Vending

Utz Brands lifts Q3 2021 sales, earnings

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November 11, 2021

Utz Brands Inc. improved both its sales and earnings for the 13-week period ending Oct. 3, 2021 compared to Q3 2020, according to an earnings report.

Net sales in the quarter increased 26.1% to $312.7 million compared to $248 million in the third quarter of 2020, driven by acquisitions of 25.1% and organic net sales growth of 1%.

Net income rose to $31.4 million compared to a net loss of $25.3 million in the prior-year period. Adjusted net income increased 40.7% to $25.6 million compared to $18.2 million in the prior-year period.

Diluted earnings per share for the quarter was 40 cents and adjusted EPS was 18 cents.

The company's retail sales as measured by IRI MULO-C increased 9.5% on a two-year combined annual growth rate basis versus the salty snack category growth of 8.3% for the same period.

The company's Power Brands' retail sales increased 11.1% on a two-year CAGR basis and increased to 87% of the company's retail sales. Power Brands' sales growth during the two-year period was led by Utz, On The Border, Zapp's, Tortiyahs!, Golden Flake Pork Skins, Hawaiian, and TGI Fridays.

Consistent with the company's expectations, the two-year CAGR retail sales of the company's Foundation Brands were essentially flat reflecting the continued strategy to focus its resources on its Power Brands.

The quarterly revenue of $312.7 million surpassed analyst expectations by $5.65 million, and the non-GAAP EPS of 18 cents beat expectations by 2 cents and the GAAP EPS of 40 cents beat expectations by 33 cents, according to Seeking Alpha.

Shares traded at $18 today against a 52-week range of $15.05-$30.09.

"Consumer demand remains strong as our sales growth accelerated and we delivered two-year market share gains in the third quarter," CEO Dylan Lissette said in the press release. "Our top-line strategies are working as we drove faster growth on our Power Brands, expanded our presence in key salty snack sub-categories, improved our performance in our core geographies and the mass channel and continued our geographic expansion.

"As we face rising inflation that is impacting earnings in the short-term, we continue to implement pricing actions that will have a carry-over benefit in 2022. And while we expect high inflation and transportation challenges to continue into 2022, we are actively deploying our value creation strategies and we remain confident in our long-term growth outlook."

For the 52-week fiscal year ending Jan. 2, 2022, the company continues to expect fiscal 2021 net sales to be consistent with fiscal 2020 pro forma net sales with modest organic sales growth year over year. The company's projected pro forma two-year compound annual growth rate for fiscal 2021 of approximately 6% is above the company's long-term organic growth outlook of 3%-4%.