Name: Utz Brands, Inc. Q2 2025 Earnings Call
Start: 2025-07-31T13:30:00.000Z

Executive Summary

Q2 2025 delivered volume-led growth and a revenue beat, with Net Sales up 2.9% to $366.7M and Branded Salty Snacks +5.4%; Adjusted Gross Margin expanded +220bps to 39.8% while Adjusted EBITDA slipped 2.0% to $48.7M as SD&A investments increased .
Utz raised FY25 Organic Net Sales guidance to “+2.5% or better” (from low-single digits) and tightened Adj. EBITDA growth to 7–10% (from 6–10%), but lowered Adj. EPS growth to 7–10% (from 10–15%) due to higher interest and D&A tied to accelerated capex; interest expense raised to ~$46M and capex to ~$100M .
Consensus context: Q2 revenue beat S&P Global consensus ($366.7M vs $361.97M*) while Adj. EBITDA was slightly below ($48.7M vs $49.55M*); EPS consensus was unavailable*, implying potential estimate recalibration toward EBITDA back-half weighting and EPS headwinds from interest/D&A .
Strategic catalyst: supply chain transformation (closure of Grand Rapids, automation, capacity adds) supports productivity savings and margin expansion; management reiterated confidence in back-half EBITDA acceleration and geographic expansion momentum .
Stock reaction: management acknowledged the stock was down ~11% at the open, tied to EPS guidance mechanics (higher interest and D&A), not deterioration in operating health .

What Went Well and What Went Wrong

What Went Well

Volume-led top-line with revenue beat: Net Sales +2.9% to $366.7M; volume/mix +3.9% offset price -1.0% (bonus packs neutral net sales impact); Branded Salty Snacks +5.4%, led by Power Four brands .
Margin expansion where it matters: Adjusted Gross Margin +220bps to 39.8% from productivity savings; sequential improvement vs Q1 (38.2% → 39.8%) .
Share gains despite category softness: Retail Sales +3.3% and Retail Volumes +4.3% vs category -1.5%; eight consecutive quarters of volume share gains; accelerating growth in Expansion geographies .
Management quote: “We are raising our 2025 Organic Net Sales outlook… and tightening our Adjusted EBITDA range… strategic investments… will position us for sustained Adjusted EBITDA margin expansion” – Bill Kelley, CFO .

What Went Wrong

EBITDA and EPS pressure from investment cadence: Adjusted EBITDA -2.0% YoY to $48.7M; Adj. EBITDA margin -70bps to 13.3% on higher SD&A (capabilities, distribution, marketing) .
Adj. EPS down 10.5% to $0.17 on higher SD&A, D&A, and interest; diluted GAAP EPS $0.12; EPS FY25 growth guide lowered to 7–10% (from 10–15%) due to interest/D&A from accelerated capex .
Non-Branded & Non-Salty Snacks declined 11.8% with volume/mix -13.4% (Partner Brands, Dips & Salsas), partially offset by +1.6% pricing, highlighting ongoing portfolio pruning headwinds .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$341.0	$352.1	$366.7
Diluted EPS ($USD)	$0.03	$0.09	$0.12
Adjusted EPS ($USD)	$0.22	$0.16	$0.17
Gross Profit Margin %	35.0%	33.6%	34.6%
Adjusted Gross Profit Margin %	39.4%	38.2%	39.8%
Adjusted EBITDA ($USD Millions)	$53.1	$45.1	$48.7
Adj. EBITDA Margin %	15.6%	12.8%	13.3%

Q2 2025 Actual vs Consensus (S&P Global):

Metric	Q2 2025 Actual	Q2 2025 Consensus*	Surprise
Revenue ($USD Millions)	$366.7	$361.97*	+$4.73M / +1.3%
Adjusted EBITDA ($USD Millions)	$48.7	$49.55*	-$0.85M / -1.7%

Values retrieved from S&P Global.*

Segment Breakdown (Q2 2025):

Segment	Net Sales ($USD Millions)	YoY Growth %	Volume/Mix %	Pricing %
Branded Salty Snacks	$322.0	+5.4%	+6.9%	-1.5%
Non-Branded & Non-Salty Snacks	$44.7	-11.8%	-13.4%	+1.6%
Total Company	$366.7	+2.9%	+3.9%	-1.0%

KPIs and Balance Sheet Highlights:

KPI	Q2 2025
Retail Sales YoY (Branded Salty Snacks)	+3.3% vs category -1.5%
Retail Volumes YoY	+4.3% vs category -1.5%
Liquidity	$170.9M (Cash $54.6M + Revolver availability $116.3M)
Net Debt	$826.3M; Net Leverage 4.1x (TTM Normalized Adj. EBITDA $200.9M)
YTD Cash from Operations	-$3.9M (seasonal working capital)
YTD Capex	$65.7M; Dividends & Distributions $20.1M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Net Sales Growth	FY 2025	Low-single digits	+2.5% or better	Raised
Adjusted EBITDA Growth	FY 2025	+6% to +10%	+7% to +10%	Tightened upward low end
Adjusted EPS Growth	FY 2025	+10% to +15%	+7% to +10%	Lowered
Effective Normalized Tax Rate	FY 2025	17%–19%	17%–19% (unchanged)	Maintained
Net Interest Expense	FY 2025	~$43M	~$46M	Raised
Capital Expenditures	FY 2025	$90–$100M	~$100M	Tightened to high end
Net Leverage Ratio	FY 2025 YE	Approaching 3x	Approaching 3x (unchanged)	Maintained
Dividend	Q3 2025	—	$0.061 per share declared (paid Jul 3, 2025)	Announced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Supply chain transformation	2024: network optimization underpinning margin expansion	Announced Grand Rapids closure; automation/potato chip line; warehousing insourcing; productivity ~6% FY25	Accelerating execution
Geographic expansion & DSD	Reaffirmed hybrid model benefits; expansion geographies momentum	Distribution gains across 30 expansion geographies; investments in routes/IO support; stronger core and expansion share	Broad-based progress
Category/promotions	Navigating promotional normalization; bonus packs in Q1 impacted pricing	Category still soft; value/rational environment; bonus packs ended April (net sales neutral Q2)	Stable competitive backdrop
Boulder Canyon & Power Four	Boulder Canyon above $100M by Q4’24; Power Four strength	Boulder Canyon driving mix/margins; runway with ~49–50% ACV; Power Four retail sales +5.7%	Positive mix tailwind
C-store channel	Improving but lagging in prior periods	Continued improvement; targeted assortment; expect flattish by year-end	Improving
EPS guidance mechanics	FY25 EPS guide 10–15% prior	Lowered to 7–10% due to higher interest/D&A from accelerated capex	Near-term EPS headwind
Tariffs/regulatory	Minimal FY25 impact anticipated (inputs domestic)	No change noted; continued disclosure of risks	Stable outlook

Management Commentary

“We are raising our 2025 Organic Net Sales outlook… tightening our Adjusted EBITDA range… lowering our Adjusted EPS guidance… linked to accelerated capex investments. We believe these strategic investments… will position us for sustained Adjusted EBITDA margin expansion” – Bill Kelley, CFO .
“Q3 is typically a significant step up versus Q2… accelerated capex does accelerate productivity savings… plant closure… portfolio mix benefit… we feel like we’re in a good place on the guide” – Howard Friedman, CEO .
“Core dollar and volume share gains… promotional optimization to maintain price gaps primarily in potato chips… convenience store channel trends improving” – Management remarks in presentation .
“Bonus packs ended in April and had no net sales impact on the quarter… our value proposition remains strong” – Howard Friedman .

Q&A Highlights

EPS Guide Down Mechanics: EPS growth cut to 7–10% from 10–15%; ~$0.03 midpoint impact split roughly half interest and half D&A, driven by earlier/higher capex pacing; EBITDA remains the primary health indicator .
Back-Half Confidence: Sequential margin step-up expected (seasonality, productivity, mix), supporting back-half weighted Adj. EBITDA growth .
Distribution/Channels: Broad-based gains in expansion and core markets; hybrid DSD/DTW model enables tailored service; C-store improving, aiming for flattish by YE .
Portfolio/Subcategories: Potato chips strong; pretzels mixed (Utz brand in-line, others softer); tortilla chips lapping prior promotions; Boulder Canyon a margin accretive premium brand .
Marketing: Elevated spend (+44% YoY in Q2) across retail media, social/digital, brand campaigns to support expansion and drive household penetration .

Estimates Context

Q2 2025 comparisons: Revenue beat consensus ($366.7M vs $361.97M*), Adj. EBITDA slight miss ($48.7M vs $49.55M*), EPS consensus unavailable* .
Forward view: Q3 2025 consensus implies Revenue ~$374.25M* and EBITDA ~$58.97M* (9 estimates for revenue), consistent with management’s back-half EBITDA weighting from productivity and mix [GetEstimates].
Implication: Street likely lowers EPS trajectories to reflect higher interest/D&A while maintaining or modestly lifting revenue/margin expectations tied to productivity and expansion.
Values retrieved from S&P Global.*

Key Takeaways for Investors

Narrative support for multiple expansion: Strong volume/mix and Branded Salty Snacks outperformance with Adjusted Gross Margin expansion suggests sustainable operating improvements; EPS headwinds are financing/depreciation-related, not core earnings deterioration .
Back-half setup: Seasonality, productivity ramp (automation, footprint consolidation), and favorable mix (Boulder Canyon) underpin higher Q3/Q4 EBITDA; watch execution on Grand Rapids closure timing and savings realization .
Estimate recalibration: Expect EPS consensus drift lower on interest/D&A, with revenue/margin stable to up; trading catalysts include revenue beats and confirmation of margin expansion in Q3 .
Portfolio strategy: Continued pruning of non-branded/non-salty while leaning into Power Four; expanding distribution and household penetration are key drivers of share wins and visibility for sustained top-line growth .
Risk monitoring: Category softness, SD&A investment phasing, healthcare cost inflation, and higher leverage (4.1x) near term; liquidity robust ($170.9M) and leverage targeted to approach ~3x by YE25 .
Dividend continuity: Quarterly dividend of ~$0.061/share underscores cash return amid capex cycle; assess sustainability alongside capex and leverage reduction plans .
Tactical: Near-term volatility tied to EPS optics may create entry points; focus on confirmation of Q3 margin step-up and expansion market momentum on upcoming prints and retail scan data .

Utz Brands, Inc. (UTZ)·Q2 2025 Earnings Summary