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Utz Brands, Inc. (UTZ)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered healthy top-line and adjusted profitability, with Net Sales up 3.4% to $377.8M and Adjusted EBITDA up 11.7% to $60.3M; GAAP results were pressured by a $13.4M tax expense leading to a net loss of $(20.2)M despite positive operating trends .
  • Branded Salty Snacks Organic Net Sales rose 5.8% (89% of sales), with volume/mix +7.0% and pricing −1.2%; total company volume/mix +4.5% offset pricing −1.1%, reflecting targeted promotions in a rational pricing environment .
  • Guidance raised: FY2025 Organic Net Sales growth increased to ~3% (from 2.5%+), while Adj. EBITDA growth of 7–10% and Adj. EPS growth of 7–10% were reaffirmed; interest expense ~$46M, capex ~$100M, tax rate 17–19%, and net leverage approaching ~3x YE maintained .
  • Strategic catalyst: acquisition of Insignia’s California DSD routes to accelerate West Coast expansion; Utz plans to introduce products on these routes in early 2026, targeting long runway from 1.9% CA share vs. 6.6% core average .
  • Versus S&P Global consensus, revenue modestly beat at $377.8M vs $374.3M*, and Adjusted EBITDA beat at $60.3M vs $59.0M*; EPS consensus unavailable from the feed (Street likely refines models post-call) .

Values marked with * are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Branded momentum: Branded Salty Snacks Organic Net Sales +5.8% with nine consecutive quarters of volume share gains; Power Four Brands retail sales +7.1% led by Boulder Canyon .
  • Margin execution: Adjusted Gross Margin expanded +210bps to 41.1% and Adjusted EBITDA margin rose +120bps to 16.0% on productivity savings, more than offsetting supply chain cost inflation .
  • Strategic expansion: Announced acquisition of Insignia’s California DSD routes; “We’re confident that these assets will complement our Westward expansion strategy” — CEO Howard Friedman .

What Went Wrong

  • GAAP compression: Gross margin down 220bps to 33.6% and GAAP net loss $(20.2)M due to higher costs and $13.4M tax expense; EBITDA decreased 22.0% to $23.8M (before adjustments) .
  • Higher operating costs: SD&A rose to 32.6% of sales (Adjusted SD&A 24.8%, +50bps), reflecting investments to support expansion capabilities and delivery costs .
  • Category and brand-specific headwinds: On The Border softness (regional value-seeking behavior and an isolated issue under correction), and modest −1.1% price drag as promotions supported trial in expansion markets .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$365.5 $366.7 $377.8
GAAP Gross Margin (%)35.8% 34.6% 33.6%
Adjusted Gross Margin (%)39.0% 39.8% 41.1%
GAAP Net Income ($M)$0.8 $10.1 $(20.2)
GAAP Diluted EPS ($)$(0.03) $0.12 $(0.17)
Adjusted EBITDA ($M)$54.0 $48.7 $60.3
Adjusted EBITDA Margin (%)14.8% 13.3% 16.0%
Adjusted EPS ($)$0.21 $0.17 $0.23

Segment/net sales drivers – Q3 2025

  • Company: Volume/mix +4.5%; Price −1.1% .
  • Branded Salty Snacks (89% of sales): $337.4M; Volume/mix +7.0%; Price −1.2%; Organic +5.8% .
  • Non‑Branded & Non‑Salty (11%): $40.4M; Volume/mix −12.7%; Price −0.4%; Organic −13.1% .
SegmentSales ($M)YoY GrowthVolume/MixPrice
Branded Salty Snacks$337.4 +5.8% +7.0% −1.2%
Non‑Branded & Non‑Salty$40.4 −13.1% −12.7% −0.4%
Total$377.8 +3.4% +4.5% −1.1%

KPIs – Q3 2025 (13 weeks ended 9/28/25)

  • Branded Salty Snacks Retail Sales +4.8% vs Salty Snacks category −0.2% .
  • Retail volumes +3% vs category −1.2% .
  • Power Four Brands Retail Sales +7.1% .
KPIQ3 2025
Branded Retail Sales YoY+4.8%
Category Retail Sales YoY−0.2%
Retail Volumes YoY+3.0%
Category Volumes YoY−1.2%
Power Four Retail Sales YoY+7.1%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Net Sales GrowthFY2025≥2.5% (raised on 7/31/25) ~3% Raised
Adjusted EBITDA GrowthFY20257–10% (tightened on 7/31/25) 7–10% Maintained
Adjusted EPS GrowthFY20257–10% (lowered from 10–15% on 7/31/25) 7–10% Maintained
Effective Tax RateFY202517–19% 17–19% Maintained
Interest ExpenseFY2025~$46M (up from $43M on 5/1/25) ~$46M Maintained
Capital ExpendituresFY2025~$100M (high end of $90–$100M by 7/31/25) ~$100M Maintained
Net LeverageFY2025 YEApproaching ~3x Approaching ~3x Maintained
DividendQ3 2025—$0.061/share declared, payable 10/2/25 Initiated/Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Supply chain & productivityTargeting ~6% FY25 productivity; consolidating Grand Rapids plant; automation and network optimization to drive margin/FCF Adj. GP margin +210bps; productivity offset inflation and supply chain costs; “second wave” of value capture incl. indirect procurement, OEE, analytics/automation Positive execution; savings normalizing to 3–4% of COGS
California expansionNone prior to Q3Acquired Insignia DSD routes; products to begin on routes in early 2026; included in 2025 outlook New growth vector
Pricing & promotionsBonus packs/trade used to support value; pricing −1.0% in Q2 Pricing −1.1% in Q3; “surgical” revenue management; expected ~1% drag into Q4 Managed, supports share/volume
Category conditionsModest softness but improving sequentially; Utz growing ahead of category CEO remains “salty bull”; category improving through year; innovation/communication supportive Stabilizing
Brand performanceBranded +4.9% (Q1) and +5.4% (Q2) Branded +5.8%; Boulder Canyon strong; On The Border softness being corrected Mixed: core strong; OTB near-term fix
2026 outlookCapex step-down anticipated; FCF to improve 2026 inflection: capex $60–$70M, FCF priority; no structural impediment to 16% EBITDA longer term Constructive

Management Commentary

  • “Utz delivered another quarter of strong performance… Branded Salty Snacks Organic Net Sales growth of 5.8%… ninth consecutive quarter of volume share growth. The various productivity initiatives… are significantly contributing to our margin.” — CEO Howard Friedman .
  • “We are raising our 2025 Organic Net Sales outlook again to… approximately 3%... Looking forward… free cash flow will be a key priority at Utz.” — CFO BK Kelley .
  • On California: “We… acquired select distribution assets… to accelerate our market penetration… confident these assets will complement our Westward expansion strategy” — CEO .
  • On 2026 and margins: “There’s nothing structural… from getting to 16% EBITDA… capex steps down… focus on free cash flow” — CFO .
  • On potatoes and gross margin: weather-related crop issues increased input usage in Q3, “essentially behind us and isolated” — CFO .

Q&A Highlights

  • California DSD expansion: Routes provide infrastructure and retailer relationships; product introductions planned early 2026; deal costs included in guidance; not expecting IO conversion dynamics like prior cycles .
  • Pricing/promotions: ~1% pricing drag as planned; “surgical” revenue management; promotions to support trial in expansion and value for consumers .
  • Input costs: East/Midwest chipping potato shortages raised cost-to-produce in Q3; issue resolved post-quarter; distribution cost productivity helped offset .
  • Brand dynamics: On The Border softness tied to regional value-seeking and an isolated issue; correction expected to start in Q4 and into 2026; Boulder Canyon gaining distribution and velocity, ACV ~50–52% with further shelf gains in 2026 .
  • Category/competition: Innovation and ingredient simplification should support category; competitor moves seen as net positive for aisle traffic; Utz monitoring protein chips, plans to address consumer trends in 2026 lineup .

Estimates Context

  • Revenue: $377.8M vs $374.3M consensus* → modest beat .
  • Adjusted EBITDA: $60.3M vs $59.0M consensus* → beat .
  • EPS: Primary EPS consensus unavailable from SPGI feed; Adjusted EPS reported at $0.23 (non-GAAP), while GAAP diluted EPS was $(0.17) .
  • Implications: Modest top-line and EBITDA beats should support estimate revisions for FY25 Organic Net Sales (~3%) and EBITDA trajectory; modelers likely refine Q4 price/mix and 2026 capex/FCF assumptions following California DSD and productivity commentary .

Values marked with * are from S&P Global.

MetricQ3 2025 ActualQ3 2025 Consensus*Delta
Revenue ($)$377,800,000 $374,252,660*+$3,547,340
Adjusted EBITDA ($)$60,300,000 $58,966,680*+$1,333,320
Primary EPS$(0.17) GAAP ; $0.23 Adj. N/A*—

Key Takeaways for Investors

  • Branded-led growth remains durable: Branded Salty Snacks +5.8% with broad share gains; Boulder Canyon continues to scale distribution and velocity, supporting above-category growth .
  • Quality of earnings improving beneath GAAP noise: +210bps Adj. GP margin and +120bps Adj. EBITDA margin expansion underscore productivity traction; GAAP loss tied largely to tax and non-core costs .
  • Guidance momentum intact: Revenue outlook raised to ~3% while maintaining Adj. EBITDA and EPS ranges; sets favorable setup for modest estimate upward bias into Q4 .
  • 2026 FCF inflection: Capex step-down to $60–$70M and sustained productivity (3–4% of COGS) should accelerate deleveraging and support margin aspirations toward 16% over time .
  • California is a multi-year TAM unlock: DSD acquisition provides infrastructure; with CA at ~10% of U.S. salty snacks and Utz at just ~1.9% share, runway is significant; execution updates in 2026 will be key catalysts .
  • Near-term watch items: Price/mix drag (~1%) as promotions continue; monitor On The Border recovery, potato/input normalization, and SD&A discipline as expansion investments proceed .
  • Dividend support and liquidity: $0.061/share quarterly cash dividend declared; liquidity ~$197.7M with net leverage 3.9x TTM Normalized Adjusted EBITDA as of Q3 .

Appendix: Additional Data Points

  • Liquidity: $57.7M cash and $140.0M revolver availability ($197.7M total) at quarter-end .
  • Net debt and leverage: Net debt $807.9M; Net Leverage Ratio 3.9x on TTM Normalized Adjusted EBITDA $207.2M .
  • Cash flow YTD: Operating cash flow $47.3M; capex $89.2M; dividends and distributions $28.8M .