Vending

Utz Brands boosts Q3 2022 sales, earnings take a hit

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November 11, 2022

Utz Brands Inc. lifted its Q3 2022 revenue in double digits but suffered an earnings decline partially driven by interest expense, core depreciation and amortization expense, according to an earnings release. Highlights include:

• Net sales in the quarter increased 16% from $312.7 million in Q3 2021 to $362.8 million in the quarter ending Oct. 2, 2022, driven by organic net sales growth of 12.6% and acquisitions of 4.7%, partially offset by the company's continued shift to independent operators and the resulting increase in sales discounts that impacted net sales growth by 1.3%.
• Net income fell from $31.4 million to $1.5 million in the comparative quarters, primarily the result of a loss on the remeasurement of warrant liability of $3.7 million in the third quarter of 2022 compared to a gain of $36.3 million in the prior year period.
• Adjusted net income fell from $26.1 million to $22.5 million, primarily due to an increase in net interest expense and core depreciation and amortization expense.
• Adjusted EPS fell from 18 cents to 16 cents.

Shares traded at $17.26 Thursday against a 52-week range of $12.06-$19.98.

The $362.8 million in quarterly revenue beat analyst expectations by $21.06 million, while the non-GAAP EPS of 16 cents beat expectations by 2 cents, according to Seeking Alpha.

"I am very pleased with our team's execution which drove third quarter results better than our expectations," Dylan Lissette, CEO, said in the press release. "We are successfully managing the impact of higher inflation while increasing our investments to support our growth strategies."

For fiscal 2022, the company is raising its total net sales growth outlook from 13%-15% to 17%-19%, and its organic net sales growth outlook from 10%-12% to 13%-15%.