Utz Brands Inc., a leading U.S. manufacturer of branded salty snacks, reported financial results for the company’s fiscal first quarter ended April 3, 2022.
Highlights:
- Net sales increased 26.6% year-over-year. Organic net sales increased 20.7% year over year.
- IRI retail sales increased 18.1% year-over-year driven by strong Power Brands growth of 20.1%.
- GAAP net loss was $(31.9) million vs. $(23.3) million in the year-ago period.
- Adjusted EBITDA was $36.5 million vs. $37.9 million in the year-ago period.
- The company is raising its full-year fiscal 2022 net sales outlook and reaffirming its adjusted EBITDA outlook.
“We are pleased to deliver record first quarter net sales with organic net sales growth of nearly 21 percent,” Dylan Lissette, chief executive officer of Utz, said in the announcement. “Consumer demand for our strong portfolio of brands is at an all-time high, and we are incredibly excited about the continued opportunity to improve our market position in key growth channels and geographies. In addition, as inflation continues to increase, we are taking incremental price actions to help offset higher costs, and we are encouraged by our continued sales volume increases as price elasticity is better than we anticipated.”
Mr. Lissette continued, “As a result of our strong top-line trends, we are raising our net sales growth expectations for fiscal 2022. Furthermore, we remain on track to achieve our profit outlook as our pricing actions, along with our productivity programs, give us confidence that we will be able to offset the continuing high inflation as we exit 2022 and move into 2023.”
First-quarter growth highlights
For the 13-week period ended April 3, 2022, the company’s retail sales as measured by IRI MULO-C increased 18.1% versus the prior-year period, as compared to Salty Snack Category growth of 13.4%. Sales growth was driven by a healthy balance of net price realization and volume gains. The company’s Power Brands’ retail sales increased 20.1% versus the prior-year period. Power Brands’ sales growth versus the prior-year period was led by Utz, ON THE BORDER, Zapp’s, TORTIYAHS!, Hawaiian®, TGI Fridays, and Boulder Canyon. Retail sales increased double digits with share gains across all three geographies: core, expansion, and emerging. The company’s Foundation Brands increased 6.0% reflecting the continued strategy to focus its resources on its Power Brands.
Fiscal year 2022 outlook
For fiscal 2022, the company is raising its total net sales growth outlook from 7-10% to 10-13%, and its organic net sales growth outlook from 4-6% to 8-10%. This improved outlook for net sales growth reflects continued strong consumer demand for the company’s advantaged portfolio of snacking brands, and higher pricing related to increased input costs.
For fiscal 2022, the company is raising its expectation for gross input cost inflation from the low-double digits to mid-to-high-teens as key input costs have increased significantly largely due to geopolitical events. That being said, the company is taking incremental pricing actions this year to help offset these cost increases. As the benefits of the company’s pricing actions and productivity programs continue to build, the company continues to expect to offset higher inflation in fiscal 2022. As a result, the company’s adjusted EBITDA outlook is unchanged and expects fiscal 2022 adjusted EBITDA to grow modestly versus fiscal 2021 adjusted EBITDA of $156.2 million. Utz continues to expect stronger adjusted EBITDA performance in the second half of fiscal 2022, and in fiscal 2023.
