Core Insights - Investors are evaluating the value opportunities presented by Utz Brands (UTZ) and Mondelez (MDLZ) in the food sector [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] Valuation Metrics - UTZ has a forward P/E ratio of 14.22, while MDLZ has a forward P/E of 22.52, suggesting that UTZ is more attractively priced [5] - The PEG ratio for UTZ is 1.45, compared to MDLZ's PEG ratio of 5.62, indicating that UTZ may offer better value relative to its expected earnings growth [5] - UTZ's P/B ratio stands at 1.23, while MDLZ's P/B ratio is 3.40, further supporting the notion that UTZ is undervalued compared to MDLZ [6] Value Grades - Based on the valuation metrics, UTZ has a Value grade of B, while MDLZ has a Value grade of C, highlighting UTZ as the superior value option at this time [6]

Core Insights - Utz Brands, Inc. reported a strong start to Q1 2025 with organic net sales growth of 2.9%, driven by a 4.9% increase in branded salty snacks [4] Financial Performance - The company gained both dollar and volume share in the salty snacks category for the 13-week period ending March 31, 2025, as measured by Circana's MULO+ with convenience [4] - The growth momentum was attributed to the continued success of the company's Power 4 brands [4]

Financial Data and Key Metrics Changes - The company reported flat overall retail sales while achieving 3% organic sales growth in the quarter, attributed to strength in untracked channels and improved throughput from the new Rice Distribution Center [8][9] - The management indicated that there was no revenue pulled forward in the quarter, and they are pleased with the volume response [9] Business Line Data and Key Metrics Changes - The company experienced volume share gains in core markets, supported by bonus packs and incremental distribution in brands like Boulder Canyon and On the Border [10][11] - The bonus pack program contributed approximately 300 basis points to price impact, with 60 basis points attributed to true price cap investments [19][44] Market Data and Key Metrics Changes - Boulder Canyon has shown strong performance in untracked channels and is gaining retail distribution in traditional channels, with new product launches contributing to growth [22][25] - The company noted that the natural and organic segments are performing well, with Boulder Canyon being a significant growth driver [49][51] Company Strategy and Development Direction - The company aims to maintain share in core markets while expanding in new geographies, focusing on distribution gains and innovation [10][72] - Management emphasized the importance of balancing volume and value, particularly as bonus packs wind down [11][41] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about household penetration reaching an all-time high of 49%, indicating strong consumer resonance with the brand [83] - They acknowledged the need to adapt to consumer behavior and market conditions, particularly regarding value-seeking trends [75][76] Other Important Information - The company is transitioning its bonus pack program as it approaches summer, with plans to support innovation and marketing efforts [43][90] - There are ongoing efforts to improve performance in convenience stores, focusing on distribution, innovation, and collaboration with retailers [88] Q&A Session Summary Question: Difference between flat overall retail sales and 3% organic sales growth - Management explained that the difference is due to strength in untracked channels and improved distribution efficiency [8][9] Question: Impact of bonus packs on price and mix - Management confirmed that most price impacts were related to bonus packs, with a small portion from true price cap investments [19] Question: Early reception of new products in Boulder Canyon - Management reported positive consumer reception and ongoing distribution gains, with expectations for continued growth [22][25] Question: Outlook for non-branded partner brands - Management expects continued decline in partner brands but not as negative as before, focusing on growing their own brands [32][33] Question: Future of the bonus pack program - Management indicated that the program is winding down and will be evaluated based on market conditions [41][43] Question: Distribution gains in Boulder Canyon - Management confirmed significant distribution gains and ongoing opportunities in both natural and conventional channels [63] Question: Performance in convenience stores - Management highlighted the need for improved distribution and innovation in convenience stores to drive growth [88][89]

Financial Data and Key Metrics Changes - The company reported flat overall retail sales but achieved a 3% organic sales growth in the first quarter of 2025, indicating a positive trend in underlying demand despite overall sales stagnation [7][10] - The impact of bonus packs on pricing was noted to be approximately 300 basis points, with most price changes attributed to these promotions [17][19] Business Line Data and Key Metrics Changes - The Boulder Canyon brand has shown significant growth, particularly in untracked channels, and is gaining distribution in traditional retail, contributing positively to overall sales [22][25] - The company anticipates continued volume share gains in core markets, although some value share contraction is expected due to competitive pressures [11][12] Market Data and Key Metrics Changes - The company is experiencing strong momentum in the natural and organic segments, particularly with Boulder Canyon, which is expected to continue growing through innovation and increased distribution [49][52] - The performance in convenience stores is improving but has not yet returned to growth, indicating a need for strategic adjustments in that channel [85] Company Strategy and Development Direction - The company aims to balance volume and value in its core markets while expanding into new geographies, focusing on maintaining market share and driving distribution gains [11][73] - There is an emphasis on innovation and marketing to sustain consumer interest and brand loyalty, with plans to evaluate the bonus pack program based on market conditions [78][79] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about household penetration rates, which have reached an all-time high of 49%, indicating strong consumer engagement with the brand [83] - The company is closely monitoring consumer behavior and market dynamics to adapt its strategies accordingly, particularly in response to value-seeking trends among consumers [76][78] Other Important Information - The company is transitioning its bonus pack program as it moves into summer, with expectations of normalizing pricing strategies and focusing on innovation [43][44] - There are ongoing efforts to enhance brand equity and consumer awareness, particularly for Boulder Canyon, to capitalize on the growing natural and organic market [52][53] Q&A Session Summary Question: Difference between flat overall retail sales and 3% organic sales growth - Management explained that the difference is due to strength in untracked channels and improved distribution efficiency, with no revenue pulled forward [7][10] Question: Impact of bonus packs on volume and value share - Management acknowledged that bonus packs contributed to volume share gains but noted the need to balance this with long-term value sustainability [11][12] Question: Early reception of new products in Boulder Canyon - The reception has been positive, with strong growth in untracked channels and new product launches contributing to overall brand momentum [22][25] Question: Future outlook for partner brands - Management expects partner brands to continue declining but at a slower rate, as the company focuses on growing its own brand portfolio [32][33] Question: Evaluation of the bonus pack program - The program was intended as a limited-time offer, with management monitoring market conditions to determine its future [38][39] Question: Performance in convenience stores - Management indicated that improvements are being made, but growth is still dependent on overall traffic trends and strategic distribution efforts [85][88]

Company Performance - Utz Brands reported quarterly earnings of $0.16 per share, matching the Zacks Consensus Estimate, and an increase from $0.14 per share a year ago [1] - The company posted revenues of $352.08 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.01%, and an increase from $346.52 million year-over-year [2] - Over the last four quarters, Utz Brands has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2][3] Stock Outlook - Utz Brands shares have declined approximately 15.1% since the beginning of the year, compared to a 5.3% decline in the S&P 500 [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.21 for the coming quarter and $0.85 for the current fiscal year [4][7] - The estimate revisions trend for Utz Brands is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Food - Miscellaneous industry, to which Utz Brands belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Utz Brands, Inc. First Quarter 2025 Earnings Presentation May 1, 2025 Disclaimer Forward-LookingStatements Certain statements made herein are not historical facts but are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are accompanied by or include, without limitation, statements such as "will", "expect", "intends", "goal", "on track" or other similar words, phrases o ...

Financial Performance - Net sales for the thirteen weeks ended March 30, 2025, were $352.1 million, representing an increase of $5.6 million or 1.6% compared to $346.5 million for the same period in 2024[90]. - Gross profit decreased to $118.2 million for the thirteen weeks ended March 30, 2025, down from $119.6 million in the prior year, resulting in a gross profit margin of 33.6% compared to 34.5%[92]. - Selling, distribution, and administrative expenses increased by $3.8 million or 3.5% to $113.2 million for the thirteen weeks ended March 30, 2025, primarily due to higher personnel and delivery costs[93]. - Net income attributable to controlling interest was $7.5 million for the thirteen weeks ended March 30, 2025, compared to a net loss of $3.99 million in the same period of 2024[90]. - Adjusted EBITDA for the thirteen weeks ended March 30, 2025, was $45.1 million, compared to $43.4 million for the same period in 2024, with an Adjusted EBITDA margin of 12.8%[101]. Debt and Financing - As of March 30, 2025, the company had $739.3 million in variable rate indebtedness, an increase from $690.1 million as of December 29, 2024[81]. - The weighted average interest rate for the thirteen weeks ended March 30, 2025, was 4.9%, down from 6.6% during the same period in 2024[81]. - The company recorded a loss on debt extinguishment of $0.5 million related to the refinancing of its Term Loan B during the thirteen weeks ended March 30, 2025[107]. - As of March 30, 2025, $50.0 million was outstanding under the asset-based lending (ABL) facility, with $109.5 million available for borrowing[108]. - Net cash provided by financing activities was $67.6 million for the thirteen weeks ended March 30, 2025, primarily from net borrowings of $80.4 million, compared to net cash used of $154.0 million in the same period of 2024[115]. Operational Highlights - The company operates eight primary manufacturing facilities across the United States, distributing products through approximately 2,400 direct-store delivery routes[74]. - For the thirteen weeks ended March 30, 2025, retail volumes and retail sales in Expansion Geographies increased by 8.9% and 4.9%, respectively, compared to the prior year period[76]. - Boulder Canyon brand experienced a growth of 158.8% in same store velocities for the thirteen weeks ended March 30, 2025, compared to the prior year[84]. - The Core Geographies retail volumes and retail sales were up 2.9% and down 3.7%, respectively, for the thirteen weeks ended March 30, 2025, compared to the prior year[76]. Asset Management - The company sold certain assets and brands for $167.5 million on February 5, 2024, including the Good Health and R.W. Garcia brands[82]. - The company incurred $7.4 million in costs related to acquisitions, divestitures, and investments for the thirteen weeks ended March 30, 2025, compared to a gain of $44.0 million in the prior year[106]. - Cash used in investing activities for the thirteen weeks ended March 30, 2025 was $40.7 million, driven by purchases of property and equipment, contrasting with cash provided by investing activities of $158.0 million in the prior year, mainly from the sale of a business[114]. Tax and Other Income - Other (expense) income, net was $(0.6) million for the thirteen weeks ended March 30, 2025, a decrease of $19.9 million compared to $19.3 million in the prior year, primarily due to the absence of a $44.0 million gain on the sale of business[95]. - Income tax benefit for the thirteen weeks ended March 30, 2025, was $(0.6) million, a significant decrease from $26.5 million in the prior year, largely due to the Good Health and R.W. Garcia Sale[96]. Compliance and Risk Management - The company was in compliance with all financial and other covenants under the credit agreements as of March 30, 2025[116]. - The company partially guarantees loans made to IOs, which are collateralized by the routes purchased, allowing for recovery of outstanding loan value upon default[110]. - Long-term cash requirements include funding long-term debt repayments and related interest payments, as well as obligations related to deferred taxes and operating lease liabilities[112]. - There have been no material changes in market risk exposures since the last annual report filed on February 20, 2025[119]. - The company has not made any changes to critical accounting policies and estimates since the last annual report[118].

Financial Results - Utz Brands, Inc. announced preliminary first fiscal quarter 2025 results, reaffirming financial guidance for fiscal year 2025[4]. - The company reported GAAP Net Sales for fiscal year 2024, with a detailed summary by fiscal quarter available in the presentation[5]. - The company’s financial results are subject to completion of financial closing procedures and review by independent auditors[4]. Executive Changes - Ajay Kataria will transition from his role as CFO effective May 1, 2025, and will assist in a special advisor role until May 31, 2025[7]. - William J. Kelley Jr. has been appointed as the new CFO, with an annual base salary of $575,000 and a signing bonus of $50,000[11]. - Mark Schreiber, Executive Vice President, Sales and Chief Customer Officer, will retire effective May 31, 2025, and will assist in a special advisor role until June 30, 2025[12]. - Jeremy Stuart will assume the position of Executive Vice President, Sales and Chief Customer Officer effective May 31, 2025[13]. Compensation and Incentives - The new CFO will be eligible for annual incentive awards under the company's equity incentive plan, with a target grant value of 135% of his base salary[11]. - The company’s performance stock units and restricted stock units will continue to vest for departing executives based on performance metrics[12]. Additional Information - The press release and additional financial information are attached as exhibits to the current report[14].

Core Viewpoint - The article compares Utz Brands (UTZ) and Mondelez (MDLZ) to determine which company presents a better investment opportunity for value investors, highlighting UTZ as the superior option based on various valuation metrics [1]. Valuation Metrics - Utz Brands has a forward P/E ratio of 16.56, while Mondelez has a forward P/E of 23.10, indicating that UTZ is currently valued more favorably [5]. - The PEG ratio for UTZ is 1.75, compared to Mondelez's PEG ratio of 4.42, suggesting that UTZ offers better value relative to its expected earnings growth [5]. - The P/B ratio for UTZ is 1.43, while Mondelez has a P/B of 3.28, further supporting the notion that UTZ is undervalued compared to MDLZ [6]. Earnings Outlook - Utz Brands is experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, indicating a positive trend in earnings estimates [7].

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