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

Chris Growe: Correct. I am sorry. Yes. Yes.

Darcy Davenport: Yeah. Yeah. So we expect TDPs to stay kind of stable — they have been very stable since for most of the calendar year and we expect them to stay stable until we start reintroducing some of those paused SKUs and that’s going to happen midyear then they will pick up. We should see a little bit of an increase over the next kind of several months, just as we continue to fill the shelves out and increase — as we increase trade inventory. We still have holes on the shelf, especially in some FDM accounts. So we will think of it as maybe some small increases as we fill out the shelves better in kind of FDM and then we will start seeing consecutive improvements as we start reintroducing kind of midyear as we start reintroducing those paused cost SKUs.

Chris Growe: Okay. Our data has shown picking up here a little bit even in recent weeks. I know your data goes through the quarter. But it looks like it picked up a bit and perhaps that’s filling in some of those holes in the FDM accounts, so

Darcy Davenport: That’s exactly right.

Chris Growe: Okay. And then just a second question for you, perhaps, for Paul, is around accounts receivables spiked up a lot in the fourth quarter and days sales outstanding spiked up. I guess I wanted to just understand like, obviously, it would indicate you shipped a lot late in the quarter. Was that getting retailers back to targeted levels, is that what I am seeing there? And maybe related to that, is a targeted level for a retailer, is that above where it’s been historically or is it where it’s been historically and you are trying to get back to the level

Paul Rode: Yeah. So on your last question we are really just trying to get back to the initial level. We haven’t necessarily seen changes in their desired weeks of supply, so it’s really trying to get them back. As far as cash or as far as receivables, you are correct. It’s really more about timing. So we did have heavier shipments in September, which drove the AR up. And if you compare that to the prior year, we had a lot of promotion — promotional shipments in kind of that July, August time period, which meant that accounts receivable in September was really almost at a low point a year ago where it was just a little different in how it shipped out in fourth quarter of fiscal 2022.

Chris Growe: Okay. Okay. Thanks a lot for that.

Paul Rode: Thank you.

Darcy Davenport: Thanks.

Operator: We will take our next question from Ben Bienvenu with Stephens.

Jim Salera: Hey, guys. Jim Salera on for Ben. Thanks for taking our question. I wanted to ask, you touched on this a little bit at the beginning with the club retailer flip-flop, but just kind of your retail partner’s receptiveness to you guys pulling the price lever. I know we have heard some larger retailers kind of dig in their heels in. Just wanted to get some commentary around the category sets as you guys are taking price, have you seen maybe some SKUs you trimmed out or maybe new brands coming into the category?

Darcy Davenport: So from a price standpoint, I mean, it’s always difficult, and yeah, we have definitely seen the same articles out there. So we obviously just took a round of pricing on the Premier Protein shake business effective Q1. So in October, it was expected by all retailers and it is currently in the market. But I think that they — I mean it was — there were a lot of negotiations. I think that — and there’s definitely a pushback. But I think, ultimately, they understand that our costs are dramatically increasing. So it just kind of comes down to that. It was a pretty logical conversation. And then what was your second question?