Utz Brands(US:UTZ)2025-10-30 14:30Financial Data and Key Metrics Changes - The company has maintained its expectation for EBITDA margins of around 16% in 2026, with an anticipated 100 basis points of expansion each year [23][28] - The company reported a 1% drag on pricing in the recent quarter, which was in line with expectations [42][46] Business Line Data and Key Metrics Changes - The company is seeing strong growth in its Boulder Canyon brand, which is the number one potato chip brand in the natural channel, with velocities up about 35% [80] - The On the Border brand is experiencing short-term challenges, but management believes these issues are not structural and can be addressed [76][78] Market Data and Key Metrics Changes - The company has a 1.9% market share in California, which represents a significant opportunity as the state accounts for about 10% of the salty snacks category in the U.S. [41] - Expansion markets such as Florida, Illinois, Colorado, and Missouri are averaging about 6% growth, outperforming the average expansion market share [114][115] Company Strategy and Development Direction - The company plans to make incremental investments to support its expansion into California, leveraging a proven playbook from previous market entries [26][27] - The strategy focuses on holding core markets while expanding into new geographies, with a strong emphasis on innovation and communication to drive growth [111][112] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the salty snacks category, noting that consumer participation is increasing and the pricing environment remains rational [120][121] - The company is committed to increasing marketing investments, particularly in retail media, to drive consumer engagement and support brand growth [124][125] Other Important Information - The company is addressing recent challenges related to potato supply quality, which impacted gross margins, but expects these issues to be isolated and resolved [61][66] - The company is focused on productivity improvements and supply chain optimization to enhance operational efficiency and support top-line growth [98][102] Q&A Session Summary Question: Can you elaborate on the California route acquisition and its impact? - Management indicated that the acquired network will allow for product introduction in early 2026, with confidence in driving growth through existing customer relationships [40] Question: What is the outlook for pricing and volume mix? - The company experienced a 1% drag on pricing but expects to manage this through effective revenue management strategies [46][47] Question: How does the competitive landscape affect the company? - Management views competitor innovations as a net positive for the category, as they can drive consumer interest and engagement [88][90] Question: What are the expectations for market share dynamics? - The company is seeing incremental market share gains in core markets, driven by strong relationships with retailers and effective execution [111][112] Question: What is the company's approach to innovation? - Management believes that innovation can drive category growth and is focused on simplifying ingredients and addressing consumer trends [130][133]