Shares of BellRing Brands (BRBR +0.39%) turned sour this morning. After a disappointing Q2 report with a side of sour full-year guidance, the stock crashed as much as 46.9% lower in the morning session. As of 12:46 a.m. ET, BellRing still showed a 42.4% single-day price drop.
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BellRing's quarter left a bad taste
The company behind protein-boosted products PowerBar, Dymatize, and Premier Protein saw 2% year-over-year sales growth in the second quarter of fiscal year 2026. Adjusted earnings fell from $0.53 to $0.14 per share. The analyst consensus had called for 3.5% revenue growth and earnings near $0.32 per share.
Management also lowered BellRing's guidance goals across the board. At the midpoint of each guidance range, full-year sales growth should now stop around 1% (down from 5% three months ago). Adjusted EBITDA should now add up to roughly $325 million in 2026, 25% below the previous guidance of approximately $433 million.
Too many shakes on the shelf
BellRing's sales growth was largely built on deep-discount promotions, undermining the company's profit margins and raising questions about organic demand for protein shakes and protein powder. The former Post subsidiary also absorbed higher ingredient costs due to inflation, import tariffs, and higher transportation expenses.
On the earnings call, soon-to-retire CEO Darcy Davenport noted that BellRing is facing a plethora of new competitors in the protein shake market, especially in the warehouse club retail channel. Consumers are hungry for healthy nutrition since GLP-1 weight loss drugs turned up.
"Retailers are going to consolidate the shelf around the most successful brands, and we will be them," Davenport said. "And we will be in that consideration set because we have the highest awareness and repeat household penetration. We are the most well-known brand, both with aided awareness and unaided awareness."
NYSE: BRBR
Key Data Points
BellRing's bull thesis is that the company should ride out this storm and come out stronger on the other side. On the other hand, the stock has now crashed 87% in one year and it trades at just 6.8 times trailing earnings.
It's either a fantastic turnaround bet or a dangerous falling knife, and only time will tell which theory is right. I don't mind watching BellRing's protein shake drama from the sidelines.
