Megan Klatt

Megan Klap asked about the club channel's contribution to the expected acceleration from mid-December and the growth expectations for the club channel this year, considering various headwinds and tailwinds.

Answer

Darcy Davenport, President and CEO, BellRing Brands, stated that the majority of growth is anticipated from outside the club channel, specifically from FDM (food, drug, mass) and e-commerce, where there is significant potential. She indicated that club comparisons will ease throughout the year, but growth drivers like distribution, merchandising, advertising, and innovation are primarily focused on other channels.

Megan Klap asked about the expected growth acceleration from mid-December, specifically how much of it is driven by the club channel, and the anticipated growth for the club channel this year considering various headwinds and tailwinds.

Answer

President and CEO Darcy Davenport stated that major growth is largely expected from outside the club channel, specifically FDM and e-commerce, where there is significant opportunity. CFO Paul Rode added that distribution gains, innovation, and increased advertising will drive acceleration as club comparisons ease.

Megan Klatt asked for an update on the 2026 commentary, specifically regarding the potential for double-digit EPS growth mentioned last quarter, and if anything has changed given moderating cocoa costs and potential tariff relief. She also inquired about the implied Q4 outlook, the drivers of the full-year top-line guide increase, and the outlook for North America confectionery.

Answer

CEO Kirk Tanner confirmed potential for above-algorithm EPS. SVP and CFO Steve Voskuil detailed factors influencing 2026, including consumer demand, innovation (Reese's Oreo), elasticity, and marginally better outlook for cocoa (layering hedges). He noted optimism for tariff relief through trade deals, modeling $200 million incremental tariffs. For Q4, he attributed most impact to international shipment timing, expecting U.S. CMG momentum to continue with additional investment for Halloween/holiday and less cocoa hedge favorability than Q3.