Utz Brands (NYSE: UTZ) – Financial Outlook Update for Fiscal 2024

Utz Brands provided a financial outlook update ahead of the 2024 Barclays Global Consumer Staples Conference.

The company revised its organic sales guidance from roughly 3% to 2-2.5% due to a “more competitive promotional environment” leading to moderated consumption trends.

Analysts at Evercore ISI noted that Utz’s commentary likely indicates moves from FLNA to regain market share through more aggressive promotional and trade practices.

UTZ shares fell 1.7% following Thursday’s market open.

During the conference, Utz’s CEO and CFO emphasized that the salty snack category is more promotional than anticipated, with consumers seeking value through promotions and their choice of channels.

Although Utz observed improvement in August’s category trends, they maintain a cautious outlook on full recovery. CEO Howard Friedman stated, “We are executing well on our distribution growth opportunities, which we expect will continue into 2025 and beyond.”

However, he noted that consumption trends moderated more than expected in the third quarter due to heightened competition, primarily driven by consumer value-seeking behavior.

Utz reiterated its outlook for adjusted EBITDA and adjusted earnings per share (EPS) growth in 2024. Adjusted EBITDA is projected to increase by 5% to 8%, while adjusted EPS is estimated to grow between 28% and 32%. The company’s net leverage ratio is expected to be approximately 3.6X at year-end fiscal 2024.