Vending

Utz Brands Q1 2021 sales rise, earnings fall

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May 13, 2021

Utz Brands Inc., a manufacturer of branded snacks, reported net sales increased 18% from $228 million in Q1 2020 to $269.18 million for the quarter ending April 4, 2021, according to an earnings release, driven by acquisitions of 21.5% and favorable price/mix of 1.9%. Partially offsetting these factors were volume declines of 4.7% due to transitory events, namely pantry loading at the onset of the COVID-19 pandemic and the February 2021 snowstorms.

The company reported a net loss of $23.3 million, compared to net income of $1.7 million in the prior year period, primarily driven by the loss on remeasurement of warrant liabilities as well as one-time expenses incurred as a result of the debt refinancing in January 2021.

Adjusted net income increased 65.2% from $11.5 million in Q1 2020 to $19 million in Q1 2021.

Earnings per share for Q1 2021 was a 30-cent loss on both a basic and diluted basis, while adjusted EPS was 13 cents.

The $269.18 million in revenue missed analyst expectations by $5.98 million, according to Seeking Alpha, while the non-GAAP EPS of 13 cents missed expectations by 1 cent and the GAAP EPS 30-cent loss missed by 39 cents.

Shares traded at $23.74 today against a 52-week range of $10.44-$30.09.

The company estimated the February snowstorms negatively impacted its net sales growth rate in the quarter by 200 to 300 basis points.

Retail sales as measured by IRI MULO-C increased 5.9% on a two-year CAGR basis, consistent with salty snack category growth of 6% for the same period.

The company's Power Brands' retail sales increased 7.6% on a 2-year CAGR basis, increasing to nearly 87% of sales versus approximately 84% in the same period in 2019.

Power Brand sales growth during the 2-year period was led by Utz, On The Border, Zapp's, Tortiyahs!, Golden Flake Pork Skins, Boulder Canyon, Hawaiian, TGI Fridays and Herdez. As expected, the 2-year CAGR retail sales decline of 4.3% in Foundation Brands reflects the company's continued strategy to focus its resources on its Power Brands.

"Even as we lapped significant out-performance versus the category in the early weeks of the COVID-19 pandemic last year, we are pleased with our Power Brands' sales momentum and the continued growth in our emerging and expansion geographies," Dylan Lissette, chief executive officer of Utz, said in the press release.

The company reaffirmed its full-year outlook previously provided on March 18, 2021, which excludes the impact of the pending acquisition of Festida Foods, which is expected to close in the second quarter of 2021.

The company's projected pro forma 2-year CAGR for fiscal 2020 and 2021 of approximately 6% is above the company's long-term growth outlook of 3%-4%.

For an update on how the coronavirus pandemic has affected convenience services, click here.