Good day and thank you for standing by. Welcome to BellRing Brands Quarter (sic) [ Second Quarter ] Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Meyer, Investor Relations for BellRing Brands. Please go ahead.

Good morning and thank you for joining us today for BellRing Brands' Second Quarter Fiscal 2024 Earnings Call. With me today are Darcy Davenport, our President and CEO; and Paul Rode, our CFO. Darcy and Paul will begin with prepared remarks, and afterwards, we'll have a brief question-and-answer session. The press release and supplemental slide presentation that support these remarks are posted on our website in both the Investor Relations and the SEC Filings sections at bellring.com. In addition, the release and slides are available on the SEC's website. Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. As a reminder, this call is being recorded, and an audio replay will be available on our website. And finally, this call will discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Darcy.

Thanks, Jennifer, and thank you all for joining us. Last evening, we reported our second quarter results and posted a supplemental presentation to our website. I'm happy to share that we had an excellent first half, with Q2 results above our expectations. The business continues to accelerate as we bring on new shake capacity and begin to drive demand. For the first time since 2021, we executed 2 successful club promotions in 1 quarter, which sparked a ton of consumer and retailer excitement. Net sales grew 28% over prior year and adjusted EBITDA was up 53%. Our greater-than-expected shake demand, specifically non-promoted, drove the net sales and adjusted EBITDA margin out-performance. As you saw in yesterday's press release, we raised our outlook for the year. We now expect net sales to grow 16% to 19% over fiscal '23 and adjusted EBITDA to grow 18% to 24%. This raise at the top and the bottom line was based on better-than-expected first half performance, strong consumption trends, confidence in our capacity expansion and our decision to execute a price increase on shakes late in Q4. Moving to shake production. We have made remarkable progress in our plan to grow and diversify our shake supply. We are making more shakes every quarter with Q2 production coming in as expected and up significantly versus the year-ago quarter. We remain on track to grow production north of 20% this year, enabling strong net sales growth in '24 and increased weeks of supply by year-end. Now to the category and brand updates. The convenient nutrition category grew 5% in Q2 as tailwinds around health and wellness and fitness continue to drive growth. Consumer interest in functional beverages and sports nutrition products continue to be high with mainstream ready-to-drink brands driving most of the growth and bringing…

Thanks, Darcy, and good morning, everyone. Net sales for the quarter were $495 million, up 28% over prior year, above our expectations with strong demand for Premier Protein shakes, the biggest driver of the out-performance. Adjusted EBITDA was $104 million, an increase of 53%. Adjusted EBITDA margins were 21% and also exceeded our expectations, benefiting from favorable gross margins and leverage on higher net sales. Starting with brand performance. Premier Protein net sales grew 34% behind strong volume growth for RTD shakes and powders. Promotional activity, distribution gains and organic growth drove the increase in net sales. Shake consumption dollars grew 29% compared to shipment growth of 34%, with the difference driven primarily by the lapping of a prior year trade inventory deload. Dymatize net sales increased 5% this quarter as the brand benefited from increased distribution and promotional activity in domestic mainstream channels, along with international strength. These gains were partially offset by continued weakness in the specialty channel and increased e-commerce competitive activity. Gross profit of $164 million grew 40% with an increase in gross profit margin of 280 basis points to 33.2%. The margin increase resulted from net input cost deflation, partially offset by incremental promotional activity. Compared to our expectations, gross margins benefited from greater-than-expected non-promoted volume and nonrecurring cost favorability. SG&A expenses as a percentage of net sales were 14% and roughly flat to prior year. Advertising and promotion spend increased $3 million but was flat as a percentage of net sales at 3.1%. Before reviewing our outlook, I would like to make a few comments on cash flow and liquidity. We generated $16 million in cash flow from operations in the second quarter and $90 million in the first half. We expect net working capital growth in fiscal '24 to modestly exceed our net…

[Operator Instructions] Our first question comes from the line of Ken Goldman from JPMorgan.

I wanted to get a sense a little bit of -- I think you mentioned that non-promoted sales of Premier did quite well this quarter 2. And I'm just curious if I heard you right there, what do you attribute the acceleration kind of in those base products, too, in light of how well the promoted products did at the same time? Is there a natural correlation between the two just in terms of new generation? Or am I playing that up too much in my head?

Ken, so what still -- what has been true and what continues to be true is about 80% of our growth comes from outside of the category. So we continue to get a ton of new households into the category showed on our all-time high of household penetration this quarter and the 1-point jump up. I mean in general, the more we ship, the more we sell. And we really haven't had healthy fill rates in FDM yet. And so honestly, this quarter was -- we saw strong promotions in our 2 club customers, pretty much what we expected to see but what was higher was actually the non-promoted in pretty much all channels outside of those promotional periods.

Understood. And then as we think about the guidance raise, and we look ahead toward the upper end of that range, is there a potential -- and I'm not trying to fish for even higher guidance than what you've already looked at, but I'm just trying to get a sense of if there is demand there, how much above sort of the high end of your sales guide could you potentially get to, just given some of the capacity?

Yes. We have production that can absolutely satisfy the full range of our guidance, obviously. As I've said on past calls, we need to -- we do not have enough internal inventory. We need to build safety stock. However, toward the end of the year, we plan to get up to our target of 6 to 8 weeks. If demand continues to be robust, then we have the flexibility to toggle between building more inventory versus going and satisfying sales. So I think we've always said that we're going to be nimble this year just because of -- that we are building safety stocks, internal inventory, but rest assured that we have the production to satisfy the high end in our full guidance and then we're going to have to just assess the situation in Q4 to...

Our next question comes from the line of David Palmer from Evercore ISI.

It was obviously a pretty dynamic quarter with some of the ramp-up in promotion mix with the 2 club promotions. But at the same time, you had the strong gross margin. So I wanted to kind of double-click on those 2 things. What were some of the learnings, both in and out of expectation from the increase in merchandising from the quarter? And I know this -- you mentioned the 2. I was wondering if that meant that, that was unusual or if this is pretty close to the norm that you would expect in terms of the impact to price mix from promotional activity in the upcoming quarters.

Paul, I'll start with learnings and then you can hit on any price mix, different things. So the learnings from the promotions, so remember, we haven't done really any significant club promotions or promotions at all since 2021. So it's been a while. So we weren't exactly sure what to expect. Honestly, there was a ton of excitement. I've talked about this before. The key to -- for our success on promotion is display. Get out of the aisle, get new people to see our product, and that is where we increase household penetration. We get the bump and stick for the brand. It has been true for the entire time this brand has been around. So sure enough, that is exactly what happened. We got great displays and a ton of retailer support for the events, and that flowed straight into strong results. So I would say I don't think it's a lot of new learnings but more confidence that the fundamentals of the brand are very much intact, and there's a ton of excitement from consumers and retailers.

And then on pricing, we always expected the second quarter to be the most significant headwind on pricing because of the significant promotional activity that we were doing on shakes. As we entered in the second half, we still expect some light promotion in Q4 on shakes, expecting major headwinds or tailwinds in any given quarter on pricing. And then as we get late in Q4, we are modeling a light benefit in the fourth quarter on pricing. But again, it's late in the quarter, so it's a pretty modest benefit. It's more about '25. But net-net, not a lot of -- at least on the shakes, not a lot of pricing, really, impact there.

And then just on the gross margin, the 300-or-so basis points expansion there. How would you describe that maybe build up to the 300 in the quarter? And how should we think about that going forward?

And your question is compared to a year ago?

Around gross margins. I think if you had to -- I know it's hard to break out specifically how many basis points are due to each thing. But if you had to just talk about commodity, price mix and then volume leverage, net of promotions, how would you think about the gross margin expansion this quarter? And then how does that apply to the second half?

Sure. So from a gross margin perspective, significant expansion was from lower protein cost. So as you may recall, last year, we had very high protein costs, especially in our powder business in Q2 and into Q3. So if you think about last year's -- last year by quarter, the second and third quarter were by far the highest protein cost. And then in the fourth quarter, they started to pull back, which is why you see stronger gross margins in our fourth quarter a year ago. So as you look at Q2 specifically, significant expansion at the gross margin line. That's partially offset by significant promotion offsetting that. We also saw about 50 basis points of favorability from what I would call just some nonrecurring items. So co-man, true-ups, payments for missing on minimum volumes, that's about 50 basis points, but most of the expansion is just protein costs offset by promotion.

Our next question comes from the line of Thomas Palmer from Citi.

I wanted to maybe start off back on the input cost environment, it sounded like you're expecting less favorability as we move through the year, but you also noted 3Q, a year ago, was a bit elevated along with the second quarter. So is it kind of less deflation as we move into 3Q? And then is there a point we kind of return to inflation? Or is that more a fiscal '25 consideration?

Yes. So if you look at the second half, we are expecting cost to go up from the second quarter, mostly on our powders, which go up significantly. It's about a 50% increase from Q2 to Q3. So it's significant. Shakes start to modestly head up higher in the third and fourth quarter on proteins. So from a sequential basis, increases, versus a year ago. We still see very significant favorability on proteins in the third quarter, but it does start to significantly moderate in the fourth quarter. So there's a very little benefit in the fourth quarter, but still pretty significant favorability in the third quarter. And again, that's just the dynamics of lapping last year's high kind of peaks at Q2, Q3 last year, and we're seeing kind of the, I'll call it, the floor in the current protein environment here in the second quarter, then it starts to head up again. So that's the dynamic. So we still should see some favorability in the second half but mostly in the third quarter on our proteins.

And then just on marketing, I think one thing you talked about in recent quarters is kind of some flexibility to pull back on marketing if demand is running particularly strong. And I realize some of this -- that you're talking about with marketing is a shift maybe between brands, but it does seem like Premier, you've got kind of limited safety stock, very robust demand in the quarter. To what extent are we seeing kind of a shift there with a pullback in Premier versus a ramp-up in Dymatize? And how does that kind of net out as we think about the second half versus what you planned on initially?

Yes. We have decided to -- I'll start and then you can add, Paul. We decided to pull back to -- and move the major equity campaign to -- from Q4 this year to '25, but we pivoted some of those dollars to both Premier powder, Premier bottles and Dymatize. So think of kind of the Tetra side of our business on Premier as being the constrained side. But -- so we're still spending but on the other parts of our business, but not just Dymatize. So definitely spending on Premier powder and bottles.

And just to expand, yes, I mean we called previously for low 3s, kind of 3%, 3.5% for the year. We're still in that ballpark. As Darcy said, we have toggled a little bit between brands and pulled back slightly from maybe -- from our prior expectation, but it's a modest change.

Our next question comes from the line of Bryan Spillane from Bank of America.

So just two. One, a clarification, Paul, just following the discussion around gross margins in the back half of the year. So will gross margins be up a little bit more in the third quarter versus last year than they will be in the fourth quarter? It sounded to me like 3Q, 4Q should be roughly similar, maybe 3Q a little better because you won't have as much promo and then 4Q a little less gross margin expansion. But I just want to make sure I was hearing that correctly.

Yes, you've got it correct. So we don't see -- Q3, Q4 ought to be pretty similar from a margin perspective at gross margin. And you're correct that you will see from a year ago perspective, much more favorability in the third quarter than the fourth, and that's the protein dynamics as proteins start to step up in our second half where they started to step down in last year's Q4. So that's why the favorability is less in Q4, but still favorable.

All right. And then, Darcy, can you talk a little bit about what would be -- rather than household penetration, just kind of how the sort of consumer base is changing, if it has. So I guess what I'm asking is just, are you recruiting more kids, male versus female, age cohorts. Initially, this was a pretty relatively narrow consumer base. But I'm just curious if it's expanding. And I ask that, I guess, in the context of, I think, with Fairlife and Core Power, they're definitely seeing a pretty wide age cohort, especially young drinking it. So I'm just curious with Premier shake specifically, right, if you're beginning to kind of widen the consumer base.

We definitely are. Not kids though, this is definitely adult brand. I mean it's high protein. So -- but it is more of an adult brand. But absolutely, as we honestly like both the [ Coke ] side of the business and our side, we're the ones driving that category growth with these new households. So we are bringing in -- yes, we're bringing in younger people, but honestly, like with such a low household penetration brand, we're bringing in just a really diverse set of age and gender, et cetera. So what's unique about Premier, and I know I've talked to you guys about this, is our ability to really source volume from all ages, kind of people looking for different things. So #1 reason why people enter Premier is to lose weight, but we also source volume from the adult nutrition side of the business, from sports nutrition, we range -- our range of consumers is very, very wide, and we actually -- more than many other brands out there. We actually have a pretty even split of gender. So what is magical about this brand is just how broad it is and that -- you can see that in our consumer -- the consumers that we're bringing into the brand.

Our next question comes from the line of Robert Moskow from TD Cowen.

I think in your prepared remarks, you said that TD points are showing signs of stabilization in most recent periods, and the out-of-stocks have stabilized. How soon do you think it will be before you can get those ramping higher again? Like is it in the next few weeks, we should expect TDPs to start recovering higher or not?

Yes. We'll see improvement kind of every month. So we'll see improvement throughout Q3 and then we'll get back to kind of all-time highs in Q4.

Okay. Great. And then a quick follow-up. These club promos you did were obviously very successful. Do you think your competitors are going to conduct similar promotions in the second half of the year? And if so, does that present any like risk of a shock to your demand in that channel or not?

So from a club promotion standpoint, I mean most competitors are already doing promotion. So there's an exception of the -- Fairlife hasn't been doing promotions, but I expect them to -- when they get in a good supply -- in a supply situation that they will as well. But we're pretty complementary. I mean, I always go back to that there is room for 2 strong brands in a low household penetration, high growth category. And we have both been very successful in every single channel, but specifically in the club channel.

Our next question comes from the line of Kaumil Gajrawala from Jefferies.

Well done. Can you talk a bit about aisle placement, I think for quite some time, it was about moving the products to other parts of the store. And with the business still being so sort of linked to feature and display and pulling them out of the aisles. Are you able to shift where in the store you are or increase the number of places you are within the store?

So our focus right now is just really [ good to have ] in stock within the pharmacy. We are, as I said earlier, display is a huge driver for us. So we still think that there is a lot of upside within the pharmacy, just getting displays kind of outside of the pharmacy. Longer term, we do see -- so think of it just as incremental display that could include some incremental placement. We already are, so for instance, in some mass retailers and food retailers. We have singles up in the cooler, so it's more for like a grab and go. So we're aggressively going after those kind of opportunities. So to answer your question, yes, we are absolutely looking for the more places we can be in the store to -- kind of to introduce our brand to more people, the better. I think that eventually more in kind of the medium, longer term, we do think it's interesting to actually change aisles, but for now, we think that there's a ton of upside just through building our base business within the pharmacy section and then getting incremental placement and display throughout the store.

Okay. Great. And on the price increase, maybe just some more details on why is it linked to where costs are? Because it looks like it's coming through just as capacity is going to kick up again. So just any more details on the thought process behind price increase.

Sure. Yes, we've seen cost increases in co-man costs, logistics, packaging, and so -- and actually, many of our competitors have taken price. So we are -- our biggest competitor took price in Q1. So this is -- and mainly, it's because the entire category is really seeing rising costs. Honestly, outside of kind of dairy inputs. However, dairy inputs are also supposed to, as Paul talked about, to start rising again. So it's late in the year, we talked about late in Q4. And I think that we feel comfortable with our price difference versus competition after the price increase.

Our next question comes from the line of Jim Salera from Stephens.

Darcy, I wanted to drill down a little bit on the TDPs that you mentioned from the out of stocks. Do you have any sense for what retailers did with those shelf placements as there were some out of stocks, did they flex bars in? Do they move a competitor in? Just any color there would be helpful.

So what we know is no space -- we didn't lose any space. So that is where we knew that it was going to be temporary. And honestly, Jim, it's -- they're sporadic. So there -- so for what happens is that we have certain flavors, a 4-count going out for a period of time then 12-count. And so the space, retailers -- honestly, there are holes on the shelf occasionally. So it's not about that maybe they expand the products on the shelf to kind of fill in the holes, but the idea is that it is for a relatively short period of time, and it's never so broad that the entire brand is off the shelf.

Okay. That's helpful. And then, I guess, as a follow-up to that, do you have the ability to see, for example, if my favorite flavor isn't on shelf, do I just then reach for chocolate, which is 2 slots down? Or does that typically end up in just kind of a lost sale?

Yes. You're describing the challenge with forecasting because what we're finding is that, yes, there's -- for the most part, there is -- especially because our biggest capacity constraints has been on 4-counts. So consumers will just change to a different -- most of the time to a different flavor. Every once in a while, they'll also change to a different pack type. So 4 counts not -- 4-count chocolate is not available, they'll go to 12-count chocolate, for instance. There's even some channel shifting so they might go to a different channel because it might be available there. So that is the challenge of forecasting accurately because there's so much interplay between the flavors and the pack sizes. For the most part, they are staying within the brand. Every once -- there are times, and I would say it's more the minority that if somebody has a favorite flavor, they will just kind of wait to purchase for that cycle and then they'll see if it's back on the shelf the next time they shop.

Our next question comes from the line of Matt Smith from Stifel.

I wanted to ask, Paul, a follow-up question about the third quarter guidance. You said it was tracking to the implied second-half growth rates for revenue, then -- probably, it's fairly even phasing of growth in the second half of the year with a tougher comparison in the fourth quarter. Do I have that right? And can you talk about the phasing of promotional activity for the rest of the year? Are there any large incremental events year-over-year that we should be aware of?

Yes, you were tracking it correctly that we expect growth to be pretty similar in Q3 and Q4 compared to a year ago. In the fourth quarter, we have some light promotion, but it's nothing -- we also had some promotion -- light promotion on shakes in the 4th quarter of last year. So I think overall, there's not a dramatic change in promotional activity between the years.

Just one more follow-up for me, and I'll pass it on after. Shipments were in line with consumption in the current quarter. Do you expect that to persist through the second half of the year? Or is there a potential for retailers to start to increase their inventory levels exiting the year?

Our expectation is that shipments and consumption will largely track it would likely modestly swing towards shipments. It's a little bit of an inventory load but nothing -- we're not expecting anything dramatic in the second half. So again, we're trying to replenish shelves as well as keep up with the demand. So we expect a little bit of shipments above consumption in the second half.

Our next question comes from the line of Matt McGinley from Needham.

You noted the increased e-commerce competition for Dymatize this quarter, can you expand on what you saw there competitively? And is that something you expect to persist? Or is that something that was more unique to this quarter?

Yes, this one is a new one. So obviously, Q2, a new year, new you, we always see increases in promotion and marketing because it's the time when the most new people enter into the category. But this year was much more extreme than in the past, meaning a ton of more of the emerging brands, so the smaller brands doing very deep discounting and really leaning into marketing. So highly competitive, and I would say, and that's very much the entire powder category. We also saw some consumers seeking value, so not only buying brands on deal that I just referenced, but also some trading down to value brands. And then even staying what we saw -- what -- in Dymatize is actually buying -- looking for value, but actually upsizing. So going from a 20-serve for instance, to a 5-pound because it was a better value. So a lot of deal shopping in general, just value seeking. And from -- if we -- do we expect it to continue? It continued in April. So I think in general, we expect that it will continue through Q3. I think the big question is in the powder category, when commodities decrease, for the most part, competitors invest that money into promotion. Well now prices -- commodities are going to start increasing again, so we do believe that there will be less deep discounting because of that.

That makes sense. I had one quick follow-up on the revenue trend in the back half. It's a little bit difficult to tease out your seasonal trends given all the volatility you've had in the supply chain for the past few years. But do you expect the third quarter to generate more revenue than you did in the second? Or does that step down?

We would expect it to modestly increase from the second quarter sequentially.

Our next question comes from the line of Jon Andersen from William Blair.

Two quick ones. I was just hoping you could give us an update on your kind of capacity plans, not for the balance of '24, but looking out to '25 and supporting growth in 2025. What your expectation is there in terms of shake capacity additions? And then the second question is just on powders. It looks like Premier Protein powder was up, consumption was up very nicely in the quarter. Dymatize a bit softer. Are you seeing anything in the market that would have you may be thinking about balancing your resources against those 2 equities differently going forward in the powder segment?

So production first. So '25 production, we feel good about the production increases. So just -- I know you weren't asking about '24 but on track for 20% plus production increase. And remember, that was always back-end loaded. So we are expected to see strong production. We saw a strong production in Q2 and that will continue into Q3 and Q4 of this year. When we go into '25, that will continue into '25. So without specific numbers, we have enough production to support high end of our algo plus buffer capacity plus any -- so -- the needed production to rebuild internal inventory, if we do not get back to target levels by the end of '24. So I feel really good about the production ramp-up just know that we are still scaling up our 2 greenfield facilities. And so those start every quarter becoming more and more important. So that's one piece. Secondly, around powder. The one thing I didn't say when I was talking about e-com and the dynamic of consumers seeking value, Premier has been a big beneficiary of that. So think of Dymatize as being kind of a super-premium athletes brand while Premier is very much a mainstream powder brand that is a good value. And so we've actually seen one of the reasons why Premier is doing so well is because of the dynamic going on. So yes, to answer your question, I think it's less about diverting resources from Dymatize to Premier Powder, but we have the ability to support both businesses. And we will continue to increase the support on Premier Powder because we're really encouraged by that format. And I mean, I said it in my prepared remarks, but we believe, with 80% of the growth coming from outside of the category, we really think that Premier can help mainstream the powder category very much like the brand did for RTD. So we're really bullish on the opportunity with Premier powder.

Our next question comes from the line of John Baumgartner for Mizuho Securities.

Maybe first off, just wanted to follow up on promo, Darcy, and getting more display outside of the aisle. Right now, this category and brand stand out for growth and retailer interest follows. But also takes you into greater, I guess, conflict or overlap for space with other food and beverage that's maybe higher margin for the retailer or I guess, even general merchandise. How you think that's sustaining outside the aisle merch over the longer term? I mean is placement mostly contingent on retailers maintaining? Is there interest in health and wellness shelf sets? Does the cost of display go up? Is outside the aisle just definitely more of a seasonal phenomenon? How do you think about that over time?

It's an interesting question. So I can tell you that every single one of our conversations with retailers, they are -- they see the trends within health and wellness. They see the growth coming from this category and specifically RTDs. And it is stronger than almost any other category in the store. So it has the attention. It has the support. They also know that it's a low household penetration category. So the growth should continue. So I think it's less about -- I think it's less concern around the retailer support and borrowing from other categories, I think it's there. Right now, our conversations are really -- and we're seeing it is that space is increasing. Space is increasing not only for RTDs, but within -- and taking space from the other parts of the business, or the other segments, but also increasing the overall space for convenient nutrition. So if you're talking about displays, obviously, it's more competitive, but the retailers appear to be very excited about the opportunity, and I've never heard the margin push back as to giving display space versus other categories.

Okay. And then in terms of Dymatize and the e-commerce pressure there, you stressed pricing as a big factor. But I'm curious with the advantage Dymatize has over the emerging brands in bricks and mortar and marketing resources, is there anything you can do in physical channels to drive more engagement, more ingredients awareness and sampling purchases that then converts back to stronger e-com sales even at the higher price points?

Yes. I think there's a lot Dymatize can do. I mean, I think that we learned a fair amount this last quarter. I think it caught us a little off guard that how aggressive a lot of these emerging brands were on e-com. And we had a marketing campaign, but we were a little conservative on the weight. So our share of voice was lower than it needed to be. So I think kind of learning, we're going to be aggressive on the back half, not only with marketing campaign across all channels but really supporting e-com. We're going to be looking at maybe a little more into promotion just to be competitive. And then also just from a campaign standpoint, really excited about Christian McCaffrey and being able to -- that is just a timing thing of when we signed him and when we can actually get assets out there. So that's going to be really exciting to be able to lean into his celebrity and push that out. So Dymatize is an amazing brand, it's -- second biggest whey protein brand on e-comm. So I feel great about the business, a little bit of learning in Q2, but nothing that I don't think we can -- we'll be able to write it in the back half to get back to growth.

Our next question comes from the line of Bill Chappell from Truist Securities.

Darcy, just maybe a follow-up on Bryan's question in terms of new consumers. And I just didn't know if there's a way to quantify like percentage that are now male, the repeat rates, stuff like that, that you might have. And the reason I ask is just -- and this is not specific to you, I just have a tough time with the household penetration kind of metric because it would -- you cited that you have low household penetration, but then also being at 18%, 19% seems like 1 in 5 households is pretty good household penetration for this stage of the category or even to say, 1 in 5 households of a beverage category, it seems like you should be a lot bigger in revenue. So I'm just trying to understand what does that mean? Or how do you look at the opportunity beyond household penetration? Or even how do you quantify household penetration to kind of get you excited? Because it seems like repeat rate or quantifying new consumers into the category would be helpful, at least to us to better understand the metric.

Okay. So...

Sorry there was a lot in there.

No, I know. It's a great question, Bill. So okay, first of all, men -- male, female split. So I think, again, what's unique about Premier is it's a pretty even split, a little more male than female. So call it, 60-40, 55-45, but good split between male and female, that is unique. So you think of the diet brands, more women than men; for nutrition, more men than women. Most of the other brands in the category kind of have a specific lane and a defined consumer, and really, it's hard because of the brand to get out of that. So that is one of the things that's really unique about Premier. So first of all, just hit that one. On the household penetration and repeat rate, so here's the way I look at it. First of all, strong category-leading repeat rate, about 50%. And on the household penetration, so we're right around, call it, 18%. The RTD shake category, about 45%, convenient nutrition overall about 75%. So overall, I think that like there is a lot of room. When I go to another category, which is relatively new, but more mature or relatively kind of conflicting. I guess about -- they're about the same age, so to speak, but bigger is energy drinks. And when I look at that, the energy drink category, about the same household penetration as convenient nutrition, so call it 70%, 75% but the #1 market share and #2 market share players are at 50%. So I look at that and I'm like, okay, so there is a ton of room to grow here knowing that the top 2 brands are bringing in a lot of new consumers, 80% of our growth is coming from outside of the category. And that -- and it's already coming from outside of the category, and we really haven't started marketing. That just tells me there is a ton of room to grow, both the brand as well as the category. Does that help, Bill?

Yes, yes, definitely. I'm sorry, I could probably keep going, but I will keep the call short, just -- and go to Dymatize, one follow-up. Do you think the growth of Premier powder is leading to some trade downs that's affecting Dymatize or is it mainly discounting from other brands?

They're very different consumers. There is not a lot of interaction. So definitely other brands. And like I said, so the beauty, again, same dynamics between Premier RTD and Premier powder. Over 80% of the growth on both businesses are coming from outside of the category. So it's less switching and trading down. But actually, consumers are entering the powder category through Premier.

At this time, I am showing no further questions. This concludes today's conference call. Thank you for participating. You may now all disconnect.