Snack Company Utz Beats Q3 Earnings, Optimizes Supply Chain And Upgrades Outlook

Utz Brands Inc UTZ reported third-quarter FY23 sales growth of 2.5% year-on-year to $371.85 million, beating the consensus of $370.46 million.

Organic net sales increased 3.1% year-over-year.

Adjusted gross profit grew 1.9% Y/Y to $135.1 million, while the adjusted gross profit margin contracted 22 basis points to 36.3%.

The benefits from net price realization, productivity, and favorable sales mix more than offset cost inflation and supply chain investments; however, the continued shift to IOs impacted Adjusted Gross Margins.

Adjusted EBITDA increased 9.2% year-over-year to $52.1 million.

Adjusted EBITDA Margin expanded 86 basis points to 14%.

Utz Brands exited the quarter with cash and equivalents worth $60.09 million.

Adjusted EPS of 17 cents beat the analyst consensus of $0.16.

"During the quarter, we took aggressive actions to optimize our supply chain and portfolio for the future. These actions negatively impacted our second half volume greater than we anticipated," said Utz CEO Howard Friedman.

Outlook: Utz Brands expects total net sales growth of 2% to 3% (previously 3% to 5%) and Organic Net Sales growth of 3% to 4% (previously 4% to 6%).

The Company continues to expect Adjusted EBITDA growth of 8% to 11%.

Price Action: UTZ shares were trading higher by 5.1% at $12.75 on the last check Thursday.