Change of Pace - Slightly Better Than Expected Results Driven by Healthy Category Growth; Remain Buy with $15 PT

Research evidence excerpt

Change of Pace - Slightly Better Than Expected Results Driven by Healthy Category Growth; Remain Buy with $15 PT

in several markets was related to price negotiation disruptions, FY26E EPS 1.48 1.56

which are now complete. Gross margin was 25.7%, down 210 bps from last year, FY27E EPS 1.66 1.73

but 140 bps better than we expected. Inflation remains within the mid-single digits,

ticking up slightly given fallout from the war in the Middle East. Adjusted EBITDA Revenue (M)

was $92.6MM, down 23% from last year, but $7MM higher than what had been FY Dec 2025A 2026E 2027E

pretty dire estimates (down ~30%) owing to the better sales and gross margin. Q1 760.10 715.20A 729.56

■ Significant Changes to Marketing/Advertising Lever. Nomad hired Justin Billingsley Q2 746.90 715.10 725.86

as Chief Marketing Officer last week, reporting directly to CEO Dominic Brisby. The Q3 752.40 737.41 752.23

hire comes after several years of a bloated and inefficient marketing department Q4 773.10 761.50 776.81

(their words). In fact, management noted that by the end of the summer, FY REV 3,032.50 2,929.21 2,984.46

the marketing department will be about half the current size, with greater

Diluted EPS (Adjusted) accountability by local market. We expect greater diligence on spending as a

result, eventually reducing non-working A&P dollars from 40% currently to ~15%. FY Dec 2025A 2026E 2027E

In addition to changing the creative message and channels for advertising, we Q1 0.35 0.23A 0.28

expect these changes to make the marketing spend much more efficient. Second, Q2 0.40 0.38 0.42

we believe more product innovation focused on fiber, snacking and gut health are Q3 0.49 0.52 0.55

possible in 2027/28 to capitalize on current consumer trends. Q4 0.43 0.44 0.48