Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported a net sales growth of 16% and an adjusted EBITDA margin of 20.8% [5][21] - Adjusted EBITDA for the year was $482 million, with cash flow from operations amounting to $261 million [21] - The company repurchased approximately 7% of its outstanding shares, totaling 9 million shares for $473 million [21] Business Line Data and Key Metrics Changes - The ready-to-drink (RTD) shake category grew by 15%, with Premier shake consumption increasing by 20% due to promotional events [6][22] - Premier Protein's net sales grew by 15%, while Dymatize's net sales surged by 33% [22][23] - Adjusted gross profit margin decreased by 620 basis points to 29.7%, primarily due to input cost inflation and increased promotional activity [23] Market Data and Key Metrics Changes - The RTD shake category has doubled in retail sales since 2019, reaching $8.7 billion, with Premier Protein holding approximately 50% market share [7][8] - Household penetration for RTD shakes is at 54%, indicating significant growth potential compared to mature CPG categories [7] - The competitive landscape includes insurgent brands and declining legacy brands, with expectations for consolidation around top-performing brands [8][10] Company Strategy and Development Direction - The company plans to focus on expanding distribution, increasing advertising investment, and launching innovative products [14][16] - Long-term revenue growth is now projected at 7-9%, with Premier Protein expected to drive this growth [10][11] - The company aims to maintain an adjusted EBITDA margin of 18-20%, supported by cost savings initiatives [11][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the category's momentum and Premier's leading position despite increased competition [35][36] - The first quarter of fiscal 2026 is expected to be softer, but stronger performance is anticipated for the remainder of the year [11][30] - Management highlighted the importance of innovation and advertising in driving future growth [16][19] Other Important Information - The company is focusing on cost savings initiatives to mitigate the impact of inflation and tariffs on margins [25][26] - New product launches, including almond milk shakes and coffee house shakes, are part of the innovation strategy for 2026 [17][18] Q&A Session Summary Question: Changes in the competitive landscape and its influence on 2026 plans - Management noted that while competition has increased, the category's momentum remains strong, with Premier Protein maintaining its leading position [35][36] Question: Insights on repeat rates for new entrants in the category - Management indicated that they expect their major club customer to maintain an expanded set, and they are monitoring repeat rates closely [41][42] Question: Growth expectations in the club channel - Management expects major growth to come from outside the club channel, with improvements anticipated as comparisons ease [48] Question: Consumption trends and innovation contributions - Management expects consumption to accelerate in the second half of December, driven by new partnerships and advertising [54][56] Question: Insights on EBITDA margin pressures - Management highlighted that the primary drivers of margin pressure include tariffs, inflation, and increased advertising [68][70] Question: Market share potential of insurgent brands - Management believes that while some insurgent brands may succeed, the complexity of scaling nationally will limit their growth [76][78] Question: Pricing expectations and promotional activity - Management anticipates a low single-digit headwind related to pricing for Premier Protein, with increased promotional activity expected [85][90]

Financial Data and Key Metrics Changes - The company reported net sales of $588 million, representing a 19% increase year-over-year, while adjusted EBITDA grew 14% to $119 million, with adjusted EBITDA margins at 20.2% [19][20][21] - The fiscal year 2025 outlook for net sales growth is affirmed at 13% to 17% over fiscal year 2024, with adjusted EBITDA growth expected at 7% to 14% [7][23] Business Line Data and Key Metrics Changes - Premier Protein net sales increased by 22%, driven by strong volume growth in ready-to-drink (RTD) shakes and powders [19][20] - Dymatize's net sales grew 3%, supported by brand investments and new products, with international business showing double-digit growth [15][19] Market Data and Key Metrics Changes - The convenient nutrition category grew 12% in Q2, with RTD growth leading at 19% [8][30] - Premier Protein achieved all-time highs in household penetration, reaching nearly 21% [10][11] Company Strategy and Development Direction - The company is focusing on expanding its promotional activities and distribution, particularly for the new indulgence line, which targets incremental consumption occasions [14][17] - The management is optimistic about the long-term growth potential in the protein category, emphasizing the importance of innovation and consumer engagement [17][19] Management's Comments on Operating Environment and Future Outlook - Management noted that despite weakening consumer sentiment, the fundamentals of the protein category remain strong, with expectations for continued growth [7][30] - The company is cautious in its guidance due to uncertainties in the consumer environment but remains confident in its growth potential [61][90] Other Important Information - The company generated $48 million in cash flow from operations in Q2, with net debt at $932 million and net leverage at 1.9 times [22][23] - The company plans to continue monitoring potential tariff impacts on input costs, particularly related to dairy protein sourced from New Zealand and the EU [26][49] Q&A Session Summary Question: What are the expectations for category growth in the back half of the year? - Management indicated that the fundamentals remain strong, with expectations for continued growth in the RTD category despite broader consumer challenges [30] Question: What is driving the change in retailer inventories? - Management explained that the destocking is primarily a one-time adjustment by retailers who previously over-ordered, and consumption remains strong [36][42] Question: How are tariffs expected to impact input costs? - Management stated that dairy inputs constitute about 30% to 40% of total costs, with potential minor impacts from tariffs expected to start in fiscal year 2026 [47][49] Question: What is the outlook for marketing and advertising spending? - Management confirmed that the increased marketing spend aligns with expectations and is focused on driving consumption growth [52][54] Question: How does the company view competition in the protein shake market? - Management believes that while competitors are increasing protein levels, the focus remains on taste and nutritional balance, with opportunities for innovation [66][68] Question: What is the strategy behind the fourth-quarter promotions? - Management views the expanded promotions as a strategic move to enhance household penetration and drive consumer engagement, supported by inventory levels [116]