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Utz Brands, Inc. (UTZ)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered Organic Net Sales growth of 2.9% to $352.1M, Adjusted EBITDA of $45.1M (+3.9%), and Adjusted EPS of $0.16 (+14.3%), with Branded Salty Snacks up 4.9% and continued share gains despite category softness .
  • Pricing declined 3.4% as bonus packs and focused trade promotions drove +6.3% volume/mix; management expects bonus packs to wind down into summer with “about a point” of price investment going forward .
  • Gross margin contracted 90bps to 33.6%, while Adjusted Gross Margin expanded 100bps to 38.2%, fueled by productivity savings and mix shift; Q1 marked the ninth consecutive quarter of y/y Adjusted EBITDA margin expansion .
  • FY25 guidance reaffirmed: low-single-digit Organic Net Sales growth, Adjusted EBITDA +6–10% with ~100bps margin expansion, and Adjusted EPS +10–15%; management sees only modest tariff impact given domestic inputs and manufacturing .
  • Liquidity stood at $172.2M; Net Leverage ratio was 4.0x; cash used in operations ($20.2M) and heavier capex ($38.8M) reflect seasonality and supply chain investments (Rice DC and new capacity) .

What Went Well and What Went Wrong

What Went Well

  • Power brands-led growth: Branded Salty Snacks rose 4.9% (Organic) and drove volume share gains in both Core and Expansion geographies; Power Four retail sales +1.7% with Company retail volumes +5.7% vs category –1.6% .
  • Productivity lifted margins: Adjusted Gross Margin +100bps to 38.2% and Adjusted EBITDA margin +30bps to 12.8% on strong cost savings and improved mix .
  • Strategic capacity and network actions: Rice Distribution Center came online in Jan’25; new kettle and pretzel lines expanded capacity, underpinning growth and future productivity .

Management quote: “We’ve now shown our ability to grow despite category softness… we delivered our ninth consecutive quarter of year-over-year Adjusted EBITDA Margin expansion” — CEO Howard Friedman .

What Went Wrong

  • GAAP gross margin compression: Gross margin fell 90bps to 33.6% as investments to support capacity expansion offset savings; SD&A rose to 32.1% of sales (adjusted 25.4%) amid higher selling and delivery costs .
  • Pricing headwind from value actions: Net price down 3.4% primarily due to bonus packs (–2.8pp); while supportive of volumes and value-seeking consumers, it weighed on near-term price realization .
  • Non-branded/non-salty softness: Organic Net Sales declined 8.8%, driven by Partner Brands and Dips & Salsas; management expects continued declines in Partner Brands as Utz-branded mix increases .

Financial Results

Core P&L and Margins (prior two quarters → current quarter)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$365.5 $341.0 $352.1
Gross Profit Margin %35.8% 35.0% 33.6%
Adjusted Gross Profit Margin %39.0% 39.4% 38.2%
GAAP Diluted EPS ($USD)$(0.03) $0.03 $0.09
Adjusted EPS ($USD)$0.21 $0.22 $0.16
Adjusted EBITDA ($USD Millions)$54.0 $53.1 $45.1
Adjusted EBITDA Margin %14.8% 15.6% 12.8%

Q1 2025 Actuals vs S&P Global Consensus

MetricActualConsensusBeat/Miss
Revenue ($USD Millions)$352.1 $352.2*In line*
Adjusted EBITDA ($USD Millions)$45.1 $44.8*+$0.3M (beat)*
GAAP Diluted EPS ($USD)$0.09 N/A*N/A*

Values retrieved from S&P Global.*

Segment/Category Mix – Q1 2025

SegmentNet Sales ($USD Millions)Organic Growth YoYVolume/Mix (pp)Pricing (pp)
Branded Salty Snacks (87% of sales)$305.9 +4.9% +8.3 –3.4
Non-Branded & Non-Salty Snacks (13%)$46.2 –8.8% –6.1 –2.7
Total$352.1 +2.9% +6.3 –3.4

KPIs and Balance Sheet – Q1 2025

KPIValue
Branded Salty Retail Sales vs LYFlat vs –1.7% category
Power Four Retail Sales vs LY+1.7%
Company Retail Volumes vs LY+5.7% vs category –1.6%
Liquidity$172.2M (Cash $62.7M + Revolver $109.5M)
Net Debt$800.9M
Net Leverage Ratio4.0x TTM Normalized Adj. EBITDA
Cash flow used in operations$(20.2)M (seasonal)
Capex$38.8M
Dividend declared$0.061 regular + $0.011 additional per share

Guidance Changes

MetricPeriodPrevious Guidance (2/20/25)Current Guidance (5/1/25)Change
Organic Net Sales growthFY 2025Low-single digits Low-single digits Maintained
Adjusted EBITDA growthFY 2025+6% to +10% +6% to +10% Maintained
Adjusted EBITDA margin expansionFY 2025~100bps ~100bps Maintained
Adjusted EPS growthFY 2025+10% to +15% +10% to +15% Maintained
Effective tax rateFY 202517%–19% 17%–19% Maintained
Interest expenseFY 2025~$43M ~$43M Maintained
Capital expendituresFY 2025$90–$100M $90–$100M Maintained
Net leverage ratioFY 2025 YEApproaching ~3x Approaching ~3x Maintained
DividendQ1 2025—$0.061 regular + $0.011 additional declared Announced

Note: In Q2 2025, guidance was later updated: Organic Net Sales raised to ≥2.5%; Adjusted EBITDA tightened to +7–10%; Adjusted EPS lowered to +7–10%; interest ~$46M; capex ~$100M . Included here for context beyond Q1.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Value/promo dynamicsMore competitive promo environment; C-store softness Bonus packs drove +6.3pp vol/mix and –2.8pp price; winding down into summer; ~1pp price investment ahead Normalizing pricing as bonus packs wind down
Supply chain & productivityProductivity programs expanded margins ; exceeded FY margin goals Rice DC operational; new kettle +35% capacity; new pretzel line; margin expansion via savings; $150M+ savings plan 2024–2026 Accelerating investments, sustained savings
Regional trendsShare gains in Core & Expansion Continued volume share gains in both; Expansion retail volume +8.9% Positive momentum in Expansion
Product/brand performancePower brands drove mix ; Branded Salty +2.9% Power Four retail sales +1.7%; Boulder Canyon #1 Natural SKU; new flavors/launches (tortilla chips; cheese balls; lemonade chips) Strength across BFY and innovation
Tariffs/macroValue-seeking environment Expect modest tariff impact given domestic inputs/manufacturing Low expected impact
ChannelsC-store softness Natural/discount/club strong; convenience improving but not growing yet Mixed; watch C-store recovery
Leadership—CFO transition to Bill Kelley; CCO retirement, succession Transition underway

Management Commentary

  • “We delivered nearly 3% Organic Net Sales growth… and gained dollar and pound share of the Salty Snacks category… our ninth consecutive quarter of year-over-year Adjusted EBITDA Margin expansion” — Howard Friedman, CEO .
  • “We expect that recent tariff volatility will have a modest impact on our business in 2025… we remain confident in reaffirming our full-year guidance” — Howard Friedman, CEO .
  • “Volume/mix growth of +6.3%… pricing impact of (3.4%) primarily due to bonus packs and focused trade promotions… Adj. EBITDA Margin expansion of +30bps” — Financial Review .
  • Network investments: Rice DC consolidated six warehouses; new kettle (+35% capacity) and pretzel lines operational in Q1 .
  • “We should be normal course from here on out… about a point of price investment going forward” — Ajay Kataria, CFO .

Q&A Highlights

  • Bonus packs impact and trajectory: Pricing headwind ~300bps largely due to bonus packs; program winding down into summer as merchandising normalizes .
  • Boulder Canyon growth: Non-seed oil credentials, strong velocity and distribution expansion across natural and traditional channels; new products (Canyon Poppers, wavy, tortilla chips) driving optimism .
  • Partner Brands management: Expected continued declines as Utz-branded products take more share on IO trucks; Partner Brands are retailer-driven and not directly controlled .
  • Channel mix: Strength in natural, discount, and club; convenience showing signs of improvement but not yet back to growth; focus on distribution, pack-price architecture, and flavor innovation for C-store .
  • Pricing cadence: Forward outlook implies ~1pp price investment; bonus packs helped trial in Expansion markets and value in Core but are being wound down .

Estimates Context

  • Q1 2025 revenue was essentially in line with S&P Global consensus ($352.1M actual vs ~$352.2M consensus), and Adjusted EBITDA modestly beat ($45.1M actual vs ~$44.8M consensus). EPS consensus was unavailable for Q1 2025.* .
  • Forward (Q2 2025) consensus at quarter-end indicated revenue ~$362.0M and EBITDA ~$49.5M; management commentary emphasized strong summer sell-through and margin expansion via productivity savings, with bonus packs winding down.* .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mix shift continues toward Branded Salty Snacks (+4.9% Organic) with strong volume momentum (+6.3pp) and Power Four resilience amid category softness — supportive of sustained share gains .
  • Margin structure improving on productivity: Adjusted Gross Margin +100bps and Adjusted EBITDA margin +30bps despite pricing investment; Q1 marks nine straight quarters of y/y Adj. EBITDA margin expansion .
  • Value actions (bonus packs) succeeded in driving volume and trial, especially in Expansion geographies; with the program winding down, watch normalization of pricing/mix and potential underpinning for margin trajectory .
  • Supply chain investments (Rice DC, kettle/pretzel capacity) and targeted capex should sustain productivity and support geographic expansion; near-term working capital/capex weigh on GAAP gross margin and cash flow seasonally .
  • FY25 outlook reaffirmed in Q1; modest tariff exposure given domestic sourcing is a de-risking factor; later Q2 updates raised top-line outlook and tightened EBITDA growth range (context for forward expectations) .
  • Balance sheet manageable with 4.0x net leverage and ample liquidity; dividend actions in Q1 underscore capital return while investing in growth .
  • Near-term focus: watch convenience channel recovery, Boulder Canyon distribution/velocity ramp, and the cadence of pricing investments as bonus packs taper; monitor CFO transition and execution continuity .
Notes:
- All financial and operational figures are sourced from company documents cited inline.
- S&P Global consensus figures are marked with an asterisk and accompanied by the statement “Values retrieved from S&P Global.”