Vending

Utz Brands lifts Q2 2022 sales, earnings slide

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August 12, 2022

Utz Brands Inc. lifted its sales for Q2 2022 but suffered an earnings drop against the prior year period, according to an earnings release. Highlights include:

• Net sales in the quarter increased 17.5% from $297.9 million in Q2 2021 to $350.1 million for Q2 2022, driven by organic net sales growth of 13.6% and acquisitions of 5.1%, partially offset by the company's continued shift to independent operators and the resulting increase in sales discounts that impacted net sales growth by 1.2%.
• Net income fell from $16.2 million to $2.5 million in the comparative quarters.
• Adjusted net income decreased 3.3% from $19 million to $18.4 million primarily due to an increase in net interest expense and core depreciation and amortization expense.
• EPS on a basic basis fell from 22 cents to 4 cents and on a diluted basis from 21 cents to 4 cents.
• Adjusted EPS was flat at 13 cents.
• Organic net sales growth was driven by favorable price/mix of 13% and volume gains of 0.6%. The organic volume growth in the quarter was consistent with the company's expectations, as price elasticity was negligible, and growth was primarily impacted by SKU rationalization focused on strategic reductions in private label and certain partner brands.
• Retail sales increased 16.% versus the prior-year period, as compared to salty snack growth of 14.8%.
• The company's Power Brands' retail sales increased 17.3% versus the prior-year period led by Utz, On The Border, Zapp's, Tortiyahs! Hawaiian, TGI Fridays and Boulder Canyon.
• The company's Foundation Brands increased 7.7%.

Shares traded Thursday at $17.71 against a 52-week range of $12.06-$20.44.

"We are pleased with our second quarter results as we continued our sales momentum, drove market share gains, and delivered double digit adjusted EBITDA growth," CEO Dylan Lissette said in the press release. "While the operating environment continues to be challenging, our team is executing well against our multi-faceted growth strategies and we are raising our full-year sales outlook. In addition, we continue to expect that our pricing actions and productivity programs will offset cost inflation in the second half of the year. Importantly, visibility into our cost structure is improving, and based on these factors, we are also raising our adjusted EBITDA outlook for fiscal 2022."

The company raised its total net sales growth outlook for 2022 from 10-13% to 13-15%, and its organic net sales growth outlook from 8-10% to 10-12%.