash used in operating activities for the three months ended December 31, 2025 was $3.1 million compared to cash provided by operating activities of $3.0 million for the three months ended December 31, 2024. This decrease was primarilydue to increased inventory levels in the current year period (driven by higher production), fluctuations in the timing of collections of trade receivables and increased interest payments of $3.9 million. These impacts were partially offset by fluctuations in the timing of payments of trade payables and decreased tax payments (net of refunds) of $20.5 million.
Investing Activities
Cash used in investing activities for the three months ended December 31, 2025 increased $2.9 million compared to the prior year perioddriven by an increase in capital expenditures.
Financing Activities
Cash used in financing activities for the three months ended December 31, 2025 decreased $17.9 million compared to the prior year period, driven by higher borrowings of $145.0 million under our Revolving Credit Facility and lower tax withholding payments related to stock compensation plans of $3.0 million. These cash inflows were partially offset by higher payments of $85.1 million, including broker's commissions, for the repurchase of our common stock and higher repayments of $45.0 million under our Revolving Credit Facility.
Debt Covenants
The Credit Agreement contains affirmative and negative covenants applicable to us and our restricted subsidiaries customary for agreements of this type, including delivery of financial and other information; compliance with laws; maintenance of property, existence, insurance and books and records; providing inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the agent and the lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock. Under the terms of the Credit Agreement, we are also required to comply with a financial covenant requiring us to maintain a total net leverage ratio (as defined in the Credit Agreement) not to exceed 6.00:1.00, measured as of the last day of each fiscal quarter. We were in compliance with the financial covenant as of December 31, 2025, and we do not believe non-compliance is reasonably likely in the foreseeable future.
The Credit Agreement provides for potential incremental revolving and term facilities at our request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits us to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.
In addition, the indenture governing the 7.00% Senior Notes contains negative covenants customary for this type of agreement that limit our ability and the ability of our restricted subsidiaries to, among other things: borrow money or guarantee debt; create liens; pay dividends on, or redeem or repurchase, stock; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; enter into transactions with affiliates; and sell assets or merge with other companies. Certain of these covenants are subject to suspension when and if the 7.00% Senior Notes receive investment grade ratings.
CRITICAL ACCOUNTING ESTIMATES
Our critical accounting estimates are more fully described in our Annual Report on Form 10-K for the year ended September 30, 2025, as filed with the Securities and Exchange Commission (the "SEC") on November 18, 2025. There have been no significant changes to our critical accounting estimates since September 30, 2025.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Note 2 within "Notes to Condensed Consolidated Financial Statements" for a discussion regarding recently issued accounting standards.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, are made throughout this report, including statements regarding unanticipated developments that negatively impact our common stock. These forward-looking statements are sometimes identified from the use of forward-looking words such as "believe," "should," "could," "potential," "continue," "expect," "project," "estimate," "predict," "anticipate," "aim," "intend," "plan," "forecast," "target," "is likely," "will," "can," "may" or "would" or the negative of these terms or similar expressions elsewhere in this report. Our financial condition, results of operations and cash flows may differ materially from those in the forward-looking statements. Such statements are based on management's current views and assumptions and involve risks and uncertainties that could affect expected results. Those risks and uncertainties include, but are not limited to, the following:
•our dependence on sales from our RTD protein shakes;
•our ability to continue to compete in our product categories and our ability to retain our market position and favorable perceptions of our brands;
•disruptions or inefficiencies in our supply chain, including as a result of our reliance on third-party suppliers or manufacturers for the manufacturing of many of our products, pandemics and other outbreaks of contagious diseases, labor shortages, fires and evacuations related thereto, changes in weather conditions, natural disasters, agricultural diseases and pests and other events beyond our control;
•our dependence on third-party contract manufacturers for the manufacture of most of our products, including one manufacturer for nearly half of our RTD protein shakes;
•the ability of our third-party contract manufacturers to produce an amount of our products that enables us to meet customer and consumer demand for the products;
•our reliance on a limited number of third-party suppliers to provide certain ingredients and packaging;
•significant volatility in the cost or availability of inputs to our business (including freight, raw materials, packaging, energy, labor and other supplies), including as a result of tariffs or inflationary pressures;
•our ability to anticipate and respond to changes in consumer and customer preferences and behaviors and introduce new products;
•consolidation in our distribution channels;
•our ability to expand existing market penetration and enter into new markets;
•the loss of, a significant reduction of purchases by or the bankruptcy of a major customer;
•legal and regulatory factors, such as compliance with existing laws and regulations, as well as new laws and regulations and changes to existing laws and regulations and interpretations thereof, affecting our business, including current and future laws and regulations regarding food safety, advertising, labeling, tax matters and environmental matters;
•fluctuations in our business due to changes in our promotional activities and seasonality;
•our ability to maintain the net selling prices of our products and manage promotional activities with respect to our products;
•our ability to obtain additional financing (including both secured and unsecured debt) and our ability to service our outstanding debt (including covenants that restrict the operation of our business);
•the accuracy of our market data and attributes and related information;
•changes in critical accounting estimates;
•uncertain or unfavorable economic conditions that limit customer and consumer demand for our products or increase our costs;
•risks related to our ongoing relationship with Post Holdings, Inc. ("Post") following our separation from Post and Post's distribution of our stock to its shareholders (the "Spin-off"), including our obligations under various agreements with Post;
•conflicting interests or the appearance of conflicting interests resulting from certain of our directors also serving as officers and/or directors of Post;
•risks related to the previously completed Spin-off;
•the ultimate impact litigation or other regulatory matters may have on us;
•risks associated with our international business;
•our ability to protect our intellectual property and other assets and to continue to use third-party intellectual property subject to intellectual property licenses;
•costs, business disruptions and reputational damage associated with technology failures, cybersecurity incidents and corruption of our data privacy protections;
•impairment in the carrying value of goodwill or other intangible assets or other long-lived assets;
•our ability to identify, complete and integrate or otherwise effectively execute acquisitions or other strategic transactions and effectively manage our growth;
•our ability to hire and retain talented personnel, employee absenteeism, labor strikes, work stoppages or unionization efforts;
•our ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002;
•significant differences in our actual operating results from any guidance we may give regarding our performance; and
•other risks and uncertainties included under "Risk Factors" in this report and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on November 18, 2025.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.
Bellring Brands Inc. published this content on February 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 03, 2026 at 18:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]