Stock Story -
Nutrition products company Bellring Brands (NYSE:BRBR) beat analysts' expectations in Q4 FY2023, with revenue up 24.6% year on year to $472.6 million. Its full-year revenue guidance of $1.87 billion at the midpoint also came in slightly above analysts' estimates. Turning to EPS, BellRing Brands made a non-GAAP profit of $0.41 per share, improving from its profit of $0.25 per share in the same quarter last year.
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BellRing Brands (BRBR) Q4 FY2023 Highlights:
- Revenue: $472.6 million vs analyst estimates of $460.8 million (2.6% beat)
- EPS (non-GAAP): $0.41 vs analyst estimates of $0.40 (2.8% beat)
- Management's revenue guidance for the upcoming financial year 2024 is $1.87 billion at the midpoint, in line with analyst expectations and implying 12.2% growth (vs 21.4% in FY2023)
- Gross Margin (GAAP): 32.9%, up from 32.3% in the same quarter last year
- Organic Revenue was up 24.6% year on year
- Sales Volumes were up 19.4% year on year
Personal CarePersonal care products include lotions, fragrances, shampoos, cosmetics, and nutritional supplements, among others. While these products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering.
As with other consumer staples categories, personal care brands must exude quality and be priced optimally given the crowded competitive landscape. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.
Sales GrowthBellRing Brands is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 19% over the last three years was excellent as consumers bought more of its products.
This quarter, BellRing Brands reported remarkable year-on-year revenue growth of 24.6%, and its $472.6 million in revenue topped Wall Street estimates by 2.6%. Looking ahead, analysts expect sales to grow 12.4% over the next 12 months.
Key Takeaways from BellRing Brands's Q4 Results With a market capitalization of $5.96 billion, BellRing Brands is among smaller companies, but its $48.4 million cash balance and positive free cash flow over the last 12 months give us confidence that it has the resources needed to pursue a high-growth business strategy.
It was good to see BellRing Brands' top analysts' revenue, adjusted EBITDA, and EPS expectations this quarter. These results were driven by better-than-expected company-wide sales volumes and outperformance in its Premier Protein division. We were also glad its full-year revenue guidance beat Wall Street's estimates. On the other hand, its operating margin missed analysts' expectations, and it discontinued its PowerBar business, which is sad news for gym buffs. Zooming out, we think this was a decent quarter, showing that the company is staying on track. The stock is flat after reporting and currently trades at $45.6 per share.
The author has no position in any of the stocks mentioned in this report.
