Utz Brands Inc (NYSE:UTZ) Reports Mixed Q3 Results with Revenue Slight Miss and Adjusted EPS In-Line

Utz Brands Inc (NYSE:UTZ) reported financial results for its third fiscal quarter, revealing a mixed performance against analyst expectations. The snack manufacturer posted sales growth and adjusted earnings that largely aligned with Wall Street's projections, though the market's initial reaction appeared to reflect broader considerations beyond the headline numbers.

Quarterly Performance Versus Expectations

The company's third quarter results presented a nuanced picture when measured against analyst forecasts. Revenue came in at $377.8 million, representing a 3.4% year-over-year increase but falling just short of the $378.2 million analysts had anticipated. This slight revenue miss of approximately 0.1% suggests the company's top-line growth, while positive, didn't quite meet market expectations.

On the profitability front, Utz delivered adjusted earnings of $0.23 per share, essentially matching the consensus estimate of $0.2321. This alignment on earnings indicates the company's cost management and operational efficiency efforts are tracking as expected, even as revenue growth slightly lagged projections.

Key financial metrics from the quarter include:

• Net Sales: $377.8 million (up 3.4% year-over-year)
• Adjusted EPS: $0.23 (versus $0.21 in prior year)
• Adjusted EBITDA: $60.3 million (up 11.7%)
• Branded Salty Snacks Organic Net Sales: Increased 5.8%

Market Reaction and Price Movement

Following the earnings release, Utz shares showed notable strength in pre-market trading, rising approximately 3.3%. This positive movement contrasts with the stock's recent performance, which saw declines of around 2.8% over the past month. The market's initial reaction suggests investors may be focusing on the company's maintained profitability and strategic initiatives rather than the slight revenue shortfall.

Strategic Developments and Outlook

Management highlighted several positive operational achievements, including their ninth consecutive quarter of volume share growth in the salty snacks category. The company also announced an expansion of its California presence through the acquisition of direct store delivery distribution assets, targeting what they describe as the nation's largest salty snack market valued at $4.1 billion.

For the full fiscal year 2025, Utz raised its organic net sales growth outlook to approximately 3%, up from the previous expectation of 2.5% or better. The company reaffirmed its adjusted EBITDA growth guidance of 7% to 10% and adjusted earnings per share growth of 7% to 10%.

When compared to analyst estimates for the full year:

• Utz's raised organic sales growth guidance of ~3% aligns with market expectations
• The company's maintained EBITDA and EPS growth targets suggest confidence in hitting full-year targets
• Fourth quarter performance will be crucial for meeting annual objectives

Operational Highlights and Challenges

The quarter demonstrated the strength of Utz's core branded portfolio, with Power Four Brands including Utz, On The Border, Zapp's, and Boulder Canyon showing retail sales growth of 7.1%. However, the company faced margin pressure in its reported numbers, with gross profit margin declining 220 basis points to 33.6%, though adjusted gross profit margin expanded 210 basis points to 41.1%.

The company continues to navigate increased selling, distribution, and administrative expenses, which rose to 32.6% of net sales from 30.1% in the prior year period, primarily due to investments supporting geographic expansion and growth initiatives.

For investors seeking more detailed analysis of Utz Brands' earnings trajectory and future estimates, additional earnings information and projections are available on the company's earnings estimates page.

Disclaimer: This article presents factual information from Utz Brands' earnings release and analyst estimates for educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any security. Investors should conduct their own research and consult with financial advisors before making investment decisions.