Core Insights - Utz Brands, Inc. (NYSE:UTZ) is anticipated to report fiscal Q4 2025 results on February 12, 2026, with expected quarterly revenue of approximately $344.65 million and a GAAP EPS of $0.27, indicating a positive outlook from Wall Street with 73% of analysts maintaining a Buy rating [1] Group 1: Analyst Ratings - Scott Marks from Jefferies reiterated a Buy rating on Utz Brands with a price target of $15 on January 27 [2] - DA Davidson also maintained a Buy rating with a $15 price target on January 14 [2] Group 2: Preliminary Results - DA Davidson noted modest preliminary Q4 2025 results, with expected net sales between $342 million and $343 million, reflecting a year-over-year increase of 0.3% to 0.6% [4] - Adjusted EBITDA for the quarter is projected to be between $62 million and $64 million, representing a year-over-year increase of 17% to 21% [4] - Despite modest expectations, DA Davidson considers the results strong given the challenging consumer packaged goods market environment [4] Group 3: Company Overview - Utz Brands, Inc. manufactures and sells a variety of snacks under brands such as Utz, On The Border, Zapp's, and Boulder Canyon, including products like potato chips, pretzels, cheese snacks, tortilla chips, salsas, and bold-flavored kettle chips [5]

Core Insights - Palm Valley Capital Fund's performance in Q4 2025 was a 0.66% appreciation, underperforming the S&P SmallCap 600's 1.70% gain and the Morningstar Small Cap Total Return Index's 3.12% rise [1] - The Fund increased its allocation to Treasury bills from 74.1% to 76.3% during the quarter, while equity holdings rose by 1.12% [1] - Precious metals, particularly silver, significantly influenced the Fund's equity performance, which has been a major allocation for several years [1] Company Focus: Utz Brands, Inc. - Utz Brands, Inc. is a U.S.-based manufacturer of salty snacks, with a one-month return of 0.51% and a 52-week loss of 30.53% [2] - As of January 5, 2026, Utz's stock closed at $9.83 per share, with a market capitalization of $860.221 million [2] - The Fund initiated a position in Utz Brands during Q4 2025, alongside Domino's Pizza Group and Ingredion, with initial weightings being modest due to reaching minimum required discounts [3] - Utz has invested heavily in productivity and geographic expansion, averaging $100 million in capital expenditures annually over the past two years, with expectations to normalize to $60-$70 million in 2026 [3] - The company enjoys attractive margins, consistent demand, and strong free cash flow potential, with brands like Boulder Canyon chips performing well due to consumer demand for healthier snacks [3] - At the time of purchase, Utz shares traded at approximately 12 times the 2026 free cash flow estimate and offered a 2.6% dividend yield [3]

Core Insights - Utz Brands reported Q2 2025 GAAP revenue of $366.7 million, exceeding analyst expectations by $4.57 million, while Non-GAAP earnings per share were $0.17, missing estimates by $0.01 [1][2] - The company experienced a 2.9% year-over-year increase in GAAP revenue, driven by a 5.4% organic growth in branded salty snacks, which represent 88% of total sales [5][6] - Despite revenue growth, escalating costs constrained margins, leading to a significant 60.2% decline in net income compared to the previous year [2][7] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.17, down 10.5% from $0.19 in Q2 2024 [2] - Adjusted EBITDA decreased by 2.0% to $48.7 million, while adjusted gross profit margin improved to 39.8%, up 2.2 percentage points year-over-year [2][7] - Selling, distribution, and administrative costs rose to $119.5 million, representing 32.6% of sales, up from 29.4% in Q2 2024 [7] Business Strategy - The company focuses on geographic expansion and investment in its "Power Four" product families, aiming to enhance operational efficiency and distribution [4][5] - Utz's retail sales increased by 3.3% in a category that saw a 1.5% decline, indicating strong consumer demand for its branded products [6] - The company is consolidating its supply network, closing a facility in Grand Rapids, Michigan, to drive productivity savings [8] Future Outlook - Management raised the organic net sales growth forecast for FY2025 to at least 2.5%, while adjusting the adjusted EBITDA growth guidance to a range of 7% to 10% [11] - The outlook for adjusted earnings per share was lowered to 7% to 10% growth due to increased capital expenditures and rising interest expenses [11] - The company aims to reduce its net leverage ratio to around 3 times by the end of FY2025, down from 4.1 times currently [12]

Financial Data and Key Metrics Changes - EBITDA was roughly flat in the first half of the year, with a projected growth of 8.5% for the full year, implying high teens growth in the second half [6][19] - EPS guidance was revised from 10-15% growth to 7-10% growth, with a midpoint impact of about 3 cents due to increased interest expense and accelerated depreciation [19][20] Business Line Data and Key Metrics Changes - Significant growth was observed in potato chips, while tortilla chips and pretzels were below trend, with specific brands performing variably [23][26] - Boulder Canyon brand is expected to continue strong growth, with distribution gains across both core and expansion markets [71][72] Market Data and Key Metrics Changes - Distribution gains were noted across all 30 expansion geographies, with strong retailer support from national chains [33][34] - The convenience store channel is showing improvement, with expectations to reach flattish performance by year-end [65] Company Strategy and Development Direction - The company is focused on westward expansion and infrastructure investments to support distribution gains [11][35] - Marketing strategies include increased spending in retail media and social media to support geographic expansion and brand introduction [91][92] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving productivity savings and margin expansion, with a positive outlook for the second half of the year [9][56] - The company believes the category will continue to grow, driven by household penetration and repeat purchases [107][109] Other Important Information - The company is nearing the end of its manufacturing optimization efforts, with significant productivity improvements already realized [85][87] - CapEx spending is expected to peak in 2025, with a focus on automation and efficiency improvements [21][88] Q&A Session Summary Question: What gives confidence in the EBITDA growth outlook despite flat performance in the first half? - Management cited investments in infrastructure and productivity savings as key drivers for expected growth in the second half [7][9] Question: Can you clarify the changes in EPS guidance? - EPS growth was revised down due to increased interest expenses and accelerated depreciation from higher CapEx spending [19][20] Question: What is driving the strong top-line results? - The company attributed growth to distribution gains, improved volume and value share in core markets, and investments in westward expansion [10][11] Question: How is the company addressing the performance of tortilla chips and pretzels? - Management noted that tortilla chips faced promotional overlaps, while pretzel performance varied by brand, with some brands performing well [26][27] Question: What is the outlook for the convenience store channel? - The company expects the convenience store channel to improve and reach flattish performance by year-end, supported by better product assortment [65] Question: How is the company managing supply chain and manufacturing efficiency? - The company has made significant strides in optimizing manufacturing and is now focusing on automation and efficiency improvements [85][87] Question: What is the long-term outlook for category growth? - Management remains bullish on long-term category growth, citing strong household penetration and repeat purchases as positive indicators [107][109] Question: How is the company addressing consumer interest in protein products? - The company is exploring opportunities in the protein segment while ensuring that products meet consumer taste preferences [111][112]

Summary of UTZ Brands (UTZ) FY Conference Call - June 10, 2025 Industry Overview - The discussion primarily revolves around the salty snacks category, which has historically seen growth rates of 3% to 4% with a recent slowdown in price contributions due to inflationary pressures [3][4][6]. - The category is experiencing a shift in consumer behavior, with increased household penetration indicating a long-term opportunity for growth [4][5]. Core Insights and Arguments - **Growth Strategy**: The company emphasizes that it is not solely reliant on the salty snacks category for growth, indicating a diversified approach to business development [2][3]. - **Consumer Trends**: There is a notable shift in how consumers define value, with some prioritizing different oil bases or absolute price points. Growth is observed in both high-end retailers and discount stores [9][10]. - **Innovation and Marketing**: The company is focusing on marketing, innovation, and communication as key drivers for growth. New product launches, such as lemonade potato chips and Mike's Hot Honey cheese balls, are part of this strategy [10][28]. - **Competitive Landscape**: Competition remains stable, with private label products seeing a modest increase of about 1%. The company believes its marketing and innovation-led approach will continue to differentiate it in the market [12][13][16]. Financial Performance and Projections - **Sales Growth Targets**: The company reaffirms its long-term targets of 4% to 5% organic sales growth CAGR and double-digit adjusted EPS growth CAGR. For 2025, it expects low single-digit organic sales growth and 6% to 10% adjusted EBITDA growth [55][56]. - **Productivity Improvements**: The company has achieved significant productivity improvements, with a target of 6% in cost of goods sold for the current year. This is supported by operational efficiencies from consolidating distribution centers [57][59][60]. Additional Important Points - **Expansion Markets**: Approximately 44% of the business is now in expansion markets, with a focus on increasing market share and distribution gains. The company has seen growth in 25 out of 30 states tracked [41][42]. - **Marketing Investments**: The company is increasing its marketing spend to build brand awareness and drive consumer engagement, resulting in a 120 basis point increase in household penetration [48][49]. - **GLP-1 Impact**: Currently, the company has not observed significant impacts from GLP-1 medications on consumer behavior, but it remains vigilant to adapt to any emerging trends [50][51]. - **M&A Strategy**: While the company is open to M&A opportunities, it prioritizes organic growth and remains disciplined in its approach to acquisitions [64][70]. This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic focus, market dynamics, and financial outlook.