BellRing Brands, Inc. (NYSE:BRBR) Q4 2022 Earnings Call Transcript

Andrew Lazar: I am sorry if you said this, I was unclear, some of the one-off items that affected 4Q, the delayed load-in to e-commerce and sort of the bottler co-packer issue. Are those now sort of completely resolved or do they sort of bleed into the New Year? And is there a way to sort of quantify maybe what the impact to sales in the fourth quarter was from some of those one-off items, I know that can be hard sometimes?

Darcy Davenport: Yeah. So I will hit the first and then I will let Paul address the quantification. The — yeah, the three — you hit the three items, so and for the most part, they have been resolved. So, obviously, the recall expansion that is unique to Q4 and then — and that was really a shelf disruption. And then on the — and just to be clear on the recall, we — the recall happened and this is one of our — it was immaterial. It was a small co-man kind of immaterial to our overall business. Our initial recall happened on 7/28, which we knew last earnings call. But then there was an expansion after our earnings call and what happens with the expansion is from a retailer standpoint it’s just like a new recall. So they actually — many retailers just swipe the shelf, they can turn off your item, et cetera.

So there is a disruption at the shelf. So that was the unique item. And then, yes, on the delays — on the e-commerce pieces, delayed load-in largely was remedied in Q2 and then bottle production continues to improve, not where we need to be, but improving. So I would say largely it has been kind of corrected and they were kind of unique items to Q4.

Andrew Lazar: Then, Paul, I think, you were going to mention, yeah, if there was a way to quantify the impact on sales.

Paul Rode: Yeah. As far as magnitude, about two-third of the impact is from the e-commerce challenges and about a third from the recall. On the e-commerce side, bottle production was a majority of it but we did have some challenges with an e-commerce retailer. They were heavy on inventory and so they weren’t allowing us to ship in some of our products. So that’s part of it. And the one thing I want to touch on, so Darcy mentioned, the production is challenge, the one issue we did have as well that did result in some of our limited time offerings, not getting to the shelf because of issues. So that’s the one thing that would have benefited Q4 that won’t come in back into Q1, but we do get some timing benefits from some of the products as they fall into Q1.

Andrew Lazar: Got it. And then, Darcy, you mentioned the buy rate was up. Is some of that due to just purely the price increases that you have had or, I mean, is there a way to see what maybe buy rate would be on sort of more of a volumetric basis to get a sense of how consumers are thinking about or the loyal consumers are thinking about the brand?

Darcy Davenport: Yeah. Most of the buy rate increases are pricing. But I think that what it shows is that our loyal, high value buyers are sticking with us.

Andrew Lazar: Okay. Thank you.

Darcy Davenport: Thanks.

Operator: We will take our next question from Chris Growe with Stifel.

Chris Growe: Hi. Good morning.

Darcy Davenport: Good morning.

Paul Rode: Good morning.

Chris Growe: Hi. I had a question for you on — you showed a chart in the slides around a TDP recovery and I just want to get a sense of clearly about 20% below you were pre sort of supply issues. Would you expect to build back to that level throughout the year, is there a way to think about it or does it build back there more quickly as you are rebuilding inventory at the trade?

Darcy Davenport: I am assuming, Chris, you are talking about Premier Protein, not Dymatize, right?