UTZ Brands (NYSE:UTZ) 2026 Conference Transcript

Summary of Utz Brands Conference Call Company Overview - Company: Utz Brands (NYSE:UTZ) - Industry: Savory Snacking - Market Position: Largest pure-play salty snacking company in the U.S. [7] Key Messages and Strategies 1. Growth Drivers: - Multiple top-line growth drivers expected to scale brands nationally with multi-year runways [8] - Focus on integrating and modernizing operations for growth [8] - Anticipated free cash flow inflection as capital-intensive phase concludes [9] 2. Brand Portfolio: - Power Four Brands (Utz, On The Border, Boulder Canyon, Zapp's) account for 70% of revenue [11] - Branded salty snacks represent 89% of revenue, with potato chips being the largest category at 46% [11] 3. Market Performance: - Achieved 2.4% compounded annual growth over the last three years [14] - Retail dollar share at 3% and volume share at 4.2% in expansion geographies, indicating room for growth [14] 4. Marketing and Consumer Engagement: - Marketing support increased at a 40% compounded annual growth rate over the past three years [18] - Household penetration for Utz increased to 50%, with millennials' penetration rising to 48% [19] 5. Long-term Strategy: - Aim to outgrow the category by 200-300 basis points profitably [19] - Focus on margin expansion through productivity and mix improvement [19] Financial Performance 1. Revenue and Profitability: - Adjusted gross margin improved from 28% in 2022 to 32% in 2025 [16] - Adjusted EBITDA growth at an 8% compounded annual growth rate from 2022 to 2025 [17] 2. Cash Flow Generation: - Expected adjusted free cash flow to increase to $60 million-$80 million in 2026 [56] - Targeting a reduction in leverage ratio from 3.4 times at the end of 2025 to 2.5 times long-term [57] Expansion Plans 1. Geographic Expansion: - California expansion expected to add approximately $125 million in incremental sales [34] - Expansion geographies represent 45% of retail sales, with significant growth potential [29] 2. Distribution Strategy: - Hybrid distribution model with a 50/50 split between direct store delivery and direct to warehouse [13] - DSD network serves 125,000 retail outlets weekly, with plans for optimization [50] Innovation and Product Development 1. Product Innovations: - New product lines including protein snacks and on-trend flavors [42] - Boulder Canyon brand projected to reach $500 million in sales long-term [25] 2. Marketing Initiatives: - Launch of national marketing campaigns to enhance brand awareness and consumer engagement [27] Conclusion - Utz Brands is positioned for sustained growth through strategic brand management, geographic expansion, and innovation, with a focus on improving profitability and cash flow generation [59]