BellRing Brands has lowered its forecast for annual adjusted EBITDA to a range of $275 million to $295 million, down from its previous estimate of $315 million to $335 million, citing inventory-related impacts and a quality issue with a third-party supplied ingredient. The new guidance includes $28 million of unfavorable inventory-related impacts, of which $21.3 million was recorded in the second and third quarters, including an $11.3 million charge for an ingredient that did not meet quality requirements and a $10 million charge for excess shake bottle inventory. The company also expects around $7 million in trade spending in the fourth quarter to support sell-through of excess inventory and optimize levels ahead of fiscal year-end. Despite the lowered earnings outlook, BellRing raised its annual net sales forecast to growth of 1% to 3%, implying $2.335 billion to $2.375 billion, after third-quarter net sales rose 4% to $570.4 million, beating market expectations.
Bellring Brands LLCQuality issue with third-party ingredient and excess inventory led to lowered EBITDA forecast.