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Utz Brands, Inc. (UTZ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered an EPS beat and a top-line miss: Adjusted EPS was $0.22 vs consensus ~$0.19 (beat), while revenue was $341.0M vs consensus ~$349.9M (miss). GAAP diluted EPS was $0.03; adjusted EBITDA rose 7.5% to $53.1M .
  • Mix and productivity drove margin expansion: gross margin +230bps YoY to 35.0% and adjusted gross margin +230bps to 39.4% despite a more promotional environment; adjusted EBITDA margin improved +160bps to 15.6% .
  • Segment performance diverged: Branded Salty Snacks organic net sales +2.9% (Power Four momentum) while Non‑Branded & Non‑Salty Snacks declined (18.2%) organically; retail volumes rose 2.2% vs category down 0.3%, with household penetration at all‑time highs .
  • FY2025 outlook: low‑single‑digit organic net sales growth, adjusted EBITDA +6% to +10%, adjusted EPS +10% to +15%, tax rate 17–19%, interest ~$43M, capex $90–$100M; net leverage approaching 3.0x (vs 3.6x YE24) .
  • Catalysts: continued productivity and network optimization (RDC launch), Boulder Canyon outperformance and expansion geographies momentum; risk is promotional intensity and non‑branded weakness normalization timing .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and bottom‑line growth: adjusted EBITDA +7.5% YoY and adjusted EPS +37.5% (helped by lower core D&A and interest expense) .
  • Branded Salty Snacks growth and share gains: organic +2.9%; retail volumes +2.2% vs category (0.3%) and household penetration reached all‑time highs; Power Four retail sales +2.6% .
  • Management execution on productivity/network optimization: ~$60M productivity savings in FY’24, accelerating automation/capacity; RDC opened in Dec. 2024 to consolidate logistics and reduce delivered costs .
    Quote: “Our strong productivity cost savings driven by our network optimization and increased capital investments gives us the flexibility to build our brands… and expand our margins.” — CEO Howard Friedman .

What Went Wrong

  • Top‑line miss vs consensus and non‑branded weakness: revenue $341.0M below ~$349.9M consensus; Non‑Branded & Non‑Salty Snacks organic (18.2%) decline (partner brands, dips & salsas) .
  • Promotional environment and price realization: net price (0.2%) in Q4; disciplined promotions contributed to lower price/mix, requiring value tactics (bonus bags/price pack architecture) .
  • Convenience channel softness persisted; tortilla chips lapping and assortment shifts weighed on near‑term performance; dips & salsa weakness expected to lapse beginning May 2025 .

Financial Results

Sequential and YoY Comparison

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$356.2 $365.5 $341.0
GAAP Diluted EPS ($)$0.23 $(0.03) $0.03
Adjusted EPS ($)$0.19 $0.21 $0.22
Gross Margin (%)35.0% 35.8% 35.0%
Adjusted Gross Margin (%)37.6% 39.0% 39.4%
Adjusted EBITDA ($USD Millions)$49.7 $54.0 $53.1
Adjusted EBITDA Margin (%)14.0% 14.8% 15.6%

Q4 2024 Actual vs Prior Year and Consensus

MetricQ4 2023Q4 2024 ActualConsensusOutcome
Revenue ($USD Millions)$352.1 $341.0 ~$349.9 Miss
GAAP Diluted EPS ($)$(0.34) $0.03 N/AN/A
Adjusted EPS ($)$0.16 $0.22 ~$0.19 Beat
Adjusted EBITDA ($USD Millions)$49.4 $53.1 N/AN/A

Note: S&P Global consensus estimates were unavailable due to access limits; consensus figures above are sourced from public aggregators (Seeking Alpha/MarketBeat/TipRanks) for context .

Segment Breakdown (Q4 2024)

SegmentNet Sales ($USD Millions)Reported YoY GrowthOrganic YoY GrowthVolume/MixPricing
Branded Salty Snacks$303 +2.9% +2.9% +3.6% (0.7%)
Non‑Branded & Non‑Salty Snacks$38 (33.9%) (18.2%) (20.9%) +2.7%
Total$341 (3.2%) Flat +0.2% (0.2%)

KPIs (Q4 highlights)

KPIQ4 2024
Retail Sales (Branded Salty Snacks) YoY+0.9% (Circana MULO+ w/Convenience)
Retail Volume YoY+2.2% vs category (0.3%)
Household PenetrationAll‑time high
Net Debt ($USD Millions)$727.3
Net Leverage Ratio3.6x (TTM Normalized Adjusted EBITDA $200.2M)
Liquidity ($USD Millions)$214.8 (Cash $56.1; RCF availability $158.7)
Cash from Operations (FY’24) ($USD Millions)$106.2
Capex (FY’24) ($USD Millions)$98.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Net Sales GrowthFY2024+2% to +2.5% (reaffirmed 10/31/24) Actual +1.3% Below guide (achieved)
Adjusted EBITDA GrowthFY2024+5% to +8% Actual +6.9% Within guide
Adjusted EPS GrowthFY2024+28% to +32% (raised 8/1/24) Actual +35.1% Above guide
Organic Net Sales GrowthFY2025N/ALow‑single digits Initiated
Adjusted EBITDA GrowthFY2025N/A+6% to +10% (≈+100bps margin expansion) Initiated
Adjusted EPS GrowthFY2025N/A+10% to +15% Initiated
Effective Tax RateFY2025N/A17%–19% Initiated
Interest ExpenseFY2025N/A~$43M Initiated
Capital ExpenditureFY2025N/A$90–$100M Initiated
Net Leverage RatioFY2025 YEN/AApproaching ~3.0x Initiated
DividendOngoingRaised to $0.061/qtr (annual $0.244) on 12/5/24 Maintained at raised level into Q4 timelineIncreased Dec 2024

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2024)Trend
Category growth & promotionsQ2/Q3 noted more competitive promotions, disciplined pricing; expected 4Q acceleration and easier laps FY’25 category growth assumption ~0–1% and normalization of promotional intensity over time Stabilizing/normalizing
Supply chain/network optimizationProductivity savings, plant dispositions, term loan repricing; capex for automation; expected margin lift RDC opened; continuing automation/capacity investments; productivity program ~$150M+ over 2024–26 Strengthening
Price pack architecture/valueIntroduced bonus bags/laddered pricing; managing gaps amid competitiveness Expanded bonus bags and pack architecture; guidance contemplates mix/margin impacts Ongoing execution
Branded vs non‑branded mixPower brands driving volume; foundation/non‑salty pressured (dips/salsa; co‑manufacturing) Branded Salty Snacks +2.9% organic vs Non‑Branded & Non‑Salty (18.2%); lapping dips/salsa headwinds starting May Positive mix shift
Expansion geographiesShare gains; distribution wins; club/natural momentum Sixth consecutive quarter of expansion share gains; more West/Midwest distribution planned Accelerating
Boulder Canyon (BFY)Double‑digit growth; expansion into cheese snacks; natural/traditional channel outperformance Surpassed $100M retail sales; January natural channel #1 chip; velocity‑led growth Strong outperformance
Convenience channelPersistent softness; price pack opportunities needed Expected modest improvement over 2025 from weaker lap; still a watch item Gradual improvement expected
Dips & salsaDistribution contraction in prior year; innovation misfire lapping Headwinds to lap starting May; progressive improvement in 2H’25 Improving lapped comps

Management Commentary

  • “In 2024, our Branded Salty Snacks delivered strong Organic Net Sales growth of nearly 4%… we exceeded our goals of Adjusted EBITDA Margin, Adjusted Earnings Per Share, and Net Leverage.” — CEO Howard Friedman .
  • “Our productivity program remains pretty strong… line of sight to $150 million now or more over the 3‑year period of ’24 through ’26… net out about 80‑ish basis points of EBITDA margin expansion [in ’25].” — CFO Ajay Kataria .
  • “You’re going to see us actually at the high end of the price ladder as well… guidance largely contemplates the impact of margins [from pack architecture/mix].” — CFO Ajay Kataria .
  • “We would expect [non‑branded] not to see another double‑digit decline… those businesses will continue to be important… but you should not see that type of decline moving forward.” — CEO Howard Friedman .
  • “We continue to see interest and enthusiasm in our portfolio… you’ll see more out West… invested in Texas, Michigan, Colorado.” — CEO Howard Friedman .

Q&A Highlights

  • Category/promotions: Management expects FY’25 category growth ~0–1% and promotional normalization; value delivered through bonus bags and price ladders rather than deep discounting .
  • Top‑line phasing: Q1 to improve through the quarter (tough January lap from strong promo in Jan’24); distribution gains and unmeasured channels support H1/H2 balance .
  • Non‑branded/dips & salsa: Lapping starts May; non‑branded expected to improve (no repeat of double‑digit decline) .
  • Productivity/automation/RDC: Continued automation and capacity expansion, procurement/logistics optimization; RDC consolidates inventory to reduce costs and improve service .
  • Tortilla chips: Weakness largely lap/assortment choices; On The Border remains competitive; bonus packs support value perception .

Estimates Context

  • EPS vs consensus: Adjusted EPS $0.22 beat consensus ~$0.19 by ~$$0.03; GAAP EPS $0.03 .
  • Revenue vs consensus: $341.0M missed ~$349.9M (driven by partner brands/dips & salsa declines and divestiture impact) .
  • EBITDA consensus: Not reliably available from S&P Global in our session; adjusters may focus on sustained margin expansion and FY’25 +6–10% adjusted EBITDA guide .
    Note: S&P Global consensus was unavailable due to access limits; public sources (Seeking Alpha/MarketBeat/TipRanks) were used for consensus context .

Key Takeaways for Investors

  • Mix‑led margin story intact: sustained adjusted gross margin expansion and +160bps adjusted EBITDA margin in Q4 position FY’25 for +6–10% EBITDA growth; tactical promotions and pack architecture enable value without sacrificing margin .
  • Top‑line composition matters: Branded Salty Snacks growth offsets managed declines in non‑branded; watch for dips & salsa lapping (from May) to ease headwinds and for continued distribution gains in expansion geographies .
  • Boulder Canyon as growth vector: BFY momentum across natural/traditional channels with velocity‑led gains; continued distribution expansion should support category outperformance .
  • Balance sheet improving: net leverage 3.6x with YE’25 target approaching ~3.0x, aided by margin expansion and scheduled debt repayment; liquidity ~$215M provides flexibility .
  • Near‑term trading lens: Expect stock to react to EPS beat vs revenue miss and to clarity around FY’25 margin expansion delivery amid promotional normalization; monitor convenience channel recovery signs and On The Border/tortilla trends .
  • Medium‑term thesis: Execution on $150M+ 3‑year productivity, network optimization (RDC, automation), and expansion geography distribution wins underpin multi‑year margin and EPS accretion despite a flattish category backdrop .
  • Dividend support: quarterly dividend increased to ~$0.061 (Dec 2024) with improving cash generation and leverage trajectory supporting returns .