Utz Brands Stock Slides As Q2 EPS Miss Estimates, Cuts FY21 EPS Outlook, Warns On Higher Costs

Utz Brands Inc UTZ reported second-quarter FY21 sales growth of 23.1% year-on-year, to $297.9 million, beating the analyst consensus of $290.29 million. Pro Forma net sales declined 4% to $299.2 million.
Adjusted gross profit grew 16.6% Y/Y to $105.4 million, while the adjusted gross profit margin contracted 200 basis points to 35.4%.
The operating margin was 1.5%, and operating income for the quarter declined 75% to $4.5 million.
Utz Brands held $26.7 million in cash and equivalents as of July 4, 2021.
Adjusted EBITDA of $35.7 million increased 9.5%, and the adjusted EBITDA margin declined by 150 basis points to 12%.
Adjusted EPS of $0.13 missed the analyst consensus of $0.15.
"While consumer demand for our products remains strong, our second quarter margins were significantly impacted by higher than planned inflation across key input costs which include commodities, transportation, and labor," said CEO Dylan Lissette.
Outlook: Utz Brands expects FY21 adjusted EPS of $0.55 - $0.60 (prior $0.70 – $0.75), versus the consensus of $0.69.
The company expects FY21 adjusted EBITDA of $160 million - $170 million (prior $180 million – $190 million).
Utz Brands continues to expect net sales consistent with FY20 Pro Forma net sales of $1.16 billion with modest organic sales growth, versus the consensus of $1.16 billion.
It expects higher commodity, transportation, and labor costs to continue to be more elevated than initially expected for the remainder of FY21.
Price Action: UTZ shares are trading lower by 5.42% at $19.69 on the last check Thursday.

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