What Happened?
Shares of nutrition products company Bellring Brands (NYSE: BRBR) fell 44.4% in the morning session after the company reported underwhelming first quarter earnings: sales, adjusted EPS and EBITDA all came in below Wall Street’s estimates.
Management attributed the weakness to pricing pressure as consumers became more cost sensitive. Promotions also weighed on margins as the company pushed the Premier Protein brand.
The softness also reflected higher freight costs, which likely weighed on near-term growth forecasts in addition to plans for continued marketing campaigns. As a result full year EBITDA guidance came in below analysts’ estimates while full year sales projections were lowered. Overall, this was a weaker quarter.
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What Is The Market Telling Us
BellRing Brands’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for BellRing Brands and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 33.3% on the news that the company reported disappointing third-quarter financial results and narrowed its fiscal year 2025 outlook.
The sell-off appeared driven by concerns over retailer inventory levels. In May, BellRing first revealed that several key retailers decided to lower their on-hand supply of its nutritional products. This action created a significant headwind for third-quarter growth. Regardless, the quarter itself was fine as BRBR beat across the board (organic revenue growth, total revenue, and EBITDA).
However, margins narrowed and EBITDA guidance for the full year fell below expectations. The stock's reaction suggests the market was expecting more given the underwhelming outlook.
BellRing Brands is down 62.4% since the beginning of the year, and at $9.81 per share, it is trading 87.5% below its 52-week high of $78.43 from May 2025. Investors who bought $1,000 worth of BellRing Brands’s shares 5 years ago would now be looking at only $387.87.
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