BellRing Brands (NYSE:BRBR) rallied in early action on Tuesday after beating estimates on both lines of its Q2 earnings report. Revenue rose 15.6% year-over-year during the quarter to $515.4 million, driven by an 18.4% increase in volume and 2.8% decrease in price/mix.
Sales in the Premier Protein segment increased 19.8%, driven by a 19.2% increase in volume and 0.6% increase in price/mix. Premier Protein RTD shake net sales increased 18.5%, driven by a 19.4% increase in volume and 0.9% decrease in price/mix. Volume gains were driven by organic growth and distribution gains. Meanwhile, Dymatize segment sales decreased 2.6%, driven by a 4.4% increase in volume which was offset by a 7.0% decrease in price/mix.
Mizuho Securities analyst John Baumgartner noted that despite the market’s concerns over recent takeaway data, larger shipments coincident with growth in distribution points drove a solid revenue beat for BellRing Brands (BRBR). “Premier performance remains robust, across shakes and powder, and we believe momentum suggests upside bias to FQ4 guide,” he noted. Baumgartner and his team think that after growth concerns pressured shares since early July, the share price weakness provides an attractive buying opportunity. BRBR was called a top pick in the SMID growth category.
JPMorgan analyst Ken Goldman said BellRing Brands’ (BRBR) report was positive versus expectations. “Importantly, the midpoint of implied 4Q guidance is a bit ahead of consensus for both revenue and EBITDA,” he noted.
On Seeking Alpha, Caffital Research tipped that valuation on BellRing Brands (BRBR) looks more attractive. “BellRing’s Q3 came with a surprisingly good topline growth, partly driven by higher trade inventory levels but also with continued great growth in underlying consumption,” highlighted Caffital Research.
Shares of BellRing Brands (BRBR) were up 7.15% at 10:00 a.m. on Tuesday to traded at their highest level in two weeks.