What Happened:
Shares of nutrition products company Bellring Brands (NYSE:BRBR) jumped 11.4% in the morning session after the company reported a "beat and raise" quarter. Second-quarter earnings results blew past analysts' gross margin expectations. Its organic revenue growth outperformed Wall Street's estimates, driven mainly by an 18.4% increase in volume. The results benefitted from strong demand for the Premium Protein brand as consumption growth of the product continued to accelerate during the quarter. Notably, management highlighted that "Dollar consumption of Premier Protein ready-to-drink ("RTD") shakes and Premier Protein powder products increased 9.6% and 43.6%." Overall, Premier Protein recorded a 19.8% sales growth.
Looking ahead, management raised revenue guidance for the full year to $1.96-$2.00 billion (from $1.93-$1.99 billion) and Adjusted EBITDA to $430-$440 million (from $400-$420 million), suggesting that strong product demand is expected to continue in the second half of the year. Zooming out, this was a fantastic quarter that should have shareholders cheering.
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What is the market telling us:
BellRing Brands's shares are not very volatile than the market average and over the last year have had only 4 moves greater than 5%. Moves this big are very rare for BellRing Brands and that is indicating to us that this news had a significant impact on the market's perception of the business.
BellRing Brands is down 1.5% since the beginning of the year, and at $53.91 per share it is trading 12.3% below its 52-week high of $61.49 from March 2024. Investors who bought $1,000 worth of BellRing Brands's shares at the IPO in October 2019 would now be looking at an investment worth $3,263.
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