In This Article:
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Utz Brands Inc (NYSE:UTZ) reported a 3% organic sales growth, driven by strong performance in untracked channels such as natural, discount, and club.
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The opening of the Rice distribution center has improved throughput and efficiency by consolidating six warehouses into one.
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Boulder Canyon has been a significant growth driver, with strong consumer and customer reception, and expanding distribution in traditional and natural channels.
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The company has achieved an all-time high household penetration of 49%, indicating strong consumer acceptance and retention.
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Utz Brands Inc (NYSE:UTZ) is seeing distribution gains and increased velocity for its products, particularly in expansion markets, which bodes well for future growth.
Negative Points
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The company anticipates near-term pressure on its non-branded, non-salty business, particularly in Dips & Salsa, as it laps prior year results.
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There is a competitive environment in core markets, with some value share contraction expected due to bonus pack efforts.
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The bonus pack program, while successful, is winding down, which may impact volume share gains in the future.
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Partner Brands are expected to continue declining, which could affect overall sales growth.
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Performance in convenience stores is improving but has not yet returned to growth, indicating challenges in this channel.
Q & A Highlights
Q: Can you explain the difference between flat overall retail sales and the 3% organic sales growth reported this quarter? Is this difference due to timing or unmeasured channels? A: Howard Friedman, CEO: The difference is primarily due to significant strength in our untracked channels, such as the natural channel, discount, and club. The opening of the Rice distribution center has also improved throughput, leading to earlier shipments. There is no revenue pulled forward in the quarter, and we are pleased with the volume response.
Q: How do you balance volume share gains with value share contraction in core markets, particularly with bonus pack efforts? A: Howard Friedman, CEO: We aim to hold share in our core while growing in expansion geographies. The quarter was competitive, but bonus packs and incremental distribution in Boulder Canyon and On the Border are helping. We expect a more normalized volume-to-value relationship as bonus packs wind down.
Q: What is the impact of bonus packs on price and volume/mix? A: Ajay Kataria, CFO: The impact on price was about 300 basis points, mostly due to bonus packs. There was about 60 bps not related to bonus packs, which is the true price cap investment made in the quarter.