Utz Brands Reports Mixed Financial Results, Sees Growth in Gross Profit and Net Income

Utz Brands, Inc. reported its financial results for the thirty-nine weeks ended September 29, 2024, revealing a mixed performance compared to the previous fiscal period. Net sales decreased to $1,068,236,000 from $1,086,138,000, reflecting a decline of 1.6%. This decrease was attributed to the sale of the Good Health and R.W. Garcia brands, which accounted for a 3.1% reduction in sales, alongside continued conversions to Independent Operator (IO) routes.

Despite the drop in sales, the company experienced a significant increase in gross profit, which rose to $375,350,000 from $341,158,000, resulting in a gross profit margin improvement from 31.4% to 35.1%. This increase was driven by a 4% rise in volume from Power Brands, which constituted 77% of total volume, while Foundation Brands saw an 11% decrease.

Operating income for the thirty-nine weeks surged to $51,670,000, a substantial increase from $5,840,000 in the prior year. Net income also improved significantly, reaching $28,616,000 compared to a net loss of $(6,820,000) in the previous period. The company reported a basic income per Class A Common Stock of $0.17, up from $0.03 in the prior year.

Utz Brands undertook strategic divestitures, including the sale of certain assets and brands to affiliates of Our Home for $167.5 million, which contributed a gain of $44 million. Additionally, the company sold its Berlin, PA and Fitchburg, MA manufacturing facilities for $18.5 million, recognizing a gain of $4.3 million. These transactions were part of a broader strategy to streamline operations and reduce costs.

Total current assets increased to $344,365,000 from $328,053,000, while total liabilities decreased to $1,259,383,000 from $1,363,053,000. The company’s total stockholders' equity rose to $685,683,000 from $669,496,000, reflecting a stable financial position.

Operating costs management remains a focus, with selling, distribution, and administrative expenses slightly decreasing to $324,100,000 from $326,000,000. The company continues to navigate a competitive landscape, with rising commodity costs impacting profitability, although strategies such as hedging and pricing actions are in place to mitigate these effects.

Overall, Utz Brands is adapting to market conditions while pursuing growth through strategic asset sales and operational efficiencies, positioning itself for future performance improvements.