Q4 2023 BellRing Brands Inc Earnings Call

November 21, 2023

Question there'll be a question and answer session to ask a question. During this session. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star. One again, 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 Bell ring.

Good morning, and thank you for joining us today for <unk> brands fourth quarter 2023 earnings call with me today are Darcy Davenport, our president and CEO and Paul wrote our CFO, Dorothy and Paul will begin with prepared remarks, and afterwards, we'll have a brief question and answer session.

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 salary Dot 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 fourth quarter and fiscal 'twenty three results and posted a supplemental presentation to our website.

Fiscal 'twenty three was a fantastic year for <unk> brands.

Our net sales grew 22% with adjusted EBITDA of 25%.

As I reflect on the year. There were there are three things that stood out to me.

The first is the expanding growth opportunity of this category specifically the segments that we compete in ready to drink shakes and ready to mix powders.

Both segments have experienced double digit growth in each of the last three years.

Low household penetration combined with strong macro trends highlights a long path of growth.

Second the power and the future potential of our brands. This year, we saw tremendous growth on premier protein and diamond ties, both reaching new highs across many key metrics.

Premier protein demonstrated strong resilience.

Quickly regain the PDP and households lost in prior years during our capacity constraints.

This shows the unbelievable consumer and retailer excitement around this brand, which will help fuel future growth.

Third.

I have been blown away by our organization is hard to manage a high growth business with limited supply.

It is a heavy load on all functions to optimize supply and demand, especially operations and sales.

Despite this added pressure our organization is stronger than ever a reflection of the amazing people and our unique culture.

We still have work to do.

But are well positioned for a strong 24 and beyond.

Now to Q4 I am pleased to share our results came in at the high end of our expectations net sales grew 25% over prior year and adjusted EBITDA was up 23%.

Significant production growth allowed us to restart light shake promotions this quarter.

We gained meaningful new shelf space on both premier protein and diamond ties and a relaunch shake flavors and seasonal offerings continued to drive incremental sales.

Moving to shake production.

In fiscal 'twenty, three we made notable progress to grow and diversify our shake supply.

Our production grew 17% over fiscal 'twenty two.

Modestly above our expectations.

We added two co Mans this year, which continue to scale up.

And our second Greenfield facility, Michael Foods will start up in December.

There will be a much larger contributor to our second half of fiscal 'twenty four and beyond.

Over the past two years, we have transformed our shake co man network, we have partnered with the biggest and most reputable players in the a septic low acid industry. We now have a scalable regionally diverse supply chain, which will enable many years of robust growth.

Now to the category and brand update that.

That convenient nutrition category grew 9% in Q4 as tailwind around health and wellness and fitness continued to drive growth.

Consumer interest in functional beverages, and sports nutrition products continues to be high.

To drink led the category at 21% and ready to mix grew 11%.

Increased supply and distribution gains are lifting ready to drink growth while increased marketing is boosting both segments.

Premier protein shake consumption accelerated this quarter up 36%.

Growth was tremendous across all channels, driven by improved supply, which allowed us to restart light promotion and expand distribution.

The highest growth was in mass and e-commerce benefiting from our expanded range of flavors and higher in stock levels.

Additionally, E Commerce and club both saw strong growth behind promotional activity.

Our fall seasonal flavor of pumpkin Spice demonstrated an impressive 90% incremental to the brand.

Q4 trends continued into October with shake consumption up 27% with volume driving two thirds of this growth.

Our brand metrics reflect our building momentum as premier protein reached all time highs in PDP and market share.

Sheikh Tdp's grew 11% versus Q3 behind distribution gains and relaunched shake flavors.

Premier protein RTD market share reached 21% maintaining its position as the number one brand in the RTD segment as well as the number one <unk>.

One brand in the broader convenient nutrition category.

Premier protein household penetration added one percentage point versus Q3, reaching over 16% of households are.

Our household penetration continues to be the highest in the category with this quarters growth driven by promotions and distribution gains.

Our repeat and buy rates are holding steady demonstrating our consumer loyalty.

According to our most recent brand equity steady premier protein remains the number one brand I love and net promoter score in the RTD category.

We are very encouraged by all of these achievements, even though we still haven't restarted meaningful marketing and promotion.

Premier protein saw great success. This year in other forums showing the power of the brand in Q4 Premier protein powders remained strong growing over 50% behind new distribution and strong velocities. It reached over $50 million in net sales this year and we expect robust growth in 'twenty four as we.

First behind marketing programs to drive awareness.

In addition to powder, our licensing strategy continues to perform well, although not a significant revenue driver. We are encouraged that the brand has seen success and other high traffic aisles.

Turning to diamond ties the brand had a great quarter with consumption up 38%.

We saw double digit growth in nearly all channels driven by distribution gains and incremental promotion.

Consumption growth continued into October with the brand up 23%.

<unk> continues to have success in mainstream channels with both PDP and household penetration, reaching new highs this quarter.

Encouragingly as diamond ties as new households, and distribution points repeat in buy rates are holding steady.

In fiscal 'twenty four we are launching a new marketing campaign to continue the momentum and drive awareness and new users to diamond.

Before reviewing our outlook I want to give our point of view on GOP, one weight loss medications.

Our proprietary research indicates consumers most likely to adopt GOP ones are currently light users of protein shakes, but will become heavy users once on the medication.

These individuals have reduced total caloric intake, but actually need more protein to mitigate muscle loss in certain other side effects.

Products like Premier protein are perfect because they are delicious compact size high protein nutrition, giving these individuals what they need without making them feel overly full.

Research also indicates that once on the medication consumers start exercising more in choosing healthier food and beverage options ultimately increasing the demand for convenient and sports nutrition products.

After our initial phase of research, we believe our current products and growth strategies are already well aligned with this opportunity are great complements to <unk>.

While consumers are on the medication and a perfect nutrition solution when people decide to stop taking the drug to maintain the weight loss benefit.

We have begun our next phase of research to better understand this consumer and how we can serve them on this important health journey.

And 24, we plan to test media platforms and created to determine the strongest most effective strategies and tactics to reach these consumers.

We are encouraged by the early results of these medications and feel that they strengthen the already strong macro trends behind our category and specifically our business.

Now to our outlook.

As you saw in yesterday's press release, we expect fiscal 'twenty for net sales to grow between 10%, 15% and adjusted EBITDA to grow between fixed and 15%.

At the midpoint. This guidance is on the high side of our long term algorithm in both net sales growth and adjusted EBITDA margin.

As a reminder, our algorithm in net sales growth is between 10% to 12% with EBITDA margins of between 18 and 20%.

Our plan reflects strong volume growth for both premier protein and diamond ties and the restart of shake promotions in the second quarter.

We plan to step up marketing unshaped in Q4, which is when we expect to hit our target weeks of supply.

The demand and supply dynamics remain tight for most of the year and we will continue to be nimble. So we can navigate effectively.

In closing I'm thrilled with our performance. This year, we continue to gain momentum in every part of our business strong macro trends are driving sustained long term growth in our categories Premier protein and <unk> continue to reach new consumers and maintained all time high market share positions our flavor strategy.

He is working in our innovation pipeline is rich, enabling us to bring excitement to consumers and retail partners.

Last we are moving forward on our shapes kept capacity plan to support our future growth.

Before passing over to Paul I'm sure. Most of you have heard that Rob Vitale, Our executive Chairman is currently on medical leave we have been in close contact with him over the last several weeks, we wish him and his family the best throughout his recovery and we'll be excited to have him back at full strength soon.

I will now turn the call over to Paul.

Thanks, Darcy and good morning, everyone.

As already highlighted our fourth quarter results came in at the high end of our expectations.

Net sales for the quarter were $473 million and adjusted EBITDA was $99 million.

Net sales grew 25% over prior year and adjusted EBITDA increased 23% adjusted EBITDA margin of 28%.

Starting with brand performance.

Protein net sales grew 30% with volume growing 21%.

In Q4, our shale production increased meaningfully over prior year, which allowed us to restart modestly promotions driving growth.

Volumes also benefited from the relaunch of temporarily discontinued flavors performance of our seasonal offerings and strong growth from our premier powders.

Net pricing for Premier protein grew 9%, reflecting the October 2022 price increase.

Shake consumption dollars grew 36% outpacing shipment growth of 29%.

Ladder was modestly impacted by the lapping of a trade inventory build in the prior year.

Okay.

<unk> net sales were relatively flat this quarter as the brand faced a tough prior year comparable.

Recall last years Q4 had heavy trade inventory build in the international domestic specialty channels.

Headwinds combined with continued weakness in the specialty channel was offset by strong growth in domestic mainstream channels, driven by distribution gains and organic growth.

Gross profit of $155 million grew 27% with an increase in gross profit margin of 60 basis points to 32, 9%.

The margin increase resulted from improved pricing that mitigated input cost inflation.

This was partially offset by incremental promotional activity.

Excluding onetime costs in the prior year period, SG&A expenses as a percentage of net sales increased 40 basis points half of which was driven by higher marketing spend.

Operating profit of 78 million increased 17 billion compared to prior year and was negatively impacted by $7 million of accelerated amortization.

This was a non cash expense recorded in connection with our decision to discontinue the power of our North American business. It was treated as an adjustment for non-GAAP measures.

We expect the remaining $17 million noncash accelerated amortization to be recorded in the first quarter.

Our international power of our business is unaffected by this decision and continues to grow.

Turning to full year 2023 results net sales were approximately $1 7 billion up 22% over the prior year with gross profit of $530 million growing 26%.

Gross profit margins increased 100 basis points over 2022, driven by pricing actions that mitigated input cost inflation, along with favorable freight rates.

SG&A expenses were $216 million and excluding onetime items increased 60 basis points as a percentage of net sales.

Higher marketing spend drove the increases or marketing spend in fiscal 'twenty two was exceptionally low.

Modest leverage on our remaining G&A base.

Adjusted EBITDA increased 5% to $338 million with a margin of 23% an increase of 50 basis points.

Before reviewing our outlook I would like to make a few comments on cash flow and liquidity.

We generated $85 million in cash flow from operations in the fourth quarter and $216 million for the year.

In fiscal 'twenty, three net working capital declined slightly despite our strong topline growth.

In fiscal 'twenty for our net working capital growth will moderately exceed our net sales growth rate as we add weeks of shake supplier.

As a result, our cash flow in fiscal 'twenty, four will be modestly lower than fiscal 'twenty three.

During the quarter, we repaid $54 million against our revolving credit facility.

As of September 30, net debt was $817 million net leverage was two four times.

With our EBITDA growth and strong cash flow generation, we anticipate net leverage to fall under two times by the end of fiscal 'twenty for us.

Yes.

With respect to our share repurchases. This quarter, we bought 200000 shares at an average price of $39 20 per share or $8 million in total.

For the fiscal year, we repurchased four 2 million shares at an average price of $29 56 per share or $125 million in total.

Our remaining share repurchase authorization is $23 million.

Turning to our outlook, we expect fiscal 'twenty four net sales of $1 83 to $1 91 billion and adjusted EBITDA of $360 million to $390 million.

Our guidance implies strong topline growth of 10% to 15% and adjusted EBITDA growth of 6% to 15% with healthy adjusted EBITDA margins of 20% at the midpoint.

We expect dollar and percentage growth for both measures to be weighted to the first half of the year.

From a brand perspective, we expect double digit sales growth for both from your protein in Diamond <unk>, driven primarily by volume gains and continued category tailwind.

Key drivers of Premier Protein's volume growth include increased promotional activity distribution gains in the first half benefit of our relaunched flavors.

Organic growth and distribution gains are the primary volume drivers for Diamondback.

Yes.

We expect fiscal 'twenty four adjusted EBITDA margins to be largely in line with fiscal 'twenty three with increased gross margins offset by higher SG&A.

Gross margins are expected to benefit from favorable input cost, notably in the first half of the year offset partially by higher promotional activity.

Investments behind our brands, including promotional and marketing spend are expected to skew higher in both the second and fourth quarters.

Turning to our first quarter forecast, we expect low double digit net sales growth compared to year ago.

Expect strong growth from <unk> as it hasnt easier prior year comparable lapping of trade inventory deload in the international and domestic specialty channels.

Premier protein sales growth is expected to be in the high single digits as we lapped prior year trade inventory build which we estimate to be a low double digit headwinds from years growth rate.

As a result, we expect assumption growth to outpace net sales growth as we lap this headwind.

Consumption growth will also benefit from higher net pricing as price increases at retail lagged our October 22 price increase on shakes.

Yeah.

We expect first quarter adjusted EBITDA margins to be similar to prior year as higher SG&A as a percentage of net sales was offset by higher gross margins.

Gross margins are expected to benefit from lower protein cost offset partially by increased promotional spend and other input cost inflation.

In closing we are encouraged with our strong performance in fiscal 'twenty three our momentum continues to grow and we're excited about our prospects in fiscal 'twenty four.

I will now turn it over to the operator for questions.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Yeah.

Our first question comes from Andrew Lazar with Barclays. You May proceed.

Great. Thanks, so much.

Firstly on your third quarter earnings call you provided initial 24 guidance to be at the high end of your long term algorithm on sales and EBITDA margins and today you provided a range for guidance, which as you said at the midpoint correlates to that.

There is a wider range, particularly on EBITDA that.

That you provided and I guess my question is just does that indicate some things may be changed and your confidence in the outlook. It.

It doesn't seem that way from all the metrics you provided but if so maybe you could get into some of the key factors or maybe I'm just reading too much into the range that you provided.

Yes, there has been no change in our confidence.

I think that the yeah, I wouldn't I wouldn't read too much into the slightly expanded range and EBITDA. Okay. And then Paul I think pricing I think was expected to be somewhat lower year over year in shakes in 'twenty four just in light of kind of the move in dairy protein costs, I guess, what sort of magnitude.

Should we expect around.

Around pricing and premier protein and have you seen any shifts in sort of competitive behavior. Along these lines that may have impacted your initial thinking on on the shape of pricing will likely take in 'twenty four thanks, so much.

Yes, we had planned in 2004 to get back to more normal cadence of promotion and so that would obviously drive.

Pricing headwind for the year, so we're calling for a low to mid single digit headwind on pricing to net sales growth as far as competitive dynamic.

I wouldn't say anything has dramatically changed we've actually seen some competitors take pricing higher.

Recently, because keep in mind, it's not just protein costs, we have but we're seeing those obviously were expecting those to come down in fiscal 'twenty four but were also seeing inflation across a lot of the other input cost, including packaging and manufacturing costs alone net we expect to be partially a somewhat favorable from a overall cost perspective there.

There are other things.

Going the other direction.

Great. Thank you so much.

Thanks, Andrew.

Thank you.

One moment for questions.

Our next question comes from David Palmer with Evercore you May proceed.

Steve.

Thank you just a question on some of the data that you're showing us here on premier protein ready ready to drink shakes.

On slide nine you talk about the shipments being in line with consumption or roughly in line with consumption in the last couple of quarters, but the all channel consumption.

Outpaced your shift dollars by eight points and six points, respectively. The last two quarters.

I'm wondering maybe give us a sense of what's going on there.

You expect that negative price mix GAAP to all channel consumption to continue in the next couple of quarters.

So, yes, theres a couple of things going on there so for one.

As you go into fiscal 'twenty, four, particularly in Q1 and even into Q2.

We did see and I mentioned this in my prepared remarks that we're seeing a lag.

Retailers, taking price on shelf. So we took a price increase on our shakes on October 22, So as we get to Q1, we've now fully lapped.

Pricing from a shipments perspective about four.

For the for consumption growth, that's still benefiting from from a high single digit growth in kind of into the first quarter and we expect that to continue a bit into the second quarter as some retailers as didn't fully reflect price until later.

In the fourth quarter in particular.

We are lapping a trade inventory build in Q4 last year and so that is part of that is really the main reason between.

The difference between consumption outpacing shipment growth in Q4, but as we go into the end of Q1 and Q2, it's more about.

The pricing element there.

And then just on the capacity increase.

Michaels is bringing on.

December heading into calendar 'twenty four is that about 10% and due on is all signs there that.

Consumption should go up with that capacity that basically.

Retailers are buying everything they can get from you guys and thank you.

Yeah ultimately.

From Michael's yet it will be about 10%, but that's going to take some time to scale up so I mentioned that.

December we should start up.

But it won't be until the back half.

And that really it will be.

More of a contributor to our sales, but youre at but Youre absolutely right yes.

We need that that volume too.

To be able to feel comfortable to build our inventory and start marketing we should be good as I mentioned, we'll be starting promotion in Q2.

And then <unk>.

Looking at for from a Premier Tetra standpoint, looking at starting marketing tour in in Q4.

Great. Thank you.

Thank you.

One moment for questions.

Our next question comes from Ken Goldman with Jpmorgan you May proceed.

Hi, Thank you very much.

I just wanted to build on Andrew's question, if I could and Darcy you were quite clear that nothing has changed in your outlook or your confidence in the business, but the EBITDA dollar.

Spreads sorted from high to low in guidance.

Is higher than what you've typically done in the past and I didn't know if there was any specific reason for that and I guess kind of more importantly, maybe if we could get a little bit of a sense from you about.

What the key drivers would be that would lead that number to come in towards the upside or toward the downside obviously.

No one has a crystal ball, but just as you kind of think of what Youre. Most excited about and what you are most concerned about but what some of the risks might be that you think are more important to call out I'm just curious what those might be for this year.

Sure, Yes, so why don't I start just with net.

Net sales at a biggest factor that.

Wood.

Forced us to go to the higher the low side is really production. So it's the timing of our production scale up.

And as you might expect.

Other factors are response to promotion and competition.

Also the overall economy, but the biggest one from a net sales perspective is the timing of the production scale up.

When you think of EBITDA.

Obviously net sales is the fact is the major factor and that will just flow through and then protein mix and freight rates could also push us up or down and Paul I don't know if you wanted to talk a little bit about some.

Some of the fluctuations within <unk>.

Protein.

But again the.

I wouldn't I really wouldn't read too much into the.

Slightly expanded EBITDA range.

Yes.

14 perspective, we have good line of sight really through the first half of the year into the third quarter.

So I think it's still.

Still kind of a wait and see how the protein costs theres been some fluctuations on the milk protein side and then on whey protein, which is our primary input for our powder business, we have seen some tightness in that market recently.

Which likely will start to affect our second half. The question. There is if that's a temporary blip or if it stays at an elevated rate, but we have seen some some fluctuations there.

Darcy pointed.

The wider range is just more of a reflection really of our growth versus.

Really anything fundamentally changing from how we're thinking about fiscal 'twenty four.

I'll pass it on thank you.

Thank you.

One moment for questions.

Our next question comes from Pamela Kaufman with Morgan Stanley You May proceed.

Hi, good morning.

Good morning.

I have a follow up question on your production capacity I think you previously indicated that it would be up around 20% year on year fiscal 'twenty four.

Alright still fair and then in addition to Michael capacity is there additional production that you are bringing online and then what is the visibility into production expansion beyond this year.

Yes, we feel good about the 20% plus.

And.

The growth slightly skewed to the second half and that's just a factor of the startup.

From Michael.

Michael Foods, if you breakdown the production growth for.

<unk> 24 about 40% of it is coming from new co Mans in 'twenty four so new ads that were adding in 24 about 40% of the growth is coming from lapping the 'twenty three ads and then about 20% is coming from just additional <unk>.

<unk> from our existing so that gives you kind of a flavor for.

The growth that we're bringing on this year.

I think you asked Pam.

What other facilities our partners are coming on this year. So in addition to.

Michael Foods, we have two existing partners that are adding capacity and so some of our existing partners, adding align basically.

And then your last question about looking forward on at.

Adding capacity.

For about 40% of the growth is coming from lapping the 'twenty three ads and then about 20% is coming from just additional volume from our existing so that gives you kind of a flavor for the.

We have in our visibility so currently.

Because of how much capacity, we added this year last year and this year, we will get the benefit of kind of a full year and as they get up to kind of their run rate. The expected run rate. So we actually we do long range planning.

The growth that we're bringing on this year.

I think you asked Pam.

Yeah.

What other facilities our partners are coming on this year. So in addition to Michael.

Every twice a year or if anything fundamentally changes so our long range planning or five years out now.

Michael Foods, we have two existing partners that are adding capacity.

And currently we're looking that we think that we will need.

Additional capacity in two.

So some of our existing partners, adding a line basically.

<unk>.

Bringing on late 'twenty, five 'twenty six and into 2007, so thats our current and so we are already talking to all of our partners.

And then your last question about looking forward on.

Adding capacity.

We have and our visibility so currently.

And figuring out who we're going to partner with to expand the capacity.

Great. Thank you.

And then also thanks for sharing your thoughts on how Youre thinking about the impact from <unk>, one drugs on the business and its consistent with our research.

The benefits to higher protein and weight management foods.

But can you elaborate on your initiative to target these consumers.

Every twice a year or if anything fundamentally changes so our long range planning or five years out now.

How do you plan to identify them.

I mean as you know Pam it's still early so I think in general we're very encouraged by the results of the drugs just for for society, but also for for our category and our business, but we are in learning mode.

And currently we're looking that we think that we will need.

Additional capacity in.

<unk>.

Bringing on late 'twenty, five 'twenty six and into 2007, so thats our current and so we are already talking to all of our partners.

So we did kind of our initial.

Research mining the data, we're now adding some additional research.

And figuring out who we're going to partner with to expand the capacity.

Great. Thank you.

We had already.

Started we did a pretty thorough study.

And then also thanks for sharing your thoughts on how Youre thinking about the impact from <unk>, one drugs on the business and its consistent with our research on the benefits to higher protein and weight management foods.

Around consumers and how they approach.

Kind of weight wellness.

And now we're adding to that so we're going to we need to better understand what these consumers' needs and their journey, how they get information and then we're going to test media to determine the best way to reach these consumers so whether it's <unk>.

Can you elaborate on your initiative to target these consumers.

How do you plan to identify them.

Outreach to support communities to partner with et cetera. So I don't want to go into too much detail, but suffice to say, we are definitely digging in and better understanding and it'll be this year doing a lot of testing and learning and further understanding.

So we did kind of our initial.

Research mining the data, we're now adding some additional research.

Kind of their health journey.

Thanks, I'll pass it on.

We had already.

Started we did a pretty thorough study.

Okay.

Thank you.

One moment for questions.

Around consumers and how they approach.

Our next question comes from Matt Smith with Stifel. You May proceed.

Kind of weight wellness.

Hi, good morning.

Wanted to ask about promotional events timing through the year can you can you talk about the timing of your planned activity you called out investments in <unk> and <unk> and I guess, when we think about the large promotional events to the extent that there will be timing differences between consumption and shipments beyond <unk> that would be helpful.

Sure Matt Yeah, So Q2 will be remember.

Q1 is kind of a seasonally low period, so no promotions.

Kind of their health journey.

Very few promotions and marketing Q2 is where in the category. Most new users are entering into the category. So that's when we will have promotions on both premier and Diamond ties and we will also be launching for diamond ties a new media campaign.

Thanks, I'll pass it on.

Okay.

Thank you.

One moment for questions.

Our next question comes from Matt Smith with Stifel. You May proceed.

Hi, good morning.

In Q2, along with some media on Premier powder.

When you go to Q3 extension of the media campaign on Diamond ties and then in Q4.

We will have.

Promotions on the Premier protein full brand and our plan right now is to launch.

Sure Matt Yeah, So Q2 will be remember.

Q1 is kind of a seasonally low period, so no promotions.

National marketing campaign in Q4 again borrowing capacity. So that is kind of when you look at the marketing and promotional calendar for 24 as it sits today.

Very few promotions and marketing Q2 is where in the category most new users or entering into the category. So that's when we will have promotions on both premier and Diamond ties and we will also be launching for diamond ties a new media campaign.

In regards to where there will be kind of low promotional loads.

I think one encouraging piece is that.

We will I think.

In Q2, along with some media on Premier powder.

In Q2 are our major one of our major club promotions is a little bit later in the quarter in Q2, so there won't be there shouldn't be a massive difference between.

When you go to Q3 extension of the media campaign on Diamond ties and then in Q4.

We will have.

Promotions on the Premier protein full brand and our plan right now is to launch <unk>.

Where you have a load in in one quarter and consumption in the next it will mostly be in the same quarter.

National marketing campaign in Q4 again barring capacity. So that is kind of when you look at the marketing and promotional calendar for 24 as it sits today.

Versus.

Back in kind of 'twenty, one when we are doing big promotions.

Don't know Paul is there anything else.

Where we're going to see a big.

In regards to where there will be kind of low promotional loads.

Change between shipments and consumption.

No. If you look at consumption and shipment volumes were expecting those to be largely track throughout the year. We're not at two <unk> at this point, we're not expecting any major loads the loads.

I think one encouraging piece is that.

We will I think.

In Q2 are our major.

We are lapping in our first quarter and treat inventory deload.

One of our major club promotions is a little bit later in the quarter in Q2, so there won't be there shouldnt be a massive difference between.

Which is.

Or.

Actually a loan I should say, so it's actually a headwind in the first quarter.

So I want to point that out but then also we also had a de load in the second quarter last year, which also benefits, our which should be a tailwind to our second quarter. So those are the only two pieces of it from a true consumption volume versus shipment volume, we expect them to largely track in fiscal 'twenty for by quarter.

Where you have a load in in one quarter and consumption in the next it will mostly be in the same quarter.

Versus.

Back in kind of 'twenty, one when we are doing big promotions.

Thank you and as a follow up if we take a step back when we think about the level of promotional activity behind premier protein shakes in the rest of the business in fiscal 'twenty four or is it still just a step towards getting back to a full investment level or would you consider this year. Once you get through the first quarter kind of representative of the level of promotional activity.

I don't know Paul is there anything else.

Where we're going to see a big.

Change between shipments and consumption.

Look at consumption and shipment volumes were expecting those to be largely track throughout the year. We're not at this point, we're not expecting any major load deload.

You think you need behind the two brands.

We're lapping our first quarter in trade inventory deload.

It will largely be on track I would say.

Which is.

Yes.

We're actually a load I should say so it's actually.

We have no there isn't.

In the first quarter.

I think.

So I want to point that out but then also we also have.

We've communicated this before but back in 'twenty, one I think we're a bit heavy on promotion and so I mean, I think we were doing.

De load in the second quarter last year, which also benefits our what should be a tailwind to our second quarter. So those are the only two pieces of it from a true consumption volume versus shipment volume, we expect them to largely track in fiscal 'twenty for by quarter.

Up to kind of three major promotions a year.

Thank you.

I think what we've learned over the last couple years is that we were probably subsidizing a fair amount of volume and so as we move forward in 'twenty four and beyond I think we.

A follow up if we take a step back can we think about the level of promotional activity behind premier protein shakes in the rest of the business in fiscal 'twenty. Four is it still just a step towards getting back to a full investment level or would you consider this year. Once you get through the first quarter kind of representative of the level of promotional activity.

We are getting back to the level that we think is appropriate for our business without yes.

You think you need behind the two brands.

Yes, subsidizing a lot of volume so I would say 24 is representative.

It will largely be on track I would say.

Thank you Darcy I'll pass it on.

There isn't.

Thank you.

<unk>.

One moment for questions.

We've communicated this before but back in 'twenty. One I think we are a bit heavy on promotion and so I mean, I think we were doing.

Our next question comes from Jim <unk> with Stephens you May proceed.

Hi, guys. Thanks for taking our question.

Josh I wanted to ask you had touched on the benefit from having some temporarily discontinued flavors come back online can you just offer some color around.

Up to kind of three major promotions a year I think what we've learned over the last couple of years is that we were probably subsidizing a fair amount of volume.

Does that represent an opportunity to bring incremental households back to the brands that maybe are more focused on a specific flavor.

So as we move forward in 'twenty four and beyond I think we are getting back to the level that we think is appropriate for our business without.

So if their flavors on available that will build shop premier or is it more represent just increased by rate where consumers likely to buy both the plain vanilla flavor and then their preferred flavor.

Yes, subsidizing a lot of volume so I would say 24 is representative.

Thank you Darcy.

Thanks.

Yes, Jim it's really both so you saw a bump up in household penetration in the supplemental.

Thank you.

One moment for questions.

Presentation that we have on our website you saw bump up about a point and household penetration it's a combination of.

Our next question comes from Jim Suva with Stephens you May proceed.

Hi, guys. Thanks for taking my question.

We did start light promotion.

Firstly I wanted to ask you had touched on.

In the quarter and so that was part of it but it's also partially bringing back those paused flavors. So and those are people that they really like cinnamon roll for instance, and so they were waiting for it so absolutely. It's a it's a combination and.

We benefit from having some temporarily discontinued flavors come back online can you just offer some color around.

Does that represent an opportunity to bring incremental households back to the brands that maybe are more focused on a specific flavor.

So if their flavors not available little little shop Premier or is it more represented just increased by rate where consumers likely to buy both side of the plain vanilla flavor and then their preferred flavor.

In addition, so both by rate as well as household Tan.

And this might be too early for you guys to have an answer on this yet given that the national marketing campaign is towards the end of the year, but do you have a sense of kind of what the messaging is going to be there is it really to kind of communicate use occasions to consumers. So it's more like to grow the category or is it something.

Yes, Jim it's really both and so you saw a bump up in household penetration in the supplemental.

Presentation that we have on our website you saw bump up about a point and household penetration it's a combination of.

Pacific for Premier.

We did start light promotion.

And so I'll talk about so both so we plan to have.

New campaign on both of our brands and since dermatitis starts in Q2 I have a I have more information on that than I do on the premier side of things. We're still working on obviously, we have our our strategy. So first on diamond ties.

Very excited about the campaign, it's a stronger creative that really is going to differentiate diamond prices versus the rest of the competitive set around its premium positioning and science backed.

In addition, so both by rate as well as household.

Aspect, which is really why consumers pick diamond ties, it's because it is kind of it's a.

Super premium.

High quality kind of the highest quality science backed brand and so we're really hitting on that in our new campaign.

For Premier.

And so I'll talk about so both so we plan to have.

On Premier.

New campaign on both of our brands since Dematteis starts in Q2 I have a I have more information on that than I do on the premier side of things. We're still working on obviously, we have our our strategy. So first on diamond ties very excited about the campaign.

Our strategy from a marketing standpoint has has always been to us or our consumers to communicate.

Why they love the brand so much so it's super authentic it's been very effective for the brand. So it's a combination of that as well as communicating with the amazing taste. So I don't expect us to.

Stronger creative that really is going to differentiate diamond prices versus the rest of the competitive set around its premium positioning and science backed.

To change from that overall strategy, but the teams are working hard to figure out what what the right angle is too for the Q4 campaign.

Aspect, which is really why consumers pick diamond ties, it's because it is kind of it's a super premium.

High quality kind of the highest quality science backed brand and so we're really hitting on that in our new campaign.

Great I'll hop back in the queue. Thank you.

Thanks.

Thank you.

One moment for questions.

On Premier.

Our next question comes from Matt Mcginley with Needham You May proceed.

Our strategy from a marketing standpoint has has always been to us or our consumers to communicate.

Thank you.

For the higher marketing spend this year I think you were targeting something like three or 4%. This year versus the two 5% of sales you spent last year is that 3% to 4% and marketing still the right range or do you have a tighter than that now and is a critical decision point you made a couple of comments around how you would spend it is a critical decision point more around the production.

They love the brand so much so it's super authentic it's been very effective for the brand. So it's a combination of that as well as communicating the amazing taste. So I don't expect us to.

Or is it more around the effectiveness of the <unk> advertising campaign that you would then kind of ramp the spend.

To change from that overall strategy, but the teams are working hard to figure out what what the right angle is too for the Q4 campaign.

Into the fourth quarter, if you really got that good results from what happens in the earlier in the year.

Yes, so I'll take the first question and second part of the question.

Great I'll hop back in the queue. Thank you.

Yes, we are modeling.

Thanks.

<unk>.

Our marketing spend to be in kind of the three to three 5% range. We don't think we will get to 4% that is more likely as we go forward with with our full production capacity going but we'll be in that 335% range is our expectation for 'twenty four.

One moment for questions.

Our next question comes from Matt Mcginley with Needham You May proceed.

Thank you for.

The higher marketing spend this year I think you were targeting something like three years to 4% this year versus the two 5% of sales you spent last year is that 3% to 4% and marketing still.

Yes.

Your second part of the question I just wanted to be clear so.

The rate range or do you have a tighter than that now.

We are supporting fully supporting and marketing the parts of the business, where we have capacity. So think of we are fully supporting diamond ties premier protein powder.

As a critical decision point you made a couple of comments around how you would spend it is a critical decision point more around the production or is it more around the effectiveness of the <unk> advertising campaign that you would then kind of ramp the spend.

Our premier bottles.

Into the fourth quarter, if you really got that good results from what happens in the earlier in the year.

But we are waiting on until.

From a marketing perspective until Q4 is really the tetra side of the business on premier protein and that is purely a reflection of capacity, we just need to make sure that we have that capacity.

Yes, so I'll take the first question your second part of the question.

Yes, we are modeling.

Our marketing spend to be in kind of the three to three 5% range. We don't think we'll get to 4% that is more likely as we go forward with with our full production capacity going but will be about three 5% range is our expectation for 'twenty.

And we have the right level of.

Inventory that we can add.

Yes.

We can support it from a marketing perspective and see the lift.

Your second part of the question I just wanted to be clear so.

Got it that makes sense.

With the with the debt repayments that you made on your revolver last year and into this one you have a zero balance and I don't believe you can call. Your senior notes until a couple of years out.

We are supporting fully supporting and marketing the parts of the business, where we have capacity. So think of we are fully supporting diamond ties premier protein powder.

In the prepared remarks, it sounds like working capital would be more of an investment this year.

It's still probably be building cash over the course of this year do you expect share repurchases to become more of a priority. This year or does it makes sense to sit on larger cash balances this year at that I.

Our premier bottles.

But we are waiting on until.

From a marketing perspective until Q4 is really the tetra side of their business on premier protein and that is purely a reflection of capacity, we just need to make sure that we have the the capacity.

I guess.

Have some dry powder, if you see opportunities that present themselves.

Yes, 24, we expect to continue to look at share repurchases as the primary use of our capital I would say that in 'twenty. Three we actually we bought back 100 points I'm going to share. So I wouldn't say it was light in 2003 as well, but as we go into 'twenty four to your point, we could build cash but.

And we have the right level of.

<unk> inventory that we can add.

We can support it from a marketing perspective and see the lift.

Share repurchases and being opportunistic there is the more likely use of our capital.

Got it that makes sense.

With the with the debt repayments that you made on your revolver last year and into this one you have a zero balance and I don't believe you can call. Your senior notes until a couple of years out.

Okay. Thank you.

Yes.

Thank you.

One moment for questions.

Our next question comes from Bryan Spillane with Bank of America, You May proceed.

In the prepared remarks, it sounded like working capital would be more of an investment this year.

Great. Thanks, operator, good morning, everyone.

It's still probably be building cash over the course of this year do you expect share repurchases to become more of a priority this year or does it makes sense to sit on larger cash balances this year I.

Good morning.

Just to kind of follow ups, one I think not.

Asked earlier about.

Promotion of our promotion level this year kind of normalize what about can you comment also on just marketing spend Darcy.

I guess.

Have some dry powder, if you see opportunities that present themselves.

Yes, 24, we expect to continue to look at share repurchases as the primary use of our capital.

Yes, I was thinking back you've had capacity has been a limitation.

For a while on and off and so.

I'd say that in 2003, we actually we bought back 100 point I am going to share. So I wouldn't say it was light in 'twenty three as well, but as we go into 'twenty four to your point, we could build cashman.

I think my impression that maybe were strained marketing spend a bit.

So now that you have more capacity and we're looking at this year is this a normal year or would you expect that you have more capacity again assuming demand.

Share repurchases and being opportunistic there is the more likely use of our capital.

Continues to increase that marketing, whether it's in absolute dollars or percentage of sales.

Okay. Thank you.

Yes.

Thank you.

How would that evolve with having more production.

One moment for questions.

Yeah from a marketing perspective, it is not a normal year.

Our next question comes from Bryan Spillane with Bank of America, You May proceed.

So we would because we're really starting.

Great. Thanks, operator, good morning, everyone.

Good morning.

Like I said, we are supporting the size of the business that we have capacity so normal year for diamond ties premier protein powder bottles, but on the tetra side of the business, which is really the bulk of the premier protein business and we are.

Just to kind of follow ups, one I think Matt.

Asked earlier about.

Promotion of our promotion level this year kind of normalize what about can you comment also on just marketing and Darcy.

Yes, I was thinking back you've had capacity has been a limitation.

We're only marketing we are planning to only market in Q4, so getting into 'twenty five.

For a while on and off and so.

I think my impression that maybe were strained marketing spend a bit.

We would absolutely be spending and probably our biggest spend would be Q2. The reason why we're not doing Q2. This year is is capacity and we don't and the last thing we want to do and we were pushing promotion first and then marketing in the back half so I think <unk>.

So now that you have more capacity and we're looking at this year is this a normal year or would you expect that you have more capacity again assuming demand.

Continues to increase that marketing, whether it's in absolute dollars or percentage of sales.

How would that evolve with having more production.

Yeah from a marketing perspective, it is not a normal year.

Five will be more of a normal marketing year.

So we would because we're really starting.

For the entire business, because we will have all of our greenfields up to.

Fully scaled up.

And we will be able to really drive that business. Okay.

Okay and then my second my follow other follow up is just to <unk> question around DLP ones and I guess I was hearing it and listening to the prepared remarks.

We're only marketing we are planning to only market in Q4, so getting into 'twenty five.

One question.

In terms of research it sounds like what Youre doing with a lot of consumer research, but will you do any like product formulation research or anything that might be able to connect the efficacy of premier too.

Patient <unk> and tied to that kind of like what we see in infant formula is there.

The potential to market to doctors and nutritionists right to sort of promote.

Five will be more of a normal marketing year.

Efficacy of the product and helping people on that weight loss journey.

For the entire business, because we will have all of our greenfields up to them.

Yeah.

So first the exciting news is that we don't have to do much I mean, our products are very well formulated positioned and already resonating with GOP users. I mean, you can go on social media and you see our brand pop up.

Fully scaled up.

And we will be able to really drive the business okay.

Okay and then my second my follow other follow up is just to <unk> question around DLP ones and I guess I was hearing it and listening to the prepared remarks.

Kind of all on Reddit.

One question.

And and Facebook feeds et cetera.

In terms of research it sounds like what Youre doing with a lot of consumer research, but.

However.

I think that and I would I would also say that.

Do any like product formulation research or anything that might be able to connect to the efficacy of premier too.

We have experience marketing to certain groups.

Patient <unk> and tied to that kind of like what we see in infant formula is there.

We're certain specific kind of medical needs and we do it in a way that doesn't change our <unk>.

The potential to market to doctors and nutritionists right to sort of promote the efficacy of the product and helping people on that weight loss journey.

Brand overall brand positioning, but we do it in a very kind of specific.

Yeah.

At surgical way, which I think is how we would do that.

So we have some experience there we just want to figure out the right the right place to communicate your last question around.

Kind of all on Reddit.

And and Facebook feeds et cetera.

Would we go after doctors et cetera, we have some experience there.

However.

I think that and I would I would also say that we.

And.

And the answer is possibly I think our experience would say that doctors really have no interest in <unk>.

We have experience marketing to certain groups.

Communicating what products people use but some of the support groups or nurses or dietitians due and so we will see again. This is a different it's a different.

We're certain specific kind of medical needs and we do it in a way that doesn't change our.

Brand overall brand positioning, but we do it in a very kind of.

The product is it's a different kind of health journey. So we want to really understand it. So we can do it the right way.

Pacific.

At surgical way, which I think is how we would do this.

And then from a the last question around product formulation.

And so we have some experience there we just wanted to figure out the right the right place to communicate your last question around.

Absolutely it's part of what were evaluating remember this is early.

We want to better understand the nutrition that theyre missing we know that debt.

Would we go after doctors et cetera, we have some experience there.

When you were on these drugs that you do lose more muscle mass. So we know protein is important.

And and the answer is possibly I think our experience would say that doctors really have no interest in.

Kind of check that box.

There are other areas. If there is some micro nutrients that are potentially lost those are things that we need to learn and we plan to alright.

Communicating what products people use but some of the support groups or nurses or dietitians due and so we will see again. This is a different it's a different.

Alright, Thanks, Dorothy happy Thanksgiving everyone.

Thank you you too.

Thank you.

<unk> product, it's a different kind of health journey. So we want to really understand it. So we can do it the right way.

One moment for questions.

Our next question comes from John Baumgartner with Mizuho Securities You May proceed.

And then from a the last question around product formulation.

Good morning, Thanks for the question.

Good morning, John.

Darcy first of all I wanted to ask about about innovation as the supply chain issues are being solved in advertising and promo is being turned back on at what point do you think the model is ready.

Absolutely that's part of what were evaluating remember this is early.

We want to better understand the nutrition that they're missing we know that.

When you were on these drugs that you do lose more muscle mass. So we know protein is important.

Capable of supporting innovation, that's larger more platform based in nature, you mentioned your long long range planning. So how do we think about portfolio development from here, whether it's flavors format differentiated products that we may even see it in fiscal 'twenty four.

Kind of check that box.

There are other areas if theres some micro nutrients that are potentially lost those are things that we need to learn and we plan to alright.

We dug into that.

Alright, Thanks, Darcy happy Thanksgiving everyone.

I think that we have some new learnings in this area John So we dug into our data over the last several months with an outside partner and I think that we have some exciting new learnings I think the biggest piece is.

Thank you you too.

Thank you.

One moment for questions.

Our next question comes from John Baumgartner with Mizuho Securities You May proceed.

Good morning, Thanks for the question.

Good morning, John.

We have found we have much more upside with our existing products and what I'll just call close in and innovation So think flavors.

Darcy first of all if I wanted to ask about about innovation.

Supply chain issues are being solved in advertising and promo is being turned back on at what point do you think the model is ready.

Capable of supporting innovation that larger more platform based in nature, you mentioned your long long range planning. So how do we think about portfolio development from here, whether it's flavors formats differentiated products that we may even see it in fiscal 'twenty four.

Pack sizes formats, and so sort of closer in innovation as well as just more distribution of our existing products.

What I like about that is it is less risky it's more efficient.

We dug into that.

However, we also have been spending the last two years, our R&D team.

<unk> has been.

Working on new lines of products.

And especially on our premier protein business. So we have a very full pipeline of new products, but my expectation is that we're going to focus on in 'twenty four more on the closer in innovation, and then 25 and beyond we will be.

We have found we have much more upside with our existing products and what I'll just call close in an innovation so think flavors.

Pack sizes formats, and so sort of closer in innovation as well as just more distribution of our existing products.

We'll be launching some of those lines that we have developed.

And our goal is to launch a new line every 12 to 18 months on both Premier and <unk> and focus on 25 and beyond.

What I like about that is it is less risky it's more efficient.

Okay, and then as a follow up on marketing you've also mentioned the TV campaigns, obviously in the high ROI, you're seeing from Influencers and social media.

However, we also have been spending the last two years, our arent RNA team.

I've been.

Working on new lines of products.

Curious do other opportunities exist, whether it's partnerships or brand sponsorships that can maybe amplify and complement that.

Influenza breath and accelerate brand awareness.

Okay.

Or is there still out there maybe that could be high impact would have been pulled yet given where the supply chain is good.

I mean honestly a lot of levers.

We just havent I mean, so again I want to separate <unk> and Premier and Premier we have been holding back we have not had any significant marketing for two years. So other than kind of the basic social media that what we call kind of every day to keep the lights on marketing, but we haven't had a big campaign.

We'll be launching some of those lines that we have developed.

And our goal is to launch a new line every 12 to 18 months on both Premier and Diamond ties and focus on 25 and beyond.

Okay, and then as a follow up on marketing.

In 'twenty one.

You've also mentioned the TV campaigns, obviously in the high ROI, you're seeing from Influencers and social media.

So absolutely a big opportunity on diamond ties and we use we have in fluids or as we call them our Shaker program.

Curious do other opportunities exist, whether it's partnerships or brand sponsorships that can maybe amplify and complement.

And they're basically every day that we have a bunch of criteria. They are still there everyday influencers.

Influencer breath and accelerate brand awareness.

But they actually have a lot of reach so we have had a lot of success with the Shaker program within Premier now is there an opportunity to have a more high profile influencer, possibly on diamond highs, we actually have done that so we've brought in a combination of.

Okay.

Or is there still out there maybe that could be high impact would have been pulled yet given where the supply chain is good.

I mean honestly a lot of levers.

We just havent I mean, so again I want to separate diamond ties on Premier Premier we've been holding back we have not had any significant marketing for two years. So other than kind of the basic social media that what we call kind of every day keep the lights on marketing, but we haven't had a big campaign.

<unk>.

Just regular influencers, which have pretty high reach but then we've also every year brought on some kind of higher profile Influencers and we'll continue to do that within the <unk> business and even starting in 'twenty four I'm not ready to tell you, who the who are high profile influencers.

'twenty one.

So absolutely a big opportunity on <unk>, and we use we have in fluids or as we call them our Shaker program.

But we are absolutely using that lever.

And they're basically every day, we have a bunch of criteria. They are still there everyday influencers.

Okay got it.

Thanks, guys.

Awesome. Thanks.

Thank you and as a reminder to ask a question. Please press star one on your telephone one moment for questions.

But they actually have a lot of reach so we have had a lot of success with the the Shaker program within Premier now is there an opportunity to have a more high profile influencer, possibly on diamond highs, we actually have done that so we've brought in a combination of.

Yes.

Our next question comes from Bill <unk> with <unk> Securities You May proceed.

Yes, Thanks for squeezing me in.

Good morning.

I guess first maybe just a little bit talk with some of the additional capacity talking about kind of different distribution those international opportunities, but also kind of single serve at C stores or something like that and kind of how thats progressing or if that will progress as we look at the next in the new year.

Yes, so first of all international because I think both of those opportunities as more longer range. We have settlements I mean, I just said when I was at.

There's are but we are absolutely using that lever.

Alright, thanks, guys.

Awesome. Thanks.

Thank you.

Minder to ask a question. Please press star one on your telephone one moment for questions.

Talking to John is that.

From an innovation standpoint, this new learning around we have so much opportunity.

Yes.

Our next question comes from Bill <unk> with <unk> Securities You May proceed.

In the U S.

With our existing products with kind of close in innovation.

Yes, Thanks for squeezing me in and good morning.

International is absolutely an opportunity, but it is it takes a little longer to build and it is kind of.

Good morning.

I guess first maybe just a little bit with it.

Some of the additional capacity talking about kind of different distribution those international opportunities, but also.

Yes, it's a slower build right now international is about low teens.

It will serve at C stores, or something like that and kind of how thats progressing or if that will progress as we look at the next in the new year.

10% to 12% of our business.

Yeah, So first of all international.

And it's growing.

It's growing strongly about the same rate as we're seeing in the U S. But it's on a lower base. So we're going to continue we have a dedicated team.

Both of those opportunities as <unk>.

More longer range, we have settlement.

Said when I.

Thats focus we have a nice sized business in Canada, we are growing in Mexico, we are growing through our global customers.

Talking to John is that.

From an innovation standpoint, this new learning around we have so much opportunity.

In the U S.

Across the globe.

With our existing products with kind of close in innovation.

We have a business in the EU and an office there. So I would say we are definitely investing and we see it as a future opportunity.

International is absolutely an opportunity, but it is it takes a little longer to build and it is kind of.

It's just a slower build especially when we have so much opportunity within the U S.

On the single serve question.

Yes, it's a slower build right now international is about low teens.

The same thing again, we see that as an opportunity it's a little more complicated because it requires a different route to market.

10% to 12% of our business.

So once again, we have this capacity we are actually expanding our bottle co man wishes.

And it's growing very it's growing strongly about the same rate as we're seeing in the U S. But it's on a lower base. So we're going to continue we have a dedicated team. That's focused we have a nice sized business in Canada. We are growing in Mexico, we are growing through our global customers.

Which is exciting which is also the format that we sell within the within E Commerce, and we think that there is.

Future opportunity.

<unk> kind of bottles across across channels.

Across the globe.

Got it thanks, so much.

We have a business in the EU.

Just a housekeeping can you give us a lot of interest.

And an office there so I would say we are definitely investing and we see it as a future opportunity.

And tax rate for fiscal 'twenty four thanks, so much.

Just a slower build especially when we have so much opportunity within the U S.

Yes, our tax rate will be around 25% to 26% a little higher this year because of the accelerated amortization on powerbar.

On the single serve question.

The same thing again, we see that as an opportunity it's a little more complicated because it requires a different route to market.

What was your second question that was answered cash interest interest.

Interest expense cash interest expense cash interest ought to be around $60 million.

So once again, we have this capacity we are actually expanding our bottle co man.

Great. Thanks Happy Thanksgiving. Thanks same to you thank you to them.

Which is exciting which is also the format that we sell within the within E Commerce, and we think that there is.

Thank you one moment for questions.

Okay.

Future opportunity.

Our next question comes from Jon Andersen with William Blair You May proceed.

Kind of bottles across across channels.

Hey, good morning, everybody. Thanks, just one quick question on Premier protein.

Got it thanks, so much.

Just a housekeeping can you give us a lot.

Interest expense and tax rate for fiscal 'twenty four thanks, so much.

From the slides.

It looks like consumption growth for the brand has been.

Yes, our tax rate.

Be around 25% to 26% a little higher this year because of the accelerated amortization on powerbar.

Running stronger in tracked channels.

Relative to untracked channels, both on a 52 week.

And a 13 week basis.

What was your second question was answered cash interest expense.

So I'm assuming that you are a function of where the new distribution or tdp's. The restoration of GDP is hitting the market.

Thanks Catherine.

Interest ought to be around $60 million.

Great. Thanks Happy Thanksgiving. Thanks, Sandeep. Thank you you too though.

But could you remind us of kind of for premier protein.

Thank you one moment for questions.

How much of the.

Consumption for that brand has tracked versus untracked and as you look to.

Okay.

Our next question comes from Jon Andersen with William Blair You May proceed.

<unk> 2024.

And restarting promotions et cetera.

Hey, good morning, everybody. Thanks, just one quick question on Premier protein.

How do you expect that that channel mix may evolve in <unk>.

From the slides.

'twenty 'twenty four from here. Thanks.

It looks like consumption growth for the brand has been.

And so Jennifer might have to help me I think it's about 60% of our business on Premier is in track Jennifer is that about right.

Running stronger in tracked channels relative to untracked channels, both on a 52 week.

I believe so.

Okay.

13 week basis.

And so about 60% of the Premier business is tracked and Youre, absolutely right Jon that.

So I'm, assuming that's a function of where the new.

Tep's the restoration of GDP.

The reason why it's outpacing.

The market.

On track is mainly that's where.

Could you remind us of what's kind of for premier protein how.

We're gaining a lot of distribution, it's a lot of food accounts mass accounts, where we're increasing distribution.

How much of the.

Consumption for that brand has tracked versus untracked and as you look to.

Quite a lot.

<unk> 2024.

And then.

Restarting promotions et cetera.

Sorry, your second question around.

How do you expect that that channel mix may evolve.

Was it really.

More around the focus of marketing in 2024 and will it have.

'twenty 'twenty four from here. Thanks.

Kind of a channel orientation to it that might affect that mix in 2004.

And so Jennifer might have to help me I think it's about 60% of our business on Premier is in tracked Jennifer is that about right.

Yeah, no. So all of our all of our marketing is really supporting the overall brand, which should raise all all channels kind of equally we do some some channel specific marketing, but the bulk of it will be overall I think the biggest I do expect.

I believe so.

Okay.

And so about 60% of the Premier business is tracked at Youre, absolutely right Jon that.

The reason why it's outpacing.

On track is mainly that's where.

Backed debt.

We're gaining a lot of distribution, it's a lot of food accounts mass accounts, where we're increasing distribution.

I mean, it depends it will be I would say the difference between tracked and untracked moving forward.

Quite a lot.

Well, we expect to continue to see increases in distribution.

And then.

Sorry.

Question around.

Was it really.

More than tracked.

More around the focus of marketing in 2024 and will it have.

But also.

Untracked will see promotion can really push.

Kind of a channel orientation to it that might affect that mix in 2004.

Untracked quite high when we have these big promotions within the quarter. So that's something that will.

That we will see kind of like in Q2 and Q4.

Okay makes sense. Thank you very much.

Thank you.

Thank you we've reached the end of our Q&A session. This concludes today's conference call. Thank you for your participation you may now disconnect.

I do expect that.

<unk>.

I mean, it depends it will be I would say the difference between tracked and untracked moving forward.

Well, we expect to continue to see increases in distribution.

More than tracked.

But also on <unk>.

Untracked will see promotion can really push.

On tracked quite high when we have these big promotions within the quarter. So that's something that will.

We will see kind of like in Q2 and Q4.

Okay makes sense. Thank you very much.

Thank you.

Thank you we've reached the end of our Q&A session. This concludes today's conference call. Thank you for your participation you may now disconnect.

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