Why BellRing Brands Stock Was Plummeting This Week
Key Points
The market wasn't kind to the shares following a quarterly earnings report.
This showed sluggish revenue growth and sharply declining profitability.
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Largely because of a poorly received earnings report, BellRing Brands (NYSE: BRBR) was an unpopular stock over the past few trading days. Several post-earnings price target cuts by analysts also dampened sentiment.
BellRing's stock got its bell rung as a result, falling by nearly 21% across this week, according to data compiled by S&P Global Market Intelligence.
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First-quarter flop
BellRing, a maker of nutrition beverages and comestibles, reported its first-quarter fiscal 2026 results on Tuesday.
Image source: Getty Images.
Net sales for the period were marginally higher at just over $537 million. Net income not in accordance with generally accepted accounting practices (GAAP) decreased sharply to just under $45 million ($0.37 per share) from first-quarter 2025's more than $76 million.
However, the consensus analyst estimate for non-GAAP (adjusted) net income was $0.32 per share. BellRing also beat the average pundit expectation of just under $504 million.
On the same day it announced those results, BellRing divulged that its CEO Darcy Davenport is retiring from the company, effective by Sept. 30 at the latest. The company's board of directors has launched a formal search for her replacement.
A haircut to the top end of guidance
Yet BellRing's share slide was due more to a guidance adjustment than anything else. The company trimmed the high end of its sales forecast and adjusted its earnings before interest, taxes, depreciation, and amortization (EBITDA) outlook. For full-year 2026, it's now modeling net sales of $2.41 billion to $2.46 billion, and adjusted EBITDA of $425 million to $440 million.
Almost immediately following the earnings release, several analysts reduced their price targets on BellRing. Among this group was UBS's Peter Grom, who cut his from $26 per share to $23 while maintaining his neutral recommendation.
Although the quarter wasn't the disaster some might have considered it, the stagnant top line and eroding profitability would worry me if I were a shareholder. Plus, BellRing operates in a competitive, narrow-moat business. That makes it look like a sell just now.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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