BellRing Brands, Inc: 2Q got its bell rung; downgrade to Underweight

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BellRing Brands, Inc: 2Q got its bell rung; downgrade to Underweight

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BellRing Brands, Inc

2Q got its bell rung; downgrade to

Underweight

Rating Change - Credit

Downgrade 7s to Underweight 26 June 2026

We downgrade our rating on the 7% Sr Notes to Underweight from Marketweight as the High Yield Credit

company faces several challenges that are beyond its control, including (1) elevated United States

promotions from new entrants in the ready-to-drink market and (2) input cost inflation. Beverages

These challenges are likely to persist given (1) category growth is likely to encourage

fierce competition and (2) protein supply is insufficient given efforts by food companies William M. Reuter Research Analyst

to increase protein content. We believe sales and margins may be below guidance in BofAS

2H26 and cause spreads to widen. Lastly, the 7s trade 20 bps inside of the Single B +1william.m.reuter@bofa.com646 855 6363

Index at a yield of 7.1%. Michael DeRienzo

Research Analyst

Promotions and inflation challenging in 2Q BofAS+1 646 855 7973

2Q26 Adj EBITDA decreased 55% year-over-year to $54 million primarily due to (1) michael.derienzo@bofa.com

elevated promotional activity; (2) input cost inflation; and (3) increased marketing

investments. Revenue increased 2% to $599 million due to higher volumes (+11%), BellRing Brands, Inc (BRBR)

partially offset by price/mix (-9%). Adj gross margins decreased 1,180 bps to 22.7% due Key Data 2Q2025A 2Q2026A LTM

to (1) input cost inflation; (2) elevated freight; (3) higher promotions; and (4) an Operating (US$ mm)

inventory write-down of sourced product that did not meet quality standards ($11 Revenues 588 599 2,332

million).