BellRing Brands looks to inflation-related margin pressure but 'minor' tariff impact
BellRing Brands expects margins to be pressured by inflation in the back half of the year, along with a sales 'headwind' from retailer inventory reductions.
However, the US-based protein business left sales and EBITDA guidance unchanged for the full year as president and CEO Darcy Davenport presented second-quarter results.
Her finance counterpart Paul Rode pointed to a 'minor' impact from tariffs, with that impact likely to be felt in fiscal 2026 rather than the current year, mainly linked to dairy protein ingredients sourced from Europe and New Zealand.
'Our pricing actions have offset input-cost inflation to date. However, the rate of inflation will increase in the second half of 2025, pressuring margins when compared to the prior year,' Rode explained on a follow-up call with analysts.
While the sales outlook for the second half remains unchanged, sales will be supported by promotions in the final quarter of 2024 but offset by 'third-quarter reductions in retailer trade inventory levels', he said.
Rode added: 'Starting late in Q2 and continuing into the third quarter, several key retailers lowered their weeks of supply on hand, which is expected to be a mid-single-digit headwind to our third-quarter growth. This change is in addition to the previously anticipated mid-single-digit impact to the third quarter from lapping last year's trade inventory replenishments.
'We now expect Q3 net sales growth of low-single-digits with Premier Protein the main driver and all others flat to down. Without the impact of these trade inventory changes, our underlying third-quarter growth for Premier Protein RTD shakes would be more in line with our expected consumption growth of mid-to-high teens.'
Sales in the quarter to 31 March rose 18.9% to $588m based on 15.3% volume growth and an increase in price/mix of 3.6%.
Adjusted EBITDA climbed 14.4% to $118.6m, with the margin dipping to 20.2% from 21%.
Sales over 2025 were reaffirmed at $2.26-2.34bn (13-17% growth) and adjusted EBITDA of $470-500m (7-14%).
Rode said the adjusted EBITDA margin will remain 'healthy' at 21.1% at the 'midpoint' but in the fourth quarter will be 'sequentially lower as higher input-costs and promotional spend weigh on margins'.
BellRing on tariffs
In terms of tariffs, the CFO said a 'portion' of the company's input costs could be hit by the levies related to the dairy ingredients from Europe and New Zealand. But BellRing Brands expects no impact in 2025 and a 'partial' impact the following year due to the sourcing lag on the P&L account.
Nevertheless, Rode said the company is 'actively evaluating ways to mitigate tariff impacts'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
36 minutes ago
- Yahoo
New Mexico Foundation's new CEO makes quite an impression
One of my tasks as the business reporter at The Santa Fe New Mexican is to keep tabs on what's happening in the state's nonprofit community, which explains why I spoke last week with Justin Kii Huenemann, the new president and CEO at the New Mexico Foundation for a profile in our June 4 edition. Justin Kii Huenemann Justin Kii Huenemann, the new president and CEO of the New Mexico Foundation, says the organization faces unique challenges and opportunities as the only statewide community foundation in New Mexico. The Santa Fe-based community foundation lists collaboration and sustainability as two key elements in its core values, and it is clear that Huenemann plans to continue emphasizing both during his tenure. Citing his upbringing on the Navajo Nation near Tsaile, Ariz., he talked about how the landscape of that area has shaped his perspective on the world as an adult. Not surprisingly, he said he tends to take the long view in his approach to managing organizations, especially those that have experienced a recent leadership void. 'The sky's not falling,' he said, describing the message he likes to convey to his new staff in those situations. Huenemann had to hit the ground running in his new position, but he nevertheless made time to spend at least an hour conversing with each member of his staff within two weeks of his arrival. He described himself as an active listener, adding that the most important job of his foundation is to avoid creating barriers for its partners. But the thing he said that impressed me the most was when he described community foundations as 'a privileged environment within a privileged sector,' a reminder to himself to remain cognizant of how different a given situation can look to someone on the outside. As someone who spent the last 10 years living just off the Navajo Nation in San Juan County, a remote and often overlooked corner of New Mexico, I felt like I understood well what he was trying to say. And I have little doubt that Huenemann's term at the foundation will be a successful one.
Yahoo
36 minutes ago
- Yahoo
Sending money to family in foreign countries may be taxed more
Jun. 9—Families hoping to send money to loved ones in other countries may be hit with additional fees from a tax and spending bill proposed by the Trump administration that would slap a 3.5% tax on remittances sent by anyone who is not a U.S. citizen. The "One Big Beautiful Bill Act" passed through the House in May and is now being debated by the Senate. The budget bill has several proposed tax changes, which include taxing money sent from an estimated 40 million non-US citizens — including green card holders, temporary workers and undocumented immigrants — to family and friends in other countries. The bill had a 5% tax but was reduced to 3.5%. The bill is another way the Trump administration is hoping to dissuade immigrants, both documented and undocumented, from coming into the country and moving money out of the U.S. economy. Republicans believe the bill would increase the average take-home pay of U.S. citizens, while Democrats believe the bill and increased taxes are "a transfer of wealth from the working class to the rich," said Daniel Garcia, spokesperson for the Democratic Party of New Mexico. What is a remittance? Remittances refer to sending money from one person to another and is typically done between family members from one country to another. A person living and working in the U.S. would send money to family members typically living in a developing country, where this money is a source of income that contributes to the country's gross domestic product (GDP). Payments are typically sent using an electronic payment service or a money transfer app. Banks, credit unions and money transfer services charge a fee for processing remittances, and fees average 10%, according to the International Monetary Fund. Cryptocurrency exchanges are not as heavily regulated and can be a way to avoid additional taxes and surcharges. "Taxing remittances would amount to a form of double taxation, since migrants already pay taxes in the country where they work," Esteban Moctezuma Barragán, Mexican Ambassador, wrote in a statement. "Imposing a tax on these transfers would disproportionately affect those with the least, without accounting for their ability to pay," Barragán added. However, some believe the 3.5% tax fee would give financial support to public services and is the most "pro-worker, pro-family and pro-American legislation we've seen in decades," said Amy Barela, chairwoman of the Republican Party of New Mexico. "Let's be clear, this measure is not about targeting individuals," she wrote in a statement to the Journal. "It's about ensuring the 3.5% fee, although modest, would also have a very meaningful impact in helping offset costs associated with public services, border security, and community infrastructure — relieving some of the financial pressure on hardworking New Mexicans who continue to bear the burden of an imbalanced system." Crucial source of revenue Mexico is the second-largest receiver of personally wired money behind India, according to the Center for Strategic and International Studies. In 2024, Latin America received $160.9 billion, with the U.S. accounting for 96.6% of all remittances to Mexico. They also make up 20-30% of GDP in countries like El Salvador, Guatemala, Haiti and Honduras. "Remittance is a very important source of revenue in our government," said Patricia Pinzón, consul of Mexico. "This would affect Mexican families and the economy in general, but I would say the basic needs of Mexican families is the most worrying thing." However, "whatever happens in one economy will affect the other," said Pinzón. "Our economies are so interrelated that everything that happens here has a consequence in Mexico," she said. "Mexicans will not stop sending money; they'll just look for alternative ways to send it." Mexican migrant workers sent 16.7% of their labor income back to their families, and more than 80% of the income remains in the U.S. economy. The average amount of remittance sent to Mexico is roughly $350 every one to two months, which "could seem like nothing for the U.S., but it's money that a whole family lives on and covers their basics in Mexico," Pinzón said.
Yahoo
36 minutes ago
- Yahoo
Proposed RENT Ordinance aims to rein in unfair rental practices
Jun. 9—The Albuquerque City Council is set to consider sweeping new rules that would overhaul the rental process citywide, aiming to protect tenants from hidden fees, housing instability and unresponsive landlords. The bill, known as Renter's Empowerment and Neighborhood Transparency (RENT) Ordinance, would enshrine several protections around almost every part of the renting experience. The bill addresses nearly all aspects of the rental process and would impact every landlord and renter in the city. Statistics from the American Community Survey show that about 44% of households in Albuquerque rent. But it's far from guaranteed to pass. "I think that this council has proven in the past that they're not interested in helping renters very much," said Councilor Tammy Fiebelkorn, who is sponsoring the bill on behalf of the mayor's office. "But recently, we did get two pieces of tenant protections passed." Those two pieces were an ordinance mandating landlords provide cooling for tenants and a bill that created a code enforcement position to respond directly to renters' issues. The bill also faces opposition from landlord advocates. "While the stated intent of this legislation may be to protect tenants, in practice, it burdens responsible landlords, increases operational and legal risk, and would discourage housing investment in Albuquerque," said Alan LaSeck, executive director of the Apartment Association of New Mexico. LaSeck went on to say the proposals ignore the realities of managing rental housing and would lead to reduced availability, higher costs and greater conflict. "Rather than fostering cooperation between tenants and owners, they threaten to drive housing providers out of the market, shrinking our housing supply, increasing rents and worsening the very problem we're trying to solve," LaSeck said. What's in the RENT Ordinance? Shanna Schultz, policy and government affairs administrator for the city, said the bill comes at a time when Albuquerque continues to grapple with a housing crisis. A 2024 Denver-based Root Policy Research report, titled "Albuquerque Region Housing Needs Assessment," found a significant shortage of units for low-income renters. The same report found that residents were spending more than a third of their monthly income on housing and that occupied units, such as apartments and single-family homes, often had more residents than rooms available. "I think we know that building more homes is essential, but that's not enough on its own. It's not the only tool in the toolkit," Schultz said. "We also need to protect the people who are already living in homes." Schultz, who authored the policy proposal, noted that the bill's transparency provisions were among its most significant changes. The RENT Ordinance would require landlords to disclose all costs of a rental agreement in plain language in their published listings. That includes anything on a background check that could disqualify an applicant, as well as minimum credit score or income requirements. "This can help renters avoid surprise charges and do things like budget more confidently, which is very important in this economy right now," Schultz said. There are several other key provisions, including those around repairs. The ordinance grants the tenant the right to arrange for necessary maintenance by a licensed and insured professional. The tenant can also deduct the cost of the repair from their rent payment or receive reimbursement from the landlord when the landlord fails to make a repair. Landlords would also be prohibited from charging fees and additional rent for companion animals, defined in the bill as typical pets not used for commercial purposes. In all, the bill makes changes to rules around security deposits, relocation assistance, the rental application process, evictions, credit reporting requirements, move-in and move-out procedures and methods of payment. It's set to go before the Land Use, Planning and Zoning Committee on June 11. If it advances, it's unlikely to go before the full council until at least August, Schultz said. "Why would landlords also be interested in this? And I think the answer to that is that clear rules reduce confusion and conflict," Schultz said.
