BellRing Brands (NYSE:BRBR) Beats Q1 Sales Targets, Full-Year Sales Guidance Is Optimistic

Max Juang /
2024/02/05 5:06 pm EST

Nutrition products company Bellring Brands (NYSE:BRBR) reported Q1 FY2024 results beating Wall Street analysts' expectations, with revenue up 18.7% year on year to $430.4 million. The company's full-year revenue guidance of $1.91 billion at the midpoint also came in 1.3% above analysts' estimates. It made a non-GAAP profit of $0.43 per share, improving from its profit of $0.33 per share in the same quarter last year.

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BellRing Brands (BRBR) Q1 FY2024 Highlights:

  • Revenue: $430.4 million vs analyst estimates of $408.4 million (5.4% beat)
  • EPS (non-GAAP): $0.43 vs analyst estimates of $0.40 (8.5% beat)
  • The company lifted its revenue guidance for the full year from $1.87 billion to $1.91 billion at the midpoint, a 2.1% increase
  • Free Cash Flow of $74.2 million, down 11.8% from the previous quarter
  • Gross Margin (GAAP): 34.4%, up from 33.6% in the same quarter last year
  • Organic Revenue was up 18.7% year on year
  • Sales Volumes were up 19% year on year
  • Market Capitalization: $7.45 billion

Spun out of Post Holdings in 2019, Bellring Brands (NYSE:BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.

Personal Care

Personal care products include lotions, fragrances, shampoos, cosmetics, and nutritional supplements, among others. While these products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering. As with other consumer staples categories, personal care brands must exude quality and be priced optimally given the crowded competitive landscape. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.

Sales Growth

BellRing Brands is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.

As you can see below, the company's annualized revenue growth rate of 19.1% over the last three years was impressive as consumers bought more of its products.

BellRing Brands Total Revenue

This quarter, BellRing Brands reported robust year-on-year revenue growth of 18.7%, and its $430.4 million in revenue exceeded Wall Street's estimates by 5.4%. Looking ahead, Wall Street expects sales to grow 11.2% over the next 12 months, a deceleration from this quarter.

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Key Takeaways from BellRing Brands's Q1 Results

We were impressed by how significantly BellRing Brands blew past analysts' revenue and organic revenue growth expectations this quarter. That outperformance was driven by its Premier Protein brand, which saw 19.5% volume growth on modest promotional activity. That type of unit growth is rare in the consumer staples sector. Its smaller brand, Dymatize, also saw superb volume growth of 32.4%. As a result of the strong demand, the company lifted its full-year revenue and adjusted EBITDA guidance. Overall, this quarter's results seemed positive and shareholders should feel optimistic. The stock is flat after reporting and currently trades at $57.7 per share.

So should you invest in BellRing Brands right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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