Summary of UTZ Brands FY Conference Call (November 18, 2025) Company Overview - **Company**: UTZ Brands (NYSE:UTZ) - **Industry**: Packaged Food and Beverage, specifically focusing on salty snacks Key Points California Expansion - **Investment Impact**: The California expansion involves a modest upfront investment estimated at $4-$6 million in the first year, which is considered a startup cost rather than an ongoing expense [3][4][5] - **Market Size**: California represents 10% of the overall salty snack category, and the company aims to achieve a 16% margin target despite the initial investment [3][4] - **Sales Performance**: Current sales in California are $79 million, primarily through direct-to-warehouse channels, with expectations to grow as distribution expands [5][6] Metrics for Success - **Distribution Gains**: Key metrics include distribution gains, top-line growth, market share increases, and margin recovery over the next 12-24 months [8][9][10] - **Consumer Awareness**: Initial investments will focus on consumer awareness and execution in stores, with a lag expected between investment and return [8][9] Financial Performance - **Cash Flow and Leverage**: The minimal cash outlay for California will not affect the company's leverage targets, which aim to approach three times by year-end [11][12] - **CapEx Reduction**: Preliminary CapEx for 2026 is projected to be $60-$70 million, down from $100 million in previous years, with a focus on improving free cash flow [12][66] Market Share and Growth - **Outperformance**: UTZ has outperformed the salty snacks category for nine consecutive quarters, driven by maintaining market share in core areas and expanding into new markets [13][14] - **Brand Performance**: The company's "power four" brands (Utz, Boulder Canyon, Zapps, On the Border) are key drivers of growth, with successful distribution and marketing strategies [22][28] Pricing and Consumer Trends - **Pricing Strategy**: The company has experienced a modest pricing headwind of about 1%, attributed to targeted promotions and a rational pricing environment [17][18] - **Consumer Focus**: Affordability remains a key focus, with ongoing adjustments to pricing and product offerings to meet consumer demand [17][18][52][53] Innovation and Marketing - **Innovation Pipeline**: The company is focused on introducing new flavors and healthier options, leveraging existing brands to minimize investment while maximizing consumer appeal [29][30][31] - **Marketing Strategy**: Investment in marketing has increased, with a focus on both push and pull strategies to enhance brand awareness and consumer engagement [38][39][41] Operational Efficiency - **Productivity Initiatives**: The company has achieved significant productivity savings, with expectations to maintain a 3-4% improvement in COGS moving forward [54][55] - **Supply Chain Transformation**: Ongoing supply chain improvements are expected to enhance operational efficiency and support growth initiatives [62][64] Capital Allocation - **Debt Management**: The company prioritizes reducing leverage while considering share buybacks and maintaining a modest dividend [66][68] - **Growth Investments**: Future capital allocation will focus on growth opportunities, particularly in California and other expansion markets [66][70] Overall Outlook - **Future Prospects**: The company is optimistic about its growth trajectory, supported by a modernized supply chain, strong brand portfolio, and favorable market conditions [69][70] This summary encapsulates the key insights and strategic directions discussed during the UTZ Brands FY conference call, highlighting the company's focus on expansion, financial health, and market positioning within the salty snacks industry.