Utz Brands Inc Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Utz Brands Inc a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $2.06b | Revenue (TTM) = $1.45b
Market Cap = $2.06b | Estimated Revenue = $1.51b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $2.85b | Revenue (TTM) = $1.45b
Enterprise Value = $2.85b | Forward Revenue = $1.51b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Utz Brands Inc Stock Analysis
Analyst Opinions
14 Analysts have issued a Utz Brands Inc forecast:
Analyst Opinions
14 Analysts have issued a Utz Brands Inc forecast:
Utz Brands Inc Events
Past Events
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MAY
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Q1 2026 Earnings Call
6 months ago
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MAY
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Q1 2026 Earnings Call
6 months ago
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FEB
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Consumer Analyst Group of New York Conference 2026
8 months ago
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Q4 2025 Earnings Call
8 months ago
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OCT
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Q3 2025 Earnings Call
12 months ago
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StocksGuide Free
Utz Brands Inc — Q1 2026 Earnings Call
1. Management Discussion
Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Utz Brands, Inc. First Quarter 2026 Earnings Call. [Operator Instructions] I would now like to turn the call over to Trevor Martin, Senior Vice President, Head of Corporate Finance. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining us today for our live Q&A session of our first quarter 2026 earnings results. With me today on today's call are Howard Friedman, CEO; and BK Kelley, CFO. I hope everyone has had a chance to read our prepared remarks and our presentation, all of which are available on our Investor Relations website.
Before we begin our Q&A session, I just have a few administrative items to review. Please note that some of our comments today will contain forward-looking statements based on our current view of the business and that actual future results may differ materially. Please see our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance.
Today, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's earnings materials. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials posted on our website.
Now operator, we are ready to open the line for questions.
[Operator Instructions] Your first question comes from the line of Peter Galbo with Bank of America.
2. Question Answer
Howard, maybe to start, just -- you had some commentary on the second quarter in your prepared remarks kind of addressing some of the softness to start 2Q, particularly in April. So I was hoping maybe you could expand a little bit just on that point as well as whether or not you think April represents kind of the bottom within the quarter, and then we should see improvement in May and June. So maybe I'll start there and let you kind of elaborate on your commentary?
Yes. Thanks for the question, Pete. So a couple of things. Look, I think, first of all, we always expected that April was going to be sort of -- it would be a more difficult lap for a couple of reasons. Beyond sort of the Easter shift, we have year-over-year programming that we had done in the prior year. Specifically, you see it on Boulder Canyon, and you can see it on the cheese business. We also had some laps in some larger customers where there's some merchandising timing that actually shifted.
So as you look at the year-over-year, we expected the quarter to start out a little bit softer than the run rate had been. I think if you look at the food channel overall, 50% of our business, I think it's a pretty good indicator of our underlying strength, which continues to be positive. And as we progress through the second quarter, you'll actually see some incremental activations coming. Boulder Canyon has some activity behind Tallow. You'll see new product innovations start to hit. And obviously, California will continue to grow. So I think we're off to where we expected to be in the second quarter and largely through the -- through Q1 as well.
Great. And BK, just maybe as a follow-up, you left the guidance unchanged for the year, actually reiterated all elements of it. I think there was a bit of concern out there in the market that just given maybe less of a scaled DSD platform, things like freight, resins might hit you a bit sooner. So maybe you could just talk a little bit about the hedging program and kind of how you're locked on freight and go forward for the rest of the year.
Yes. Thanks, Pete. Thanks for the question. So first of all, I would say we're covered for most of the year on fuel, ags and freight. Our productivity program that we've touted a bit here at approximately 4% is going well, and we'll continue to build on those plans in H2. And that will help us offset any incremental inflation, which we think comes from primarily a small impact from fuel for us, but mostly packaging driven by the resin impact.
We'll continue to maximize the other levers that we have, the RGM tools around price pack architecture, and we'll be using AI to improve our promo effectiveness, and we'll continue to improve our sales mix. The net impact for us is that we have many levers to address potential inflation, but we are mostly covered on the fuel, ags and freight pieces to your point.
Your next question comes from the line of Michael Lavery with Piper Sandler.
This is Luke on for Michael. I just wanted to ask on marketing spend. You increased marketing spend by 35% in the first quarter, and I believe your long-term target is for 3% to 4% of sales. How close do you get to that target this year and in 2027? And then also, where do you see the biggest opportunities for return on marketing spend?
Thanks for the question. Look, I think what we've said, we're largely in line with what we would have expected on the marketing investment for the year. We will expect to add [indiscernible] about 40% year-over-year, and we continue to have conviction that, that's the right place to be. We're still many -- probably a couple of years out from being able to get to that 3% to 4% longer-term target because as you can imagine, when we start to think about the available resources we have and the opportunities we have to grow, whether it's with westward expansion, continue to drive capabilities as well as marketing and innovation, there is a reasonable competition for those dollars.
I would tell you that we feel great about the innovation this year, and I think it's probably the strongest lineup we've certainly had in the -- in my time here. I think in terms of where we see ongoing investment, I think there are a couple of places. One is obviously supporting our Power Four Brands, Utz, Boulder Canyon, Zapp's and On The Border. Boulder Canyon has new advertising that will be out this year to support the momentum on that brand, which continues to grow very quickly.
Second is in our expansion markets where we're introducing the brand. In California, we'll obviously get investment as we continue to scale that area. And then the last is in supporting our core where it's a little bit more traditional competitive dynamics for us within the category. So I think over time, you'll continue to see us grow our advertising and consumer spend, and we'll remain focused and disciplined on how we deploy those resources.
Okay. That's great. And your household penetration increased just over 1 point. What's working there? And what opportunities are ahead?
Yes. So look, I think part of our household -- we feel very good about the household penetration trend we've been on. I think equally important to us is that the loyalty rates continue to grow because, obviously, as you grow penetration, you're introducing yourself to newer users, and they may not repeat quite as much. And what we're seeing is very strong loyalty rates as well, which I think is a testament to the quality of our products and the variety of items that we offer.
I think that the major drivers, again, are going to be -- partially it's going to be about expansion geographies which obviously, for the Utz brand is as we're moving westward and for the remaining Power of Three, it's also bringing it into Utz's core geography. So we're introducing new households in both places. Second, our innovation is introducing products into households that they may not have had before. We feel very good about the early start on Tallow. And then lastly is just driving incremental advertising, which is also doing a good job of being both effective and efficient, but also driving our brand story. So I think we're kind of hitting on most of the cylinders right now and lots left to do.
Your next question comes from the line of Scott Marks with Jefferies.
First thing I wanted to ask about in the prepared remarks, you made a comment about not seeing any need to change commercial plans because of competitor activity. Wondering if you can expand on that a little bit and just help us understand what you're seeing out there from a competitive perspective and how some of the recent changes within the category may or may not have impacted your own business.
Yes. Thanks for the question, Scott. Look, I think overall, we feel like we're where we expected to be at this point in the year and that our commercial plans are holding. And a lot of the innovation expansion and investment in marketing consumer, I think, is going to deliver on the goals that we've had for the year. I think with respect to what we're seeing competitively, I'd tell you what we've observed is, obviously, the Bell-Mark prices or the on-pack price has come down, and we have seen some sharper promotional price points with some customers in some of the subcats.
And this isn't wildly different than what we had seen in Q4 as we were going through the -- observing the early testing. And we do believe that at this point, it will continue to be a targeted and focused activity from the competition. From our perspective, we feel pretty good. I think if you look at the first 2 major merchandising windows of the year, Super Bowl and Easter, we were able to take dollar share. We grew our distribution 7% on TDPs, and we increased marketing to, as we said, to 35%, while also being mindful of where our price gaps need to be to remain competitive.
So I think we feel confident in our drivers for the year. I think we feel confident that California will continue to build and that we've invested in our revenue management capabilities to make sure that we are able to compete. And the nice thing about our company is we can be fairly agile and with productivity giving us more resources potentially to deploy it if we had to, we feel like we can compete in a variety of contexts.
Appreciate the thoughts there. And then just a follow-up for me. A lot of comments in today's remarks about the bonus bags. Hate to bring up the term again, but obviously, it's in there. You obviously helped us -- give us a little bit of context in terms of what the numbers look like, excluding the Bonus Packs. Wondering if you can break that down between core markets versus expansion markets. What would the impact have been if we exclude the bonus bags just in terms of price versus volume and kind of where that growth has come from?
Yes. So a couple of things. I think -- I know we haven't broken it out between core and expansion geographies. It's kind of more difficult for us to do just given the nature of the fact that bonus bags were actually the same UPC. So we have to do quite some additional work to be able to offer that. I think what you can take [indiscernible] is that bonus bags broadly were mostly in the core geography because that's where the majority of our distribution is with respect to things like Utz and On The Border, which is where it was. But we tried to give you a perspective of on a 2-year basis, we're holding up quite well competitively and that both volume mix and price are being similar contributors to our overall growth rate, which is I think really kind of the point we wanted to make sure we got across.
Your next question comes from the line of Rob Dickerson with BTIG.
Yes, just a quick question on the category. I realize you're using retail dollars in the quarter, category is not flat, right? It was up, I think, over 2% based off of what you spoke to, the guidance that you've been talking for a while of kind of expecting kind of flat for the year. Is it just kind of -- obviously, the market is very dynamic right now, kind of we're still in the early or at least first half of the year. So there's no need to say, oh, we actually think the category could be more than flat this year and maybe we'll be in line with the category. I'm just trying to gauge a sense of kind of where your head is right now sitting in early May with respect to the category and maybe its potential for the year and then kind of how you could maybe operate vis-a-vis that category growth?
Yes. I think -- first, I think when you think about the beginning of the year, we have continued to project a more flattish category, just given how early it has been in the year, and there is a very -- it's certainly been noisy in the first 3, 4 months of the year. So I think at this point, we're just continuing to take a conservative view on the category. I think what we would expect is that as the year continues and as the category sort of starts to demonstrate more consistency, then we would -- we'll relook at that, look at our assumptions.
But from our perspective, obviously, we've never been solely dependent on the category for our growth. The expansion geographies remain a significant area of white space for us and our increases in innovation in A&C, we believe, puts us in a position to make sure that we are delivering against the guidance that we've provided as we go forward. And obviously, if the category continues to improve, then we'll take a different decision as we continue to navigate the year.
All right. Super. And then I guess just on the innovation front, I think you mentioned you were saying like Beef Tallow going for $20 on auction. And then I know you have flavored tortillas coming and Utz Protein, some Utz Protein SKUs. There are a few other competitors that might have some healthier options coming in as well. But just as we think about kind of consumer reengagement, right, in the category like Boulder is clearly doing very well, engaging well with the consumer.
Again, kind of coming back, I guess, to Utz, but then also to the category, it just feels like there's clearly action in motion that would support kind of category improvement potentially as we get through the year, but especially just within consumer reengagement. I don't know if that makes sense. Just to hear your comments.
Yes, it does. Look, we think that there are kind of 3 areas where consumer engagement really kind of matters to us. I think the first, to your point, is around better-for-you, and we're certainly seeing many people entering into the better-for-you category, larger scale competitors and smaller guys. We feel really good about Boulder Canyon's ability to compete. Tallow has gotten off to a great start. It was a new one for me to go on to an auction site and see the product there, but really around better-for-you attributes and non-seed oil and that business continues to grow in both the Natural and conventional channels.
I think we've also seen that it's actually able to stretch with, to your point, both unflavored and now flavored tortilla chips, which we feel very good about the authorizations and early consumption trends on that business is strong. I think Protein in Utz is introducing that brand into what we call an elevated performance, not necessarily all the way to the Boulder Canyon side, but the presence of positives, we think, is a big territory for consumers who are looking to incorporate more protein in, and we'll continue to try and work on the better-for-you attributes across.
We have Snacking Made Simple on our Utz brand is our sort of our organizing idea, which highlights the simple ingredients that are in our core products. The next 2 areas really are around flavor and value. And those 2 areas also are places where I think consumers have always engaged in this category and we will continue to do so as we go forward. So I do think you're going to see more effort by everybody to continue to introduce presence of positives. I think it's a consumer trend, but I also think flavor and value you'll also see.
All right. And then just maybe a quick one for me, too, for BK. Just on the free cash flow front, is there kind of anything to call out as we get -- as we're now in early May, for the year. And I'm really just kind of speaking to that expected kind of sequential improvement in free cash flow this year and then kind of that ability to hit that larger target longer term. That's all.
Yes. I think the -- thanks for the question. Our confirmation of our guidance included the $60 million to $80 million of free cash flow that we were chasing this year. The Q1 for us is always going to be a quarter where we burn cash as we build for the seasons. I think the improvement in our leverage year-on-year is something that is indicative of the improvement we're making in our processes and capabilities in this area. We continue to think that, that will build over the year, and we'll be on track for the free cash flow that we expect to generate as well as the leverage targets that we set.
[Operator Instructions] Your next question comes from the line of Jim Salera with Stephens.
I wanted to circle back on the pricing actions you mentioned by large competitors and kind of the limited impact on the commercial plan. From some of the work that we've done, it seems like those pricing actions are most pronounced in mass, particularly the largest mass retailer. I wonder if you could share how you're thinking about your pricing maybe on a kind of channel basis relative to peers and if we should see maybe a more strategic opportunity for you to differentiate yourself in channels outside of mass?
Yes. Thanks for the question. Certainly, we've seen similar performance in the mass channel, which is not that much of a surprise to us. I think you've seen that -- we've seen that historically, which kind of goes back to the original point of the nothing that we're doing -- we've seen so far has been all of that surprising to us. And if you think about how our commercial strategy kind of unfolds, we have got a wide range of competitive dynamics across the price ladder.
So we continue to grow very nicely in the Natural channel. We've been making good progress in Club behind some of our premium brands, notably Boulder. Our expansion geographies and frankly, the food channel overall continues to perform for us with the larger national grocers as well as the regional players. And so we will compete there. Obviously, our [ rev man ] capability really comes through in the food channel because that's where promotional effectiveness and timing can really kick in.
And then I think more broadly, as you think about sort of the rest -- the remainder of the mass channel, we are feeling very good about the performance of our business there. We've seen distribution gains. So overall, we are -- it is a subcat by subcat, channel-by-channel game for us. And that's -- again, I think we have a lot of different ways to get to our goals and our objectives. And I think that's kind of what you're seeing in the first quarter.
Great. And then if I could shift gears and ask a quick one on California. You mentioned in your prepared remarks, California was up high single digits. It might be too early, but I want to ask if -- do you have any sense for the repeat rates in California given your brand is going to be new to a lot of folks out there. Curious to see kind of the initial loyalty response.
Yes. It's early for us to see. We have to get through a couple of purchase cycles before we really be able to give you a better sense of loyalty. What I can tell you is if you look at our overall marketing metrics nationally, which, of course, our expansion geographies are a significant portion of our growth, you continue to see loyalty and repeat rates actually fairly consistent across. So I think that, that gives us quite a bit of confidence that even with a lower relative brand awareness on a brand like Utz that the product once in consumers' hands and pantries will have -- will earn its right to stay there.
I think beyond that, remember that Boulder Canyon and Hawaiian are also brands that exist in that marketplace today. And so that -- it's also the opportunity for us to expand distribution of those items, which are more familiar to the California market. So it will be a full suite of our Power Four Brands and some of our targeted brands as we kind of mature that geography over time. But like I said, high single digits, a couple of weeks in, call it, 5, 6 weeks into it, we feel pretty good about where we are in California, lots to do, but we're excited about it.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Utz Brands Inc — Q1 2026 Earnings Call
Utz Brands Inc — Q1 2026 Earnings Call
1. Management Discussion
Good morning, and thank you for joining us today for our prerecorded discussion of our first quarter 2026 earnings results. Joining me on the call today are Howard Friedman, CEO; and B.K. Kelley, EVP and CFO. In addition, this morning at 8:30 a.m. Eastern Time, we will host a live question-and-answer session, which you can access via webcast on our Investor Relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business, and actual future results may differ materially.
Please see the forward-looking statement disclaimer in the earnings materials and our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. Today, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's earnings materials.
Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our Investor Relations website. Finally, the company has also posted presentation slides and additional supplemental financial information on our Investor Relations website. And now I'd like to turn the call over to Howard.
Good morning, everyone, and thank you, Trevor. I'll kick off today's call with our first quarter business update, after which BK will provide detailed financial commentary. Before we get started, I would like to thank all of our hard-working associates across the company for their continued dedication to us.
In February, we presented at the CAGNY conference in Orlando and described our key strategies: outgrow the category profitably, expand margins and accelerate free cash flow. Supporting everything we do is deploying leading capabilities to build a best-in-class organization. I'm proud to say we delivered on each of these strategies in the first quarter. First, outgrow the category profitably.
Our top line performance was solid this quarter with net sales growth of 2.6%, led by Branded Salty Snacks organic net sales of 5.2%. Note that as there were no acquisitions nor divestitures impacting the first quarter, organic net sales growth is equal to reported net sales growth. We were encouraged to see the improvement in both metrics versus the fourth quarter of 2025.
Retail inventory levels have largely normalized and our Branded Salty Snacks organic net sales growth of 5.2% was modestly ahead of first quarter retail sales growth of 4.6%. The category continues to show signs of improvement with first quarter gross retail sales growth of 2.4%. We gained dollar share in the category despite the volume share impacts from lapping bonus packs in the first quarter of last year.
Second, expand margins. While BK will cover the financials in more detail later, we were pleased with strong year-over-year first quarter adjusted gross profit margin expansion of 210 basis points and adjusted EBITDA margin expansion of 50 basis points. We continue to reinvest in the business with significant increases in marketing and capabilities to drive geographic expansion.
Third, accelerate free cash flow. This is a new strategic pillar for us, and we are off to a good start in 2026. Adjusted free cash flow improved by approximately $32 million year-over-year, and we reduced leverage by 0.4 turns from the first quarter of 2025 to 3.6x. This represents our lowest first quarter leverage ratio since becoming a public company. BK will also go into more detail on cash flow metrics and our reiterated 2026 guidance later.
Before I cover more details on our first quarter top line performance and retail sales performance, I would like to offer some comments on the category, competitive environment and the second quarter-to-date trends we are seeing. First, our performance in the first quarter, inclusive of key selling windows such as Super Bowl and Easter, gives us confidence that pricing actions and significant resets undertaken by large competitors will not require major changes to our commercial plans.
We will continue to be agile and prudent as the year continues. We believe we have consistently maintained appropriate price gaps through combinations of shelf and promotional prices and have the flexibility within our plans to adjust as necessary. Recall, we did not follow the industry on the latest rounds of price increases, leaving ourselves some more flexibility in our price gaps. Second, we were able to achieve modest net price realization in the first quarter, excluding the impact of last year's Bonus Packs, through some targeted pricing and significant improvement in our revenue growth management tools, which is improving the efficiency of our promotional prices. We will continue to strive for a balanced approach to net price versus volume mix.
Third, as I mentioned at CAGNY, we have exciting plans for later this year with brands that explicitly address value and consumer affordability. Fourth, we continue to believe that marketing and on-trend innovation are the key drivers of the Salty Snack category, and we are seeing strong traction from our significantly increased marketing spending and new product introductions that I will discuss more later. And finally, fifth, we continue to drive strong distribution and shelf gains with TDPs up more than 7% in the first quarter, driven not only by our expansion geographies, but also our core geographies.
In summary, our strategy remains primarily to attract new households to our brands through geographic expansion, innovation and marketing versus a more aggressive promotional strategy. On the promotional front, we will remain fully competitive while staying rational and managing our price gaps prudently. As it relates to the second quarter to date retail trends, performance is largely in line with our own expectations so far.
Consumption data has exhibited more volatility during the recent weekly periods as we continue to lap Bonus Packs in April, the Easter shift and merchandising events in select large retailers in the year ago periods. Our quarter-to-date retail sales growth of low single digits in food, our largest channel at 50% of sales, gives us confidence in the underlying strength of our business.
As it relates to Boulder Canyon, growth rates are as expected versus the prior year periods. Boulder grew 101% in tracked channels during the first quarter and is up about 45% quarter-to-date in the second quarter as measured by Circana MULO with convenience, cycling significant launch activity in the club channel from prior year. We would expect Boulder to reaccelerate somewhat from current second quarter trends as new distribution continues to build and our innovation continues to roll out across channels.
We are excited by our plans for the rest of the quarter and the year across our entire branded portfolio, including significant innovation and increased merchandising. Organic net sales growth of 2.6% in the first quarter was driven by pricing of 3.7%, partially offset by a volume/mix decline of 1.1%. Importantly, lapping Bonus Packs from the first quarter of prior year had a [ 2.7 point ] positive impact on price and a [ 2.7 point ] negative impact on volumes. Excluding Bonus Packs, Volume/Mix increased 1.6% and net price increased 1%. From a portfolio perspective, Branded Salty Snacks posted strong organic net sales growth of 5.2%.
This marks our ninth consecutive quarter of organic growth in Branded Salty Snacks and an improved mix as our Branded Salty Snacks portfolio now represents 89% of our total net sales. Since the first quarter of 2023, Branded Salty Snacks Mix has increased by 10 percentage points from 79% of our net sales to 89%. We continue to emphasize our Branded Salty Snacks portfolio, which is higher margin and higher visibility and benefits from our marketing and innovation plans. Our Non-Branded/Non-Salty portfolio net sales declined 14.3%, driven primarily by Non-Branded due to declines in partner brands.
We further accelerated plans to eliminate lower-margin items in this portfolio. While our more targeted portfolio rationalization efforts had a 230 basis point impact on first quarter Non-Branded/Non-Salty sales and were a 60 basis point headwind to total first quarter net sales, we believe emphasizing our own portfolio of branded products is the right long-term business strategy.
These actions in our Non-Branded Salty portfolio should have no impact on our full year revenue guidance given the stronger performance from our Branded Salty Snacks portfolio. Shifting to retail sales performance. We gained dollar share in the Salty Snacks category for the 13-week period ended March 29, 2026, as measured by Circana MULO with convenience. We believe that Circana MULO plus convenience captures approximately 85% of our reported branded Salty Snacks Organic Net Sales. As we mentioned, Branded Salty Snacks Organic Net Sales grew 5.2% in the first quarter.
Retail sales of 4.6% was driven by a 7.9% increase in price, partially offset by a 3% decline in volumes. This performance was ahead of the category growth of 2.4%. On a 2-year stack basis, which we believe normalizes the impact of our year ago Bonus Packs, retail sales also increased 4.6%, significantly ahead of the category 2-year stack of 0.7%. Our 2-year stack results were balanced with volume up 2.7% and price up 2.5%. Our performance was again driven by the momentum of our Power Four Brands. Our strong consumption results reflected sustained momentum of Boulder Canyon and strong gains in expansion geographies. Our Power Four Brands increased 6.7% in retail sales dollars, driven by 9.2% of price, partially offset by volume declines of 2.3%.
Once again, the first quarter volume performance at Circana was impacted by the Bonus Packs lap from prior year. Now turning to our core geographies, where our share performance improved notably from the fourth quarter of 2025, and we gained dollar share in our Power Four Brands. Total company retail sales dollars in core geographies increased 2.7%, with Power Four Brands leading at 4.8% versus the total Salty category up 3%.
Total company retail volume decreased by 4.8%, while Power Four Brands decreased 3.9%. While Boulder Canyon was the leading growth driver in core markets, we also saw dollar share growth in Golden Flake Pork Rinds & Utz Pretzels. Momentum in our expansion geographies continued this quarter with the total company and our Power Four Brands both capturing dollar share. We achieved strong total company retail sales growth of 6.5%, which significantly outpaced the Salty Snack category growth of 2.1% in these markets, driven by ongoing distribution gains. Brands contributing to our growth in expansion markets included Utz Cheese and Pretzels, Boulder Canyon and Golden Flake Pork Rinds. We believe the growth runway remains substantial as our average market share of 3.1% in our expansion geographies versus 6.6% in our core markets illustrates the opportunity we see ahead.
As we previewed in our CAGNY presentation, we've introduced 2 growth stages of expansion geographies, initial expansion and recent expansion. In the first quarter, our initial expansion geographies continued to experience strong retail sales growth of 4.3%, whereas our recent expansion geographies grew double digits at 10.1%.
Our California expansion initiative launched in late February, and we will continue to build new distribution in the market as we progress through 2026. California exhibited high single-digit year-over-year retail sales growth in the first quarter. Our Boulder Canyon brand continues to outperform and gain share both in the natural and conventional channels with growth of 19% and 101% in the first quarter, respectively. We believe consumers are connecting with the brand and are appreciating its better-for-you attributes and great taste. We also believe Boulder Canyon's innovation is gaining significant traction and the items per store opportunity remains another clear growth driver.
Boulder Canyon Beef Tallow launched in the Club Channel and quickly sold out with bags confirmed to be selling on auction platforms for over $20. We have accelerated our plans to expand Tallow even further in 2026 and believe this product line can be highly incremental for the Boulder Canyon brand. Boulder's other 2026 innovation launch, flavored Tortillas, has also exceeded our expectations.
The line of 4 SKUs launched in the Natural Channel with strong results, and we also plan to accelerate our rollout of these items as well to other retailers later in 2026. As we previewed at CAGNY, we are excited to launch Utz Protein in the second quarter with 4 Pretzel SKUs and 2 Cheese SKUs. This product is currently in market at select retailers with plans to roll out more fully by the end of the second quarter. On the marketing front, we increased investment year-over-year in the first quarter with marketing spending up 35% versus prior year. We believe our household penetration statistics continue to support our investment in a more meaningful share of voice. For the 52-week period ended March 22, 2026, versus the comparable prior year period, our household penetration has increased 1.1 points to 50.2%. Buyers have increased by 1.9 million to 65.8 million, and buyer repeat rates increased by 0.6 points to 70%.
Our first quarter performance underscores our commitment to delivering on our key strategies: first, outgrow the category profitably, driven by our Power Four Brands and geographic expansion; second, drive margin expansion through productivity and reinvest strategically in marketing and growth. Third, accelerate free cash flow conversion. All of these outcomes are made possible by our capabilities and our associates, and I'm proud of our progress. With that, I'll turn it over to BK, who will walk you through our financial results and guidance in more detail.
Thank you, Howard, and good morning, everyone. In the first quarter, our net sales increase of 2.6% was led by price of 3.7%. This was partially offset by lower Volume/Mix of 1.1%, which reflects a 2.7 point impact on both price and Volume/Mix from Bonus Packs in prior year. The Bonus Packs impact was in line with our expectations in the first quarter. Excluding Bonus Packs, Volume/Mix increased 1.6% and price increased 1%. We were pleased to deliver Branded Salty Snacks Organic Net Sales growth of 5.2%, led by price growth of 4.1%.
Organic Net Sales in our Non-Branded & Non-Salty Snacks declined 14.3%, primarily driven by our Partner Brands portfolio. As Howard mentioned, we continue to emphasize our Branded Salty Snacks business and further accelerate elimination of low-margin items in our Non-Branded portfolio during the first quarter. We delivered strong margin performance with adjusted EBITDA up 6.2% and adjusted gross profit margin expansion of 210 basis points.
Our productivity initiatives drove these gains, allowing us to offset supply chain cost inflation and fund our continued marketing and SG&A investments. Adjusted EBITDA margin expanded by 50 basis points to 13.3%. Productivity savings contributed 420 basis points to adjusted EBITDA margin expansion, volume mix contributed 20 basis points and price contributed 100 bps. This was partially offset by 350 basis points of increased supply chain costs and inflation, 50 basis points of higher marketing spend and 90 basis points of selling and administrative expenses. Adjusted SG&A expense increased 13.2% versus the prior year quarter or 170 basis points as a percentage of net sales.
This increase was largely driven by planned investments in marketing, selling and capabilities. Note that our planned investments in California expansion are present in both supply chain costs and SG&A and the phasing is as expected. Adjusted net income decreased 4.5%, driven primarily by expected increases in depreciation and amortization. Total D&A increased by $3.8 million to $22.5 million, reflecting recent additions of property and equipment related to our supply chain transformation.
Adjusted EPS declined 6.3%, consistent with our expectations. Our more transformational supply chain consolidation initiatives are winding down as expected, with CapEx in the first quarter normalizing considerably year-over-year and cash transformation costs in the quarter declining substantially from the second half of 2025. We have revised the titles and groupings for our non-GAAP adjustments in the first quarter to more clearly present our supply chain and corporate transformation costs with prior periods presented with the current presentation. We continue to expect $30 million to $35 million of total supply chain and corporate transformation costs in 2026, with continued sequential reductions in both supply chain and corporate transformation costs as we progress through the year. We remain on track to deliver on our productivity target of approximately 4% of adjusted COGS for 2026 as our supply chain investments continue to generate meaningful productivity.
Turning to cash flow and the balance sheet. Cash used by operations for the 13 weeks ended March 29, 2026, was $12.2 million, an improvement from prior year as we continue to focus on working capital efficiency. Capital expenditures in the first quarter were $13.8 million, a substantial decline of $25 million versus prior year first quarter. In the first quarter, we also paid $9.7 million in dividends and distributions to shareholders. We did not repurchase any shares in the first quarter and $50 million remains on the authorization. Adjusted free cash flow, which is defined as cash flow from operations less CapEx and plus net proceeds from sales of property and equipment, was negative $25.9 million in the quarter. Adjusted free cash flow improved $32.3 million versus prior year, reflecting our sharpened focus on cash metrics. Net proceeds from sale of property and equipment were $100,000 in the quarter. Regarding the balance sheet, cash on hand was $73.7 million. Liquidity, including access to our revolver, remained strong at $196.1 million, giving us ample financial flexibility.
Net debt at quarter end was $780.3 million, and our net leverage ratio was 3.6x trailing 12-month adjusted EBITDA of $219.3 million. As expected, our first quarter leverage increased modestly from the fourth quarter of 2025 given seasonal working capital build, but improved 0.4 turns versus prior year first quarter.
We continue to expect first quarter to be the peak of leverage for the year, and our leverage ratio should improve as we progress through 2026. Now turning to our outlook. Today, we are reaffirming all aspects of our 2026 outlook that we discussed on our fourth quarter earnings call in February. We continue to expect organic net sales growth of 2% to 3%, which assumes a flat category. While the category is up 2.4% in the first quarter, the consumer environment remains uncertain and comparisons become more difficult in the back half. We believe it is prudent to see more of the year before revisiting our category view. Our confidence in the branded salty snacks portfolio is strengthening as our innovation gains traction, California expansion ramps, and we continue to reinvest in marketing. As it relates to our Non-Branded/Non-Salty portfolio, we would expect modestly improving rates of decline as we progress through the remainder of the year and lap some of the portfolio rationalization initiatives from the second half of last year.
I would also like to make some comments on the recent increase in energy prices. We believe we can manage through this pressure in 2026 and are confident in our guidance range. First, we are largely covered on fuel costs for the remainder of the year due to our hedging and risk management programs. Second, our freight is approximately 85% contracted with only modest spot market exposure.
We import less than 10% of our raw materials, which means relatively minor exposure to ocean freight. Third, delivery and logistics costs are also core to our productivity program, and we have several initiatives underway as part of our normal continuous improvement efforts, including actively shifting freight to intermodal. Fourth, we are working proactively with our IO partners to ensure we maintain service levels as they face higher fuel costs. Helping IO to drive growth and targeted incentives remain the most effective tools to contend with periods of higher costs. And finally, fifth, we are nearly fully covered on agricultural commodities through the end of 2026.
Although we expect to have some pockets of inflation to manage through in the second half, including some packaging, we believe that our productivity programs and other mitigation efforts should allow us to offset this incremental inflation. This view assumes commodity prices generally in line with today's market. If higher energy costs persist beyond 2026, we believe we have ample flexibility in our model to address this given our robust productivity programs, ability to leverage our recent SG&A investments, continued growth opportunities across our portfolio and enhanced revenue growth management capabilities.
We believe this provides us with several levers to contend with any inflation that proves to be more structural. We are reiterating our adjusted EBITDA guidance of 5% to 8% growth and our adjusted EPS guidance of a 3% to 6% decline. As a reminder, both these metrics include the benefit of the 53rd week. We are also reiterating our adjusted free cash flow guidance of $60 million to $80 million. We continue to expect an effective normalized tax rate of between 17% to 19%, interest expense of $47 million to $49 million and depreciation and amortization of $93 million to $97 million. We continue to expect capital expenditures to be $60 million to $65 million, with the majority focused on delivering accelerated productivity savings. Net leverage ratio is expected to be between 3x and 3.2x at year-end 2026. With that, I'll turn it back to Howard for closing remarks.
Thank you, BK. I'm proud of our first quarter results and our ability to execute our key strategies. We outgrew the Salty Snack category on a dollar basis with our Branded Salty Snacks portfolio demonstrating continued strong growth. We expanded adjusted gross profit and adjusted EBITDA margins as our productivity initiatives continue to generate meaningful cost savings and allow for strategic reinvestment. We accelerated free cash flow conversion with a significant year-over-year improvement in adjusted free cash flow and leverage ratio. This is all made possible by the capabilities we have built and deployed during the past several years. On behalf of everyone at Utz, I want to thank you for your ongoing confidence in our teams as we continue bringing our beloved snacks to new markets and new consumers nationwide.
Utz Brands Inc — Q1 2026 Earnings Call
Utz Brands Inc — Consumer Analyst Group of New York Conference 2026
1. Question Answer
Good afternoon, everyone. Let's welcome Utz Brands to the CAGNY stage for the very first time. And before we get started, please join me in thanking the company for their generous sponsorship, both for that awesome break outside and for the extra drops of tasty snacks throughout the week. Thank you, guys.
Utz offers a robust savory snacking portfolio, including its namesake brand as well as Boulder Canyon, On The Border, Zapp's, among others. Over the past few years, the company has delivered consistent top line growth despite a tough overall snacking environment while also driving significant productivity across its supply chain. As we turn and look ahead to this year, Utz is looking to build further on that commercial momentum as well as driving a meaningful free cash flow inflection.
Presenting today, we have CEO, Howard Friedman; and CFO, BK Kelley. Let's welcome the team. And again, thank you for the generous sponsorship.
With that, I'll hand it over to Howard.
Thank you all. Again, I'm Howard Friedman, CEO of Utz, and we're glad to be at CAGNY for the first time since going public. And we're excited to introduce to you the company and lay out our strategy. Before we start, I'll just remind you that our remarks today include forward-looking statements, and I'll give you a second to look them over.
With me today is BK. Kelley, our CFO, who joined our company about a year ago with extensive background in CPG.
Let me start with some key messages and why to consider Utz. Despite being a smaller capitalization company, Utz is the largest pure-play salty snacking company in the country. Our video ended with a nod to our 100-year history and our potential, and we're leveraging this history and our strong portfolio of brands for our next phase of growth. We have multiple top line growth drivers to scale these brands nationally and expect that several of these differentiated growth drivers have multiyear runways. Since joining Utson as CEO at the end of 2022, our focus has really been on integrating and modernizing the company for this next phase of growth. We built a strong operational foundation and have more margin potential in the years ahead.
Importantly, we plan to deliver accelerated cash generation to delever as we exit the more capital-intensive stage of the last 2 years. While the Utz brand started over 100 years ago in 1921, the company you see today was really built through a number of acquisitions over the last 25 years, including 3 of our Power Four brands, Zapp's, Boulder Canyon and On the Border. In 2020, we became a public company.
Beginning in 2024, we embarked on our supply chain transformation, where we divested several plants and modernized the remaining plants, creating a more efficient and capable network. This multiyear project is winding down as we enter 2026. And in just a few weeks, we begin our expansion in California. We'll talk more about this multiyear growth initiative later in the presentation. Our long history of strategic acquisitions and successful integrations have created an approximately $1.4 billion revenue business today with significant growth potential.
Turning to our brand portfolio. Our Power Four brands, Utz, On The Border, Boulder Canyon and Zapp's comprise 70% of our portfolio with Utz being our largest brand and Boulder Canyon, our fastest growing. Branded salty snacks represent 89% of our revenue at the end of 2025, and we will continue to shift this mix. The remaining 11% of our portfolio is partner brands, which we distribute for other companies and our non-salty business, which is mostly branded dips and salsa. Our brands compete in nearly all salty snack subcategories with potato chips being 46% of our sales, followed by tortilla chips at 17% and pretzels at 11%.
Importantly, we aim to gain share in all the subcategories in which we compete. We have a well-defined brand portfolio architecture, which prioritizes the growth of our Power Four and allows us to focus our marketing and innovation resources accordingly. We also leverage targeted growth opportunities with our regional and subcategory-specific brands. Golden Flake in the Prok Rinds subcategory is a good example. We also have the Hawaiian brand primarily on the West Coast, which has significant potential as we build our distribution capabilities Westward.
Lastly, there are a small group of regional brands that we manage for consistent revenue and cash flow. Importantly, we have been and continue to be active managers of our brand portfolio over time with both acquisitions and divestitures. In salty snacking, strong retail distribution and shelf presence is a key competitive advantage, and we have found it strategically important to service our customers through multiple distribution methods. We use what we call a hybrid distribution model with about 50-50 split between direct store delivery or DSD and our direct to warehouse.
We also have some geographies where we partner with larger distributors, especially early on when we're building scale. Importantly, we believe that DSD gives us an advantage in salty snacks given the breadth of the subcategories in which we compete. This hybrid distribution model enables us to achieve broad retail channel coverage. Our largest channel is food at about 50% of our sales, and we have had success broadening our distribution to faster-growing channels, such as club, which now nearly comprises 10% of our sales.
Over the past few years, we've built a strong foundation of consistent organic top line growth faster than the category by holding share in our core geographies, the Mid-Atlantic and Northeast and gaining share in our expansion geographies across the rest of the country. This strategy delivered 2.4% compounded annual growth over the last 3 years. Over this period, importantly, we've been able to hold our volume share of 8.2% in our core as we invested to maintain value for consumers.
Our expansion geographies have gained almost 0.5 point of both dollar and pound share since 2022, but with our retail dollar share at only 3% and our volume share at 4.2%, we have a lot more share to gain. This concept of hold the core and grow and expansion is central to our strategy, which we will continue to cover in much greater depth. Our strategy has been to focus on and grow our branded salty snacks and deemphasize our non-branded and non-salty business.
Since Q1 of 2023, we have shifted our branded salty business from 82% of our sales to 89% by the end of last year. With the revenue and margin significantly higher on branded versus non-branded, this shift continues to drive mix improvement. Our focus has driven strong branded net sales growth quarter after quarter, even in the most recent quarter when we experienced some destocking from the SNAP payment delays and the government shutdown.
As I've said in my opening remarks, we've built a strong foundation of operating efficiency over the past several years. Our productivity program plays an important part in both funding our growth and expanding our margins. In 2022, our productivity savings was 3% of adjusted cost of goods sold and has consistently grown to an exceptional 7% in 2025. This productivity, our mix improvement and our growth has driven our adjusted gross margin from 28% in 2022 to 32% last year. Our EBITDA margin has improved 300 basis points as some of our gross margin improvement was reinvested back into marketing and capabilities to drive future top line growth. Importantly, we believe there is significant room for more margin improvement over time.
With our focus on organic revenue growth and productivity, we've been able to generate relatively consistent high single-digit adjusted EBITDA growth year after year with an overall 8% compounded annual growth rate from 2022 to 2025. Accelerating and improving our marketing support has been a significant area of reinvestment, increasing at a 40% compounded annual growth rate over the past 3 years. We plan to increase marketing at a similar rate in 2026. Our marketing efforts are impactful with high ROIs and are driving strong awareness and increasing purchase intent of our Power Four brands.
As I like to say, our marketing needs to drive sales overnight and brands over time. Our marketing efforts have been very successful in growing our household penetration with total Utz penetration up over 300 basis points over the past 2 years to 50% of households, which is our highest level ever. Compare this to a salty snack category where penetration while growing is closer to flat.
We're focused on attracting younger demographics where we're gaining households even faster. Among millennials, our penetration increased by nearly 500 basis points to 48%. We think this bodes well for our brands and their future potential.
Now let's shift to our long-term strategy, which has served us well over the past few years in a dynamic category in which we are evolving slightly for our next phase of growth. We're confident that when executed well on the following 4 strategies, we will create value for the company and its shareholders. Our first strategy is to outgrow the category by 200 to 300 basis points profitably, driven by growing in our expansion geographies and strengthening our core geographies.
Our second strategy is to consistently expand margins through productivity and mix improvement. Our third strategy, which is new versus prior years, is to accelerate our free cash flow to be able to delever and allocate our capital efficiently. And finally, our fourth strategy supports these aims by deploying the leading capabilities that we've built during the past few years into a best-in-class organization.
Turning now to our first and most important strategy, outgrow the category profitably through differentiated revenue drivers that I will review in detail. Looking at our path to outgrowth versus the category, we think it can be understood through 3 major components. First, expansion geographies, which represent 45% of our retail sales and can continue to grow at a high single-digit rate, particularly with our California expansion. The expansion geographies growth could contribute 3 to 4 points of our total growth over the category.
Second, hold our core geographies, which represent 55% of our retail sales. We believe through innovation and focus on our Power Four, we can hold our share and grow with the category. Third, manage an expected headwind of about non-branded and non-salty. However, this headwind should dissipate over time as the business becomes less of our portfolio. These 3 components comprise the 2 to 3 points of Utz growth above the category, which we believe is an achievable goal in the years ahead.
One of the misconceptions about Utz is that it's a zero-sum game between us and the category leader. However, there is a significant opportunity to source share from all other branded, mostly regional players that represent 14% of the category. Importantly, private label also plays a relatively modest role in the category at 7% share. Relatively limited private label is a structural positive for this category. Salty snacks has been and will continue to be a terrific category within the food industry. Prior to the pandemic, the category grew at about 5% annually, driven by strong brands, innovation and rational competition.
During the pandemic and the period of inflation that followed, the category grew over 11% per year, driven by pricing. Over the past couple of years, the category has been down slightly as consumers adjusted to these prices. However, we are encouraged by the most recent quarter in which the category was up over 1%. Prudently, our plan only assumes a flat category in 2026, but we have conviction that the category will return to growth in the medium and long term.
Now let's talk about the key growth differentiators that drive our net sales to 2 to 3 points faster than the category. First is our fastest-growing brand, Boulder Canyon, which still has significant distribution opportunities and a robust innovation pipeline. Second is our geographic expansion westward with California being meaningful. Third is strength in core geographies where we aim to hold share through new initiatives on the Power Four brands. And finally, fourth is our winning innovation with exciting new products also focused on our Power Four.
Let's start with Boulder Canyon, a brand we acquired 10 years ago and has experienced rapid growth more recently. We have multiple levers to continue Boulder Canyon's strong growth. First, continuing to grow in the natural channel where Boulder Canyon got its start. second, increasing distribution and assortment in other underpenetrated retail channels; third, driving brand awareness with Boulder's first fully national marketing campaign; and fourth, launch targeted innovation, leveraging the brand's better-for-you credentials.
I hope you had an opportunity to sample our Boulder Canyon products at the break because the brand is attracting new consumers with better-for-you snacks that taste amazing. The vast majority of Boulder Canyon business is seed oil-free and non-GMO and has become a snacking choice for modern consumers without sacrificing taste. We're proud to say that Boulder Canyon is now the #1 salty snack brand in the natural channel. And importantly, we believe the brand can successfully stretch into multiple salty snack subcategories and packaging formats.
While the brand has grown rapidly from $45 million in net sales in 2022 to nearly $200 million last year, substantial opportunity remains. With the space gains, strong velocities and innovation planned for 2026, we expect another year of very strong double-digit growth for Boulder Canyon. Longer term, with more items per store and space, we believe Boulder Canyon has the potential to be a $500 million-plus brand, which would equate to about 1/3 of our total company sales today. Boulder Canyon's performance in the natural channel has been outstanding with several -- with share in the natural channel doubling from 3.2% in 2022 to 6.6% in 2025, assuming the leadership position. We continue to work with our natural partners to ensure that we're bringing innovation and driving more awareness and trial.
Continuing our momentum in the natural channel is important, and we are also expanding Boulder Canyon in other retail channels by growing distribution and assortment. One of the key reasons we are confident in Boulder Canyon's growth trajectory is that our ACV distribution, excluding the natural channel, is still well below some of our other brands. Boulder Canyon's ACV was only 50% for the full year 2025 compared to Utz, which is nearly 80%. Second, our average items per store at 3.6 is well below other brands like us, and we would expect 8 to 10 items per store for Boulder Canyon in the medium term.
Another unlock for Boulder comes from our first national marketing campaign called Be for Real. The idea of the campaign is to get away from our screens, artificial intelligence prompts and the other parts of modern life and journey back into the real world. We believe this reflects part of Boulder Canyon's brand strength, nothing fake or artificial, real simple ingredients that taste good. We will use our marketing playbook of digital and connected TV, social media and partnerships along with point-of-sale activations.
Let me show you now some of our commercial spots.
[Presentation]
We're also excited by our Boulder Canyon innovation pipeline, several of which I hope you were able to try at the break. Last year, we launched Boulder Canyon tortilla chips made with blue corn, and we're excited to expand our product range this year with a selection of flavored tortilla chips to include on-trend flavors like Chili Lime and Sweet Spicy Chili, all cooked in avocado oil. Early consumer response has been encouraging, and these will launch nationally throughout 2026.
Also starting this quarter in select retailers, we will launch Boulder Canyon potato chips cooked in beef tallow, a non-seed oil fat that has received significant consumer attention.
Moving to our second key growth driver, geographic expansion. As you saw in my earlier revenue build, this is a key driver for outgrowing the category. Expansion geographies represent just 45% of our retail sales versus 64% for the category, which illustrates the tremendous white space opportunity ahead. Over the long term, we would expect that our business will become more evenly split between our expansion and core geographies. We believe there's significant opportunity for strong share growth in expansion geographies given we had a 3% share in 2025 versus our 4.4% average nationally and our 6.6% share in our core geographies. We have a proven track record of consistently building share in expansion geographies, and we believe California will accelerate this.
To demonstrate the expansion geographies opportunity, let me share the significant distribution and items per store potential for each of our Power Four brands. For example, On The Border only has 64% distribution with just 3.7 average items on shelf. Over time, we would expect to increase the distribution and items per share per shelf on all of our powerful brands within our core assortment and innovation, and we'll talk shortly about how this playbook has played out in our Florida case study. A common question we get is how are your initial expansion geographies doing and are they still growing? We're introducing a split out by stage of expansion geographies to answer this question, which we're calling initial expansion and recent expansion.
In our initial expansion geographies like Florida and Illinois, we achieved a strong retail sales growth of 5.8% in 2025. In our recent expansion geographies, which represents 30% of the salty snack category, our growth was an outstanding 11% in 2025, and that's before our current expansion into California. With expansion geographies, we use a phased growth strategy, leveraging our hybrid distribution to scale efficiently from entry to greater maturity. The first phase of market entry utilizes direct to warehouse and distribution partnerships to establish a foothold. This is how we were structured in California before our expansion initiative this year. Phase 2, as we build scale, we add dedicated DSD. This is what we're doing in California in 2026 after our purchase of DSD route assets last year.
The final phase is when we leverage our scale by setting up a fully independent operator network, augmented by select distribution partners. This is what we have done in geographies like Florida. We remain selective about DSD activation, focusing on concentrated population centers, large retail partners and supply chain proximity. As I mentioned, Florida is a great case study on how we execute this proven playbook. The build-out of our DSD route infrastructure in the early 2020s led to a significant retail sales growth and share in Florida, with retail sales of $118 million and share of 4.3% in 2025. This share in Florida is now approaching our company average, up from just 2.5% 5 years ago.
Importantly, we were able to keep our contribution margin in Florida steadily ramping up with sales even as we transition to a more dedicated DSD model. To achieve this strong revenue and share growth in Florida, we increased our total distribution points by approximately 2.5x from 2020 to 2025, with average items per store increasing by a similar magnitude, all unlocked by the DSD routes we acquired or built. We plan to apply the same playbook to California. California represents 10% of salty snacks nationally, but only 5% of sales today. So there's significant opportunity for growth in the state.
To support this expansion, we acquired DSD routes and assets in the state towards the end of 2025. While this was not a meaningful capital outlay, it does give us the infrastructure to quickly pursue new retail growth opportunities. Expanding California could add approximately $125 million of incremental sales on top of our $80 million retail sales today. This means that California could represent a $200 million-plus retail sales business for Utz. Calibrating this with the Florida case study, even if we went from our current 2 share to 4 share, which is less than our 4.5% share in Florida, we could gain $85 million in incremental retail sales.
While we expect this to be a multiyear journey and gradual, we're encouraged by the long-term potential and what California can do for our expansion geographies growth. Being even more specific, we plan to achieve this position in California by capturing the huge distribution and assortment opportunity available to us. We currently have about 1,600 distribution points in California. For context, the category has over 61,000 distribution points.
In our currently very limited distribution, we only have 9 items per store, while our expansion geographies typically have over 15 and our core geographies have over 30. Now you can understand why we're so excited about this opportunity. I mentioned earlier that California would be an accelerant to our overall expansion geographies growth. And recall that these markets we have already been in growing sales in the mid-single-digit range during the last few years. We think our California expansion can accelerate this to high single digits longer term, which ties to our 3 to 4 points of overall sales growth contribution from expansion geographies.
Now let's talk about our next growth differentiator, strength in core geographies. Core geographies represent 55% of our retail sales. And while expansion geographies are important for growth, we also must hold share in the core. And to hold the core, we need to strengthen our core. Within core geographies, the Utz brand is the key to holding share since the brand represents 61% of our retail sales within these geographies. And while we're focused on ensuring the Utz brand is successful, there's still great potential for our other Power Four brands in the core, some of which were introduced in expansion geographies like Boulder Canyon.
We have 4 key strategies to strengthen our core. First, investing marketing behind the Utz brand while ensuring optimal price points; second, expanding distribution of our other Power Four brands, Boulder Canyon, On The Border and Zapp's; third, building distribution in faster-growing channels and optimizing assortment across channels; and fourth, launching winning and on-trend innovation across the Power Four brands. As I said before, we have held volume share in core geographies at 8.2%, but our retail sales have been relatively flat due to channel mix.
Looking forward, we plan to hold both volume and dollar share in our core. An important aspect of investing behind the Utz brand is our marketing support, and we're addressing consumer interest in simple and clean labels through our Snacking Made Simple marketing message. This is a broader than an ingredient story and can be delivered across multiple consumer touch points. Over 80% of Utz branded products have only 3 ingredients, and we rolled out packaging late last year, highlighting only 3 simple ingredients, no artificial flavors or colors. Critical to success in core geographies is addressing consumers' price value needs, and we do this many different ways. The first is by leveraging brands up and down the price ladder from value brands like Golden Flake to mainstream brands like Utz and On the Border to elevated items like On The Border Organic to premium brands like Boulder Canyon.
Price pack architecture provides different pack sizes to address different consumer needs and occasions while offering value at each price point. We've invested significantly in our revenue management capabilities over the past 3 years to ensure that we have the right price discount or premium to competitors depending on the brands. We balance base price and price promotion strategy depending on the retail channel, and this slide shows our retail strategy in a variety of channels.
Our next key growth differentiator is winning innovation. As we ramp up our marketing and scale nationally, innovation becomes a more important part of our growth, and our pipeline has improved significantly, and we are excited and proud to talk about some of our 2026 innovations today. Our innovation pipeline is organized by key consumer drivers in salty snacks that we've identified from our research, those being delivering craveable flavors, capturing occasions, driving value and expanding positive choices.
We plan to launch innovations in each of these areas during 2026. On our Utz brand, we are continuing to introduce on-trend flavors. This year, we are introducing a restaurant-inspired one called Sweet and Smokey sauce. We are also rotating in a new seasonal item after last year's success with our lemonade flavor called Sizzlin' Summer Burger. And lastly, we will continue our occasion-based offerings, including those tied to major sporting events, Easter and Halloween.
One of the more exciting innovations we plan for Utz brand in 2026 is our protein line. While consumers have been asking for protein offerings for some time, we felt it was critical to introduce products that met this need without sacrificing taste. These products will offer 8 to 10 grams of protein per serving and will be available nationally in a variety of pack sizes starting in the second quarter of 2026.
Shown here are 3 pretzel items, which I hope you enjoyed at the break. In addition to pretzels, we will also have 2 Cheese Curl items with 10 grams of protein per serving. While we focus on innovation on Power Four brands, meeting consumer need for value in our price ladder is a priority with brands like Miguelito’'s and Golden Flake. We'll be expanding these brands with Miguelito’'s, Crunchy Curls and tortilla chips and Golden Flake Fries, which will launch in the second half of 2026.
Our winning innovation is supported by our increased marketing support, which I said before, needs to drive sales overnight and brand equity over time. We've made significant marketing investments over the past 4 years with spending rising at a 40% compounded annual growth rate. We expect to continue increasing marketing meaningfully again in 2026 to approximately 2% of sales, and we believe that 3% to 4% is the right long-term level, although this will continue to be a multiyear journey.
I've just reviewed our 4 key growth differentiators, Boulder Canyon, expansion geographies, strength in core and winning innovation. Taken together, these differentiators allow for multiyear growth potential well into the future. Longer term, we believe these differentiators represent approximately $500 million of incremental revenue opportunity, taking our total revenue potential to $1.9 billion. We believe our expansion geographies, excluding Boulder Canyon, can achieve 4% market share, still well below our core geography market share of 6.6%. I said that we expect Boulder Canyon to be a $500 million-plus brand longer term. And we will also continue to strengthen our core so we can hold share and participate in any category growth over time.
With that, I appreciate your time. I'm going to hand this over to BK Kelly, our CFO, to present our other key strategies.
Thank you, Howard. Let me start with our second strategy to expand margins consistently over time by driving productivity and mix improvement. Our supply chain transformation and productivity accelerated when we divested several plants in early 2024, which resulted in substantial outperformance versus our expectations.
Our manufacturing footprint has been rationalized from 16 plants at the end of 2022 to 7 plants today, increasing revenue by per plant by nearly 4x from $60 million to $207 million. The capacity utilization for our key potato chips and tortilla chip subcategories is now above 80%, up from approximately 55% 3 years ago. We also outperformed our productivity savings target, generating 6% productivity as a percent of COGS in 2024 and 7% or $66 million in 2025, a significant step-up from just a few years ago.
While we are in the later stages of the capital-intensive phase of our transformation, we still have a robust pipeline of productivity projects in the years ahead. This operational excellence has driven significant adjusted gross margin expansion, up by 400 bps since 2022 to 32.3% in 2025, and we will continue to drive this metric higher in coming years. Our adjusted gross margin now includes outbound freight and a large portion of our DSD costs.
We have made a substantial $200 million CapEx investment in our Now Focused Network over the past 2 years to modernize the equipment and automate production. This was a requirement to in-source production from the facilities that we closed or divested. Our network is now geographically dispersed and should support our national expansion plans very efficiently on a go-forward basis. Our CapEx spending is now normalizing after the significant step-up over the past 2 years when our investments in capacity, automation and modernization reached 7% of net sales. With this transformation largely complete, we expect our CapEx to step down to approximately 4% of net sales in 2026 and expect it to step down further to approximately 3% of net sales in 2027 and longer term, which will help drive stronger free cash flow generation. This normalized CapEx will deliver strong ROI with 80% of spending for high ROI productivity and growth projects and with maintenance projects only being approximately 20% of spending.
Putting this together, the average ROI of our CapEx spending will be significantly above our cost of capital. With the completion of our supply chain transformation, we are pursuing new efficiency initiatives in addition to base productivity and have multiple levers going forward. We expect base productivity to continue to deliver at least 3% of annual COGS savings. A new efficiency initiative is our distribution network optimization, which I will discuss shortly. We expect this new initiative to deliver approximately 1% of cost of goods above our base productivity of 3% for a total of 4% COGS savings over an extended multiyear period. Lastly, we are working across the enterprise to use technology to become more efficient, which should generate incremental cost efficiencies, particularly in our SG&A.
The sources of base productivity are in these 3 areas: procurement, manufacturing and logistics. Procurement will be a larger area of savings going forward at 45% with a focus on key initiatives like value engineering and strategic sourcing. Manufacturing savings will normalize at 35% as we complete our supply chain transformation, but we have continuing opportunities in automation and line efficiency. Lastly, logistics between our plants will continue to be an area of opportunity at 20% with route optimization and integrated planning. We believe direct order delivery or DSD distribution is a strategic asset for the company and represents half of our sales.
We continue to scale this DSD network nationally with independent operators, or IOs. Today, our DSD system is 99% IOs with 2,500 routes serving 125,000 retail outlets weekly. To support these IOs, we have 130 DSD warehouses nationally, and we believe there is significant opportunity to improve efficiency in this distribution network. Importantly, this distribution network optimization initiative will improve the network's effectiveness and service of both the company and IOs at a lower cost and expect to deliver 1% of COGS savings per year. We will achieve this productivity savings through drop size improvement and digital enablement, ensuring we have the right products and the right warehouses at the right time. There will be better asset utilization through a more efficient network structure with warehouses strategically placed and highly utilized. And finally, this optimized network will have working capital benefits and improved inventory turns.
Our historical financial performance provides a good framework for our expectations in the future. Our CAGR from 2022 to 2025 has been 2.4% organic net sales, 5.5% adjusted gross profit growth and 8.3% in adjusted EBITDA growth and 13.8% in adjusted EPS growth. Going forward, our priorities is to deliver consistent and predictable revenue and adjusted EBITDA growth. We expect organic net sales to grow 2% to 3% faster than the category, which we are assuming is flat in 2026. We would expect the category to return to growth longer term. We plan to expand adjusted EBITDA margins at a solid pace, supported by productivity of 4% of COGS, but this pace is dependent on our level of reinvestment, inflation and our top line trajectory.
Our target is to grow EBITDA by 6% to 8% annually, with some years being more top line driven and others being more margin expansion driven based on the business environment. 2026 is modestly below this algorithm at 4% to 7% without the 53rd week as we invested in our California expansion.
Lastly, on adjusted EPS, we would expect adjusted EPS growth to follow adjusted EBITDA growth before any share repurchases. 2026 is a unique year given headwinds from depreciation and amortization, interest and tax rate, but we expect this growth relationship to normalize in 2027 and beyond.
Importantly, relative to our peers, there remains significant longer-term margin -- long-term margin opportunity. Given our strong productivity program, we believe that we have the potential to achieve 17% adjusted EBITDA margins over time. However, the pace and the time line will depend on the category, reinvestment needs and inflation dynamics. Our focus will be on growing adjusted EBITDA in the range of 6% to 8% per year. How quickly we achieve a 17% adjusted EBITDA margin will depend on where we perform in the range and whether our adjusted EBITDA growth is more top line or cost driven. We remain confident in our long-term structural margin drivers, including productivity and mix.
Turning now to our new third strategy to accelerate our free cash flow to delever and to be able to allocate our capital efficiently. Our historical cash flow generation has shown improving cash flow from operations over the last 2 years, but this has been offset by the significant step-up in CapEx that I discussed earlier. As a result, our new adjusted free cash flow metric has been relatively flat at around $30 million. We are including sales of property and equipment in this adjusted free cash flow metric as these asset sales have increased as a result of the reconfiguration of our supply chain and are considered when we make our capital allocation decisions.
Our aim is to increase conversion of adjusted net income to free cash flow, and we have multiple drivers at our disposal to achieve this. In 2026, we expect adjusted net income to adjusted free cash flow to convert around 70%. Looking at 2027, we think the planned step down in CapEx in addition to working capital initiatives and further monetization of noncore real estate should allow us to reach our target of 80% to 90% adjusted income conversion to adjusted free cash flow. As we expect our adjusted free cash flow should accelerate nicely on a multiyear basis given these drivers. From approximately $34 million in both 2024 and 2025, we expect $60 million to $80 million of adjusted free cash flow in 2026 and $100 million plus annually thereafter. This cash flow will allow us -- will give us the ability to deleverage and pursue our capital allocation priorities over time.
The higher cash will be used according to our capital allocation priorities. We will always first invest in our business if the proper return is available and our plans capture these needs. Our second priority is debt paydown and deleverage remains our key priority. We will continue to pay our current dividend with modest growth. We just announced our first share buyback program of $50 million, which we plan to use over time opportunistically.
And finally, we will pursue M&A if the value creation potential for shareholders exceeds other capital return options. More specifically, our stronger cash flow will allow us to delever further to a 2.5x leverage ratio longer term. After ending 2025 at 3.4x, we expect to be able to reduce leverage approximately 0.3 to 0.4 turns per year, targeting to 3.2x at the end of 2026, 2.7 to 3x at the end of 2027 and then 2.5x longer term.
Returning to M&A for a moment, we will remain disciplined in valuation. We'll be thoughtful about the leverage impact of any transaction. We have an acquisition-savvy management team, an experienced Board and a scaled manufacturing and distribution system capable of capturing synergies effectively. Any acquisitions must be strategically additive to our to our brand portfolio. They must be incremental from both a consumer and retailer perspective and enhance our long-term growth profile.
Finally, as we discussed since our transition to the public markets in 2020, part of the strategic rationale has always included the optionality of a Reverse Morris Trust transaction. We believe we continue to be a strong candidate and credible RMT candidate.
Let me talk about one initiative in our last strategy, deploy leading capabilities. This initiative is about technology enablement and capturing AI opportunities. By deploying advanced analytics, we are confident that we can drive end-to-end efficiency. More specifically, within our commercial operations, AI will drive our planning and forecasting and support more predictive revenue management. In our supply chain, we will leverage optimized manufacturing and distribution along with automated processes. And finally, in our digital core, we'll achieve common unified data to better support our integrated business planning.
Let me now summarize what you have heard today and why we believe Utz is a great investment. We are targeting to deliver sales growth 2 to 3 points faster than the category consistently over time given the differentiators that Howard discussed. We are focused on continued and sustainable margin improvement, leveraging our productivity engine. We are targeting long-term annual adjusted EBITDA growth of 6% to 8%, driven by solid top line growth and margin expansion. And finally, we will ensure that our bottom line results convert to accelerating adjusted free cash flow, which we can use to delever and allocate capital efficiently.
Thank you again for this opportunity, and we'll be happy to take questions during our breakout. Thank you.
Maybe we're going to head right over to the breakout. So I know you all just clapped. Let's do it one more time to thank Utz for the generous sponsorship of the conference.
Utz Brands Inc — Consumer Analyst Group of New York Conference 2026
Utz Brands Inc — Q4 2025 Earnings Call
1. Management Discussion
Good morning, and thank you for joining us today for our prerecorded discussion of our fourth quarter and full year 2025 earnings results. Joining me on the call today are Howard Friedman, CEO; and BK Kelley, EVP and CFO. In addition, this morning at 8:30 a.m. Eastern Time, we will host a live question-and-answer session, which you can access via webcast on our Investor Relations website.
Please note that some of our comments today will contain forward-looking statements based on our current view of our business, and actual future results may differ materially. Please see the forward-looking statement disclaimer in the earnings materials and our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance.
Today, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's earnings materials. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our Investor Relations website.
The company has also posted presentation slides and additional supplemental financial information on our Investor Relations website. Lastly, I want to mention that we plan to file our 2025 10-K after the market closes today, February 12.
And now I'd like to turn the call over to Howard.
Good morning, everyone, and thank you, Trevor. I will start with a summary of our 2025 performance and follow with an update on the fourth quarter, after which BK will provide detailed financial commentary and 2026 guidance. Before we get started, I would like to thank all of our hard-working associates across the company for their dedication to Utz. While we navigated some headwinds in the fourth quarter, we made substantial progress on our long-term strategies during 2025.
2025 was a year of accelerating top line growth versus the category, strong Branded Salty organic sales performance and significant adjusted gross margin and adjusted EBITDA margin expansion. For the year, organic net sales grew 2.4% and Branded Salty organic net sales grew 4.7%, while the category was down 0.5% in retail sales dollars. We gained volume share in our core geographies, while expansion geographies continue to demonstrate the stretch of our brands with both dollar and volume share gains. According to Circana MULO with convenience for the 52 weeks ended December 28, 2025, our expansion geographies grew retail sales by 7.8%.
Our supply chain transformation and consolidation were largely complete by year-end with substantial capital expenditure allocated to network consolidation, automation and modernization during both 2024 and 2025. Since 2022, we've reduced the number of our major facilities from 16 to 7, including the expected closure of Grand Rapids.
Our productivity programs continue to deliver best-in-class results. We delivered 7% productivity in 2025, well above our goal of 6% of adjusted cost of goods sold, expanding adjusted gross margin by 260 basis points and adjusted EBITDA margin by 80 basis points for the full year. Note that our 6% of adjusted COGS target was prior to the reclassification of cost of goods sold that we announced on February 3 via 8-K filing. BK will give more details on this change.
The productivity and efficiency programs continue to fund reinvestment in our brands and organizational capabilities with marketing spending increasing 35% in 2025 on top of nearly 70% increase in 2024. We plan to continue to increase marketing spending in 2026 to support our brands.
We also announced our expansion into the California market with the purchase of Insignia's DSD routes and select assets in the state. We believe that California will be a key growth differentiator for the next several years. California shipments through the Insignia assets will begin later this month.
The balance sheet continues to improve with strong fourth quarter cash flow performance and deleveraged to 3.4x versus 3.6x a year ago. You will hear a lot about free cash flow from BK on this call. We are focused on accelerating our free cash flow generation as our supply chain work progresses to a significantly less capital-intensive stage. We expect this strengthened free cash flow to allow us to further delever our balance sheet to longer-term desired levels and then, as appropriate, utilize our inaugural share buyback authorization of up to $50 million. This share buyback authorization is an important addition to our long-term capital allocation strategy.
Turning to our performance in the fourth quarter. Our net sales results were below our expectations despite strong retail sales growth. This was primarily due to inventory destocking that caused shipments to lag consumption in the second half of the quarter. Encouragingly, shipments normalized versus consumption as we exited the year, and these trends have continued so far during the first quarter of 2026. We also believe that retail inventory levels are beginning to normalize.
Net sales growth was 0.4% in the fourth quarter, led by Branded Salty Snacks organic net sales of 2.5%. Note, that as there were no acquisitions or divestitures impacting the fourth quarter, organic net sales growth is equal to reported net sales growth. This marks our eighth consecutive quarter of growth in Branded Salty Snacks, which now represents 89% of our total net sales.
Net sales were driven by a 0.5% increase in price versus a 0.1% decrease of volume mix as more acute pressures in our core geographies during the quarter, primarily related to SNAP delays and the government shutdown, in addition to weaker partner brands and Non-Salty volume mix impacted this metric. Branded Salty organic net sales were driven by solid volume/mix growth of 2.1% and price of 0.4%. We are pleased with our positive price performance in the quarter as we strategically implemented revenue management initiatives and managed our price gaps.
Affordability has consistently been part of our strategy at Utz. We will continue to ensure we are offering a good value proposition to consumers. The price investments we made in 2025 and our enhanced capabilities in revenue management give us confidence that we can achieve our 2026 top- and bottom-line guidance in the current category environment through innovation, marketing and our current promotional strategy. We also feel good about the distribution and shelf space gains planned for 2026.
Our innovation plan for 2026 is robust, and we are pleased to announce some exciting news. As we look to meet consumer needs and expand positive choices, we are launching Utz Protein Pretzels and Cheese Curls in the second quarter of 2026. These products offer 8 to 10 grams of protein per serving and will allow the brand to participate in this growing trend.
Boulder Canyon will launch a new non-seed oil fats line with kettle chips cooked and beef tallow. The ability of Boulder Canyon to stretch into new product areas is encouraging and response from channel partners has been very positive. Boulder Canyon Classic Sea Salt cooked in beef tallow is expected to launch in the first quarter, and we look forward to sampling these products for the investment community next week at the CAGNY conference.
Turning to our fourth quarter retail performance. We gained both dollar and volume share in the Salty Snacks category for the 13-week period ended December 28, 2025, as measured by Circana MULO with convenience. This marks our 10th consecutive quarter of share growth. Our performance was again driven by the momentum of our Power Four Brands.
Our strong consumption results reflect the sustained momentum of Boulder Canyon, strong gains in expansion geographies, including from Utz, our largest brand, and targeted promotional investments. We posted solid 3.5% dollar consumption growth in the quarter, led by 3.1% price per pound growth compared to the category's 1.1% dollar growth. Our Power Four Brands increased 5.3% in retail sales dollars, driven by 3.8% price per pound. We believe that Circana MULO plus convenience captures approximately 85% of our reported Branded Salty Snacks organic net sales. As we mentioned, Branded Salty Snacks organic net sales grew 2.5% in the fourth quarter.
Now turning to our core geographies, where certain headwinds, primarily related to the SNAP payment delays and government shutdown, caused more pressure on our business versus the category. Despite this, we continue to gain dollar share in our Power Four Brands within the core. Total company retail sales dollars in core geographies increased 0.5% with Power Four Brands leading at 1.8% versus the total Salty category up 1.1%. Total company retail volume decreased by 2.4%, while Power Four Brands performed modestly better with a 1.7% volume decline versus the category's 0.2% volume increase. While Boulder Canyon was the leading growth driver in core markets, we also saw dollar and volume share growth in Utz cheese and Golden Flake Pork Rinds.
Momentum in our expansion geographies continued this quarter with the total company and our Power Four Brands capturing both dollar and volume share. We achieved strong total company retail sales growth of 7.3%, which significantly outpaced the Salty Snacks category growth of 1.1% in these markets, driven by ongoing distribution gains and higher velocities. Brands contributing to our growth in expansion markets include Utz, Boulder Canyon and Golden Flake Pork Rinds.
Our expansion geographies represent 45% of total company retail sales per Circana data, reflecting our sustained progress. We believe the growth runway remains substantial as our average market share of 3.2% in our expansion geographies versus 6.7% in our core markets illustrates the opportunity ahead. This quarter saw four of our expansion markets exceed 4% market share, Florida, Illinois, Colorado and Missouri. The average growth of these four markets on a 52-week basis according to Circana MULO with Convenience was 5.8% year-over-year. We believe this demonstrates that some of our larger expansion markets are continuing to show healthy growth well above the category.
From a subcategory perspective, our measured channel share gains for the total company were led by potato chips and pork. In potato chips, our total retail sales grew 11.3% versus a subcategory decrease of 0.2%, our performance largely driven by strong Boulder Canyon growth. In tortilla chips, our retail sales declined 3.9% versus a subcategory increase of 1.1%. Our sales performance came in lower than the subcategory, primarily due to softness in On The Border, but we were encouraged by the improvement in trends versus the third quarter.
In pretzels, across our total portfolio, our retail sales increased 1%, which was lower than the subcategory increase of 6.4%, but our Utz branded pretzels grew by 7% ahead of the subcategory. In cheese snacks, our retail sales increased 3.6% versus subcategory increase of 2.2%. Utz branded cheese snacks growth of 6.6% outpaced the subcategory. In the pork rinds subcategory, we significantly outperformed the market with retail sales growth of 7.9% compared to a 2.3% decline for the overall subcategory. This strong performance was driven by Golden Flake velocity gains.
Our Boulder Canyon brand continues to outperform and gain share in both the natural and conventional channels with growth of 29% and 140% in the fourth quarter, respectively. Consumers are continuing to connect with this brand and are appreciating its better-for-you attributes and great taste. With Boulder Canyon's ACV currently at 59% according to Circana MULO with convenience versus some of our larger brands near 80%, we believe there remains significant growth potential ahead. Shelf space gains already awarded in 2026 and the innovation pipeline, including our tallow launch, gives us confidence in Boulder Canyon's continued growth trajectory.
On the marketing front, we increased investments significantly in the quarter with marketing up 72% year-over-year. As I mentioned before, we have increased our full year 2025 marketing spend by 35% on top of a nearly 70% increase in full year 2024. We believe our household penetration statistics continue to support our investment in a more meaningful share of voice. For the 52-week period ended December 28, 2025, versus the comparable prior year period, our household penetration has increased 164 basis points to 50.2%. Buyers have increased by 2.6 million to 65.7 million and buyer repeat rates increased by 80 basis points to 70.2%.
Our fourth quarter and full year performance underscores the effectiveness of our approach in a more dynamic macro backdrop, focusing on advantaged growth through Branded Salty Snacks, our Power Four Brands and our expansion geographies. We continue to believe that these initiatives will allow us to outperform the category during the mid and long term.
With that, I'll turn it over to BK, who will walk you through our financial results and 2026 guidance in more detail.
Thank you, Howard, and good morning, everyone. In the fourth quarter, our net sales increase of 0.4% was led by price growth of 0.5%. This was partially offset by lower volume/mix of 0.1%, which is impacted by the headwinds Howard described earlier. We delivered Branded Salty Snacks organic net sales growth of 2.5%, led by volume/mix growth of 2.1%. Organic net sales in our Non-Branded and Non-Salty Snacks declined 14.8%. We believe this segment was also impacted by the headwinds experienced in our Branded Salty segment.
I will briefly touch on the reclassification of certain expenses from SD&A, now called SG&A to cost of goods sold beginning in Q4 of 2025, which we announced February 3 via an 8-K filing. We believe that including delivery and other certain distribution costs related to our DSD network and cost of goods sold better reflects our business and how we manage our network productivity and efficiency programs. This had no impact on EBITDA, adjusted EBITDA, net income and adjusted net income. We believe our go-forward adjusted SG&A expenses are a better reflection of corporate costs in addition to marketing and selling. Importantly, as we look forward, our productivity guidance will assume this higher base of cost of goods sold.
We delivered strong margin performance with adjusted EBITDA of 17.5%, adjusted earnings per share rising 18.2% and adjusted gross profit margin expansion of 560 basis points. Our productivity initiatives drove these gains, allowing us to offset other supply chain costs and inflation and fund our continued SG&A investments.
Adjusted EBITDA margin expanded by 260 basis points to 18.2%. Productivity savings contributed 620 basis points to adjusted EBITDA margin expansion and pricing contributed 30 basis points. This was partially offset by 70 basis points from volume/mix, 200 basis points of increased supply chain costs and inflation, 80 basis points of higher marketing spend and 40 basis points of selling, general and administrative expenses.
Adjusted SG&A expense increased 18.9% versus the prior year quarter or 280 basis points as a percentage of net sales. This increase was largely driven by planned investments in marketing, selling and capabilities.
Our supply chain transformation is largely concluded with the accelerated capital expenditures in 2024 and 2025, in addition to the expected closure of the Grand Rapids facility this year. We executed our plan to sell Grand Rapids in the fourth quarter, and we are pleased with the outcome. To allow for increased flexibility and in partnership with the new owner, we have decided to lease the facility and operate a single production line with limited staff for the remainder of 2026 until we exit. Our cost savings expectations have not changed, and we expect to fully realize the remaining expected savings in the first quarter as planned.
While our transportation costs remain meaningful in the fourth quarter, we believe that they will substantially normalize in 2026. I will go in more detail on our expected restructuring and transformation costs later.
Turning to cash flow and the balance sheet. Cash provided by operations for the 52 weeks ended December 28, 2025, was $112.2 million as we executed on the three strategic areas we outlined on the third quarter call. One, working capital initiatives to improve cash conversion; two, maximizing our seasonal release of cash; and three, real estate sales, including Grand Rapids.
Capital expenditures were $102.8 million and reflect the increased spending to support our supply chain transformation and modernization initiatives. We paid $37.7 million in dividends and distributions to shareholders during 2025.
Regarding the balance sheet, cash on hand was $120.4 million as of fiscal year-end. Liquidity, including access to our revolver, remained strong at $240.1 million, giving us ample financial flexibility. Net debt at quarter end was $741.8 million, and our net leverage ratio was 3.4x trailing 12-month adjusted EBITDA of $216.5 million.
Now turning to our outlook for 2026, where we have introduced some new guidance metrics. 2026 also benefits from the 53rd week in the fourth quarter, and we have quantified the impact of the extra week where appropriate.
We have operated in a dynamic category environment during the past 2 years, and we are proud of our progress. It remains a top priority to deliver consistent and predictable adjusted EBITDA growth in a variety of category outcomes. Accelerating free cash flow to allow for deleverage and capital allocation flexibility has also become a priority.
For 2026, we expect organic net sales growth of 2% to 3%, which assumes a flat category at the midpoint. While the category is off to a solid start in 2026, and we are encouraged by recent trends, consumer purchasing ahead of winter storms and the Super Bowl have provided some benefit, and we'd like to see the positive trend sustain for a longer period before taking a more constructive category view. We believe this is a prudently conservative approach given the relatively soft category of the past 2 years. This organic net sales metric excludes the 53rd week, and we expect an approximate $20 million benefit to reported sales in the fourth quarter as a result of the 53rd week.
From a sales phasing perspective and excluding the 53rd week benefit, we would expect sales split about equally between first half and second half with the first and fourth quarters exhibiting the strongest year-over-year growth trends.
Volume/mix and price should both be positive and contribute to 2026 growth as we lap bonus bags and continue to benefit from revenue management initiatives. Recall, we made targeted price investments throughout 2025. Related to lapping bonus bags, in the first quarter of 2026, we expect to see a positive impact on price of approximately 3 points, offset by a similarly negative 3-point impact on vol/mix from this promotion. As it relates to Non-Branded and Non-Salty pieces of our portfolio, we would expect declines to moderate somewhat from 2025 with the first half being weaker than the second half.
Moving to adjusted EBITDA. We expect 2026 growth of 5% to 8%. This range assumes solid EBITDA margin expansion. The 53rd week is included in the adjusted EBITDA range. The 53rd week is expected to benefit fourth quarter adjusted EBITDA by approximately $3 million. Included in our adjusted EBITDA guidance is $4 million to $6 million of investment in our California expansion, which we expect to be more heavily weighted in the first half.
Productivity is expected to be approximately 4% of our adjusted cost of goods sold base, which is larger versus our previous guidance framework due to reclassification of shipping and distribution costs. We anticipate the strongest productivity benefits in the first half of 2026, driven by projects launched in 2025 and normalization as we progress throughout the year.
From a phasing perspective and excluding the $3 million benefit in the fourth quarter from the 53rd week, we expect adjusted EBITDA weighting to be more in line with historical averages after a more second half weighted year in 2025 due to productivity phasing. We expect approximately 46% of adjusted EBITDA in the first half with the highest year-over-year growth rate in the second quarter. As a reminder, the toughest growth comparisons are in the fourth quarter.
Turning to adjusted EPS. We expect adjusted EPS growth to be below adjusted EBITDA growth in 2026 due to higher depreciation and amortization, interest expense and a modestly higher tax rate. I will go into the drivers of these three factors shortly. Adjusted EPS is expected to decline between 3% and 6%. The combination of these three items is expected to impact adjusted EPS by approximately $0.12 versus 2025 at the midpoint of our guidance ranges. The 53rd week is included in the adjusted EPS range and should benefit fourth quarter adjusted EPS by approximately $0.02. Long term, we would expect adjusted EPS to grow in line with adjusted EBITDA. Also note that our current adjusted EPS guidance assumes no paydown of our Term Loan B or share buybacks.
We expect depreciation and amortization of $93 million to $97 million, a step-up of approximately $13 million from 2025 as all capital projects will be in service for the entirety of fiscal year 2026. Interest expense is expected in the range of $47 million to $49 million, which primarily reflects higher costs associated with our new Term Loan B swap. Lastly, we expect an effective normalized tax rate of 17% to 19%, an increase from 15.9% in 2025 as we were able to take advantage of some discrete tax benefits last year.
I'd like to spend a moment on depreciation and amortization as the company's supply chain consolidation and transformation have caused significant movement in this metric. Going back to 2022, the company reported approximately $87 million in depreciation and amortization. As we divested brands and plants, D&A declined to as low as $70 million in 2024. The capital required, above $200 million spread over 2024 and 2025, to in-source this production and modernize our remaining facilities has resulted in the expected $93 million to $97 million run rate. We expect more modest increases in depreciation and amortization going forward.
As we look forward, cash conversion and free cash flow will take on increased importance as we look to further deleverage and opportunistically return capital to shareholders. We expect capital expenditures to decline from $102.8 million in 2025 to a range of $60 million to $65 million in 2026. We believe this reflects a meaningful step towards a more normal cadence of capital expenditure, but expect to lower spending again in 2027 towards our longer-term run rate.
Transformation, restructuring and other frictional costs related to our supply chain consolidation, modernization and corporate initiatives were elevated in 2024 and 2025. These costs are expected to substantially normalize in 2026. We expect cash supply chain and corporate restructuring and transformation costs to decline to approximately $30 million to $35 million in 2026, a significant reduction versus 2025. Those costs should decline further in 2027.
The combined benefit to our free cash flow generation potential from reduced capital expenditures and normalized transformation and restructuring costs should be meaningful. We also plan to introduce new reconciliation tables of GAAP to non-GAAP in the first quarter of 2026 to allow for enhanced presentation of our supply chain and corporate transformation and restructuring costs, so you can track our progress on this metric.
We are also introducing adjusted free cash flow guidance, and we believe that our free cash flow generation potential allows us to prioritize debt paydown and opportunistically buy back shares over time on the $50 million authorization Howard mentioned earlier. The adjusted free cash flow metric represents cash flow from operations less capital expenditures plus net sales of property and equipment. Given our capital expenditure and facility consolidation is what has allowed us to consistently divest excess real estate and equipment, we think including these sales in our adjusted free cash flow metric reflects how we manage our capital expenditure decisions.
In 2026, we expect adjusted free cash flow to be between $60 million and $80 million, which represents just about 70% conversion of expected adjusted net income at the midpoint. As CapEx and transformation costs normalize further, we would expect adjusted net income to convert at an 80% to 90% rate to adjusted free cash flow. The further decline of capital expenditures and cash transformation and restructuring costs should allow the business to generate adjusted free cash flow of more than $100 million in 2027 and beyond.
Finally, as it relates to the balance sheet, we expect to reach between 3x and 3.2x leverage by year-end. Deleveraging will remain our clear priority. Any buyback activity will not impact our ability to end the year in this range. Longer term, we would expect the business to delever approximately 0.3x to 0.4x per year, while allowing for some flexibility in capital allocation.
It is important to remember that our business builds working capital in the first half and releases it in the second half, and there is a seasonal pattern to leverage. We would expect 2026 to follow typical patterns, the highest leverage point of the year being in the first quarter and declining thereafter. We would also expect leverage to exhibit year-over-year improvement each quarter.
Our 2026 guidance reflects our approach to dynamic operating environment, deliver organic net sales growth of 2% to 3%, while assuming Salty Snacks category as flat, grow adjusted EBITDA consistently and predictably fueled by productivity and convert our profits into free cash flow to fund our capital allocation priorities.
With that, I'll turn it back to Howard for closing remarks.
Thank you, BK. I am proud of our full year results and how we have executed well despite certain category and macro headwinds. Our playbook remains the same: grow profitably above the category, driven by our Branded Salty segment and expansion geographies, expand margin and reinvest in our business fueled by productivity.
We believe we can deliver consistent, predictable growth with our model while also generating significant free cash flow. Normalizing capital expenditures and transformation costs give us controllable levers to improve our returns and accelerate capital allocation, led by the priority of deleveraging while still driving towards our growth aspirations.
On behalf of everyone at Utz, I want to thank you for your ongoing confidence in our team as we continue bringing our beloved salty snacks to new markets and new consumers nationwide.
Utz Brands Inc — Q4 2025 Earnings Call
Utz Brands Inc — Q3 2025 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by. My name is Colby, and I'll be your conference operator today. At this time, I'd like to welcome you to the Utz Brands, Inc. Third Quarter 2025 Earnings Conference Call, question-and-answer session. [Operator Instructions]
I will now turn the call over to Trevor Martin, Senior President of Investor Relations.
Thank you, operator, and good morning, everyone. Thank you for joining us today for our live Q&A session on our third quarter 2025 results. With me on today's call are Howard Friedman, CEO; and BK Kelly, CFO. I hope everyone has had a chance to read our prepared remarks and view our presentation, all of which are available on our Investor Relations website.
Before we begin our Q&A session, I just have a few administrative items to review. Please note that some of our comments today will contain forward-looking statements based on our current view of the business and actual future results may differ materially. Please see our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. Today, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's earnings materials. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website.
Now operator, we are ready to open the line for questions.
[Operator Instructions] Your first question comes from the line of Andrew Lazar from Barclays.
2. Question Answer
Maybe to start off, at your Investor Day a couple of years ago, I know you laid out a 3-year financial plan. And obviously, the sales and consumer environment has changed dramatically since then with us though continuing to obviously outperform the category pretty meaningfully. And the company has maintained its expectation for EBITDA margins of around 16% in '26 or about 100 basis points of expansion each year. You've delivered that the last 2 years. In the prepared remarks, I know you made some comments around maybe some incremental investments in '26, particularly to support the California expansion for the acquisition announced today, which is exciting. I'm just curious like in terms of thinking through expectations for next year, if perhaps that EBITDA margin expansion could be a bit less significant just in an effort to maintain the strong top line momentum that you've been able to deliver over the last couple of quarters.
Yes. Andrew, I'll start, and I'll hand it over to BK to continue. Look, I think if you went back to Investor Day, there were a few things that we had laid out. One obviously was that we had a meaningful top line, bottom line and gross margin opportunity that we wanted to progressively address, that we believe that we could drive accelerated top line growth above the category as we were able to hold our core geographies and expand eventually getting coast to coast and funding that through a productivity program that would deliver meaningful gross margin expansion and obviously fall through to EBITDA. I think as you look at over the last couple of years, we're pretty pleased with our progress around all of those objectives. And one of the things that I think that has been important in our story has been the ability for us to drive expansion market top line growth and enter into new geographies, which we have, at this point, a pretty solid proven playbook.
And as you look at something like Florida, where we had entered a couple of years ago and you were actually able to see progression where we made incremental investments to build out that business and start to accelerate our top line, we look at that as a good example of kind of what we are looking at in California, although obviously, California is a much greater scale. So as you look at our building blocks in '25 turning into '26, I think we feel very good about the top line momentum that we have and the opportunity to further accelerate it as we get into California in a more meaningful way in 2026. We've said 200 to 300 basis points ahead of the category and obviously, by entering into California and making some incremental investments there, we believe we should be at the higher end of that range. I'll hand it over to BK for the rest of the question.
Thanks, Howard. Good morning, everyone. The first thing I would say is there's nothing structural preventing us from getting to 15% EBITDA [indiscernible] period. I think the building blocks that Howard talks about underlying our financials strong productivity, the ability to have good revenue growth management tools in place, those all are really, really strong. In '26, as I said in the script, we will have -- continue to have best-in-class productivity activity coming through as our supply chain transformation that has been a heavy lift with potential CapEx, it kind of steps down. So when I start talking about free cash flow, that's intended to be incremental and additive to our story. We are doing the things you would expect us to do at this point in time, having come off our peak CapEx and our key transformation cost elements. And so now the focus has started to -- not only are we able to expand margins and grow our top line, we can also drive free cash flow.
Great. And then I would like to dig in a little bit more on the California route acquisition, which is exciting. I guess maybe you can get into a little more detail, Howard, on how sort of previous deals like this in other regions sort of have enabled us to sort of step change the market penetration that we can look forward to in California, or, in other words, I guess, have allowed you to continue to sort of drive share in these expansion markets even after the initial launch into these markets, meaning in years 2, 3 and beyond?
Yes. I appreciate the -- obviously, probably the most -- the easiest example for us to give you is something like Florida, where it is a geography where we actually entered and then we have bought routes over time. Obviously, we bought a route system last year back with our national acquisition. But if you were to go all the way back to, say, like 2020 in Florida, we were about a 2.5% market share. And the first couple of years was really about getting into the market in a more focused way and sort of starting to mature it.
And then really in 2022 was when we actually saw a meaningful -- first meaningful step change, which is about a 70 basis point improvement relative to that 2020 range. And we've been able to add market share growth from there. So call it from a 2.5% to a 3.2% and latest 52 weeks in Florida, we're at about 4.2%. And I think it's important to realize that this actually does, to your point, grow gradually over time as we get into the market and get our execution up and running and actually make sure that our playbook is working the way we'd expect it to. But where we go, we stay, and we have a high degree of confidence that this is the next step in continuing our accelerated top line growth.
Your next question comes from the line of Michael Lavery from Piper Sandler.
I wanted to unpack California maybe a little bit more. Can you give us a sense of does the acquired network cover the entire state? What are those routes carrying now? How easily do you have room on the trucks for your products? Is there a swap out? And maybe a little sense of -- you mentioned it's included in guidance, I assume that means costs. What are some of the costs that are associated with it other than the acquisition price?
Yes. So let me start. Obviously, it's early days on the integration work that we have to do. I think what the route network allows us to do is to actually look at the portfolio of products with an existing network and infrastructure and customer relationships and begin to introduce our products onto those routes, call it, in early 2026. So there is going to be some work there to make sure that we have the right assortment and that we're working with our IO partners and the retailers to make sure that we're getting the distribution that we're expecting. So a little early on the puts and takes of what will be there, but yes, we're confident that we can bring our products into those systems and start to drive the growth that we expect that we can get.
I mean, for context, remember, we're only about a 1.9% share of market in California, and it's about 10% of the salty category in the total U.S. So there's a big opportunity. In terms of the size of the market, obviously, this is an entry and so, they're about the same size as the national route system was. There's some routes in the upper Midwest that we also got as part of this transaction where we already carry some of our product. But we'll be making some -- we'll make continued investments to fully mature that market with our hybrid distribution model over time.
Okay. And just on the volume price mix split, very strong volume gains, obviously. You have very slightly negative price. It would seem like that's probably helped or driven at least a bit by expansion markets where I think you tend to promote a bit more to drive trial. Can you unpack a little bit maybe just how to think about the runway there? Is price at the right level? Is it mostly trial related? Obviously, you've got the strong volume momentum. Would you expect price to be positive going forward or is it sort of similar to the split in this quarter here?
Sure. Let me answer that. On the pricing piece, what you saw in the quarter was about a 1% drag, 1% drag is what we talked about and it played out how we anticipated. To your point, we are price followers, but we also have very good revenue management and our ability to compete in the best interest of both the consumers and the category. So there are many variety of ways for us to price. We think we will always choose the one that makes most sense for us. And our surgical approach to pricing but we also manage it through trade, through promotion and to your point, expansion markets. And our goal is to continue to be more effective more quickly and bringing those expansion markets in line.
Yes. I'll just add, Mike, what we said in Q3 or in Q2 was that we expected a 1-point drag in Q3 and Q4. And so the year is largely the way we would have expected to. And I think as you go into next year, we'll kind of see where we are. But to BK's point, feel very good about what we're doing on the rev man side of things. And I think the quarter generally came in the way we would have envisioned when we started this.
Your next question comes from the line of Peter Galbo with Bank of America.
Howard, I just wanted to ask maybe a few, I don't know, more technical questions about the California expansion. It's been 2.5 years, I guess, since the last kind of acquired, and that was Kings Mountain, so even going further back on routes. But I mean, should we expect that this -- like are these independent operators? Are they company-owned? Are we going to have to go through an IO conversion cycle again? Should we be looking at things like pruning of that portfolio the way you would have on an RW Garcia? Like I just want to understand some of the more technical components of what kind of will be factored in now the deal is kind of consummated?
Yes. Fair question. So a couple of things. First of all, I would offer you, we bought a similar-sized business or a similar sized route network in national last year in Florida. And I'd say that generally, the IO conversion discussion that we've had has not been driven by routes that we acquire because you think about it as we were already paying a commission in some cases or we didn't have a relationship and it was new business. And so, generally, when we bought back our distribution, it was actually a benefit of less commission to a mass distributor and but a commission to an independent operator. Where the IO conversion a couple of years ago was different as we were actually transitioning from, we own the entire relationship on the revenue line to suddenly we had this commission that we were paying. So we don't anticipate mechanically that being a topic of conversation next year.
I do feel like you're getting the greatest hits of my first year when we talked about private label SKU rationalization. We're also not anticipating that to be a significant part of the story. If you think about where we've been on partner brands over time, all of these -- all of the things that are on this route would fall into the partner brand line within the P&L, and we would expect that, that will continue to decline modestly or continue to improve. The decline that we will get will lessen, but it will still continue over some period of time as we actually continue to expand our business. So I'm not sure -- I don't think you should expect a whole lot of historical mechanics to actually have to come back into the story.
Okay. Cool. Helpful. And then I don't know, free served to either Howard or Bill on this one. But I think part of the stock reaction today, both is in response to maybe the commentary around the '26 margin, and it seems like maybe there is a bit of backing off on that 16%. But also in the quarter itself, I think the EBITDA margins were okay, but the gross margins were a bit light. There was some discussion around a worse potato crop, I think, that may be influenced. And I know you buy from the East Coast, but there was like a record potato crop through most of the U.S. this year. So just trying to understand like what happened? And how quickly can you pivot and there should be a lot of cheap potatoes floating around. So just how quickly can you kind of recover that gross margin piece?
I'll start on potatoes and then Howard can expand on it. Just to give a few facts, about 1/4 of our raw material basket is potatoes, and we source what we call chipping potatoes that are mostly from the Midwest and East Coast. This is very different than the crop that is used by folks that manufacture or make them sell and deliver French fries as an example but the areas that we source from are very close to our primary facilities. And what we saw in the quarter was some weather-related crop issues. Obviously, we had a very cold wet spring in the East and then followed by a very dry, dry summer.
So what happens is that we build it and potatoes not meeting the quality specs and it required more potatoes for the same throughput. So that was very different than a year ago. I think the good news is that that was -- that ended in the quarter. That's not something that is progressing. We've seen that the crowd come back and the tables are in good shape. So we don't think we have a systemic issue here at all. We think it happened in the quarter, and it did have pressure to gross profit, but it is essentially behind us in isolated.
Yes. And the only thing I'll add is, obviously, as you think about the overall gross margin, while some of the input costs were obviously a little bit higher, you also saw us address that with productivity in the distribution line. So you saw distribution costs go down year-over-year, which doesn't show up in gross margin for us. So I think if you look at the total cost basket and kind of how we work as operators to make sure that we're keeping those things in balance, I think that the journey through the P&L is a little bit different, but I think we address cost with cost.
Your next question comes from the line of Scott Marks with Jefferies.
First thing I wanted to ask about is you called out in the prepared remarks some softness with On The Border and talked about how you've kind of isolated the issues and are actively addressing them. Just wondering if you can share some incremental color on what you're seeing with that brand and how you're thinking about those steps to correct the brand.
Yes. I think so the first thing I would say -- and I appreciate the question. First thing I would say is, look, we don't believe that we have any sort of a structural issue with On The Border. I think it's a great brand for us. It's a business that we've been growing over time, and we have a great deal of confidence that the issues that we're having are relatively short term in nature. And it's a couple of things. One is, obviously, regionally, we're seeing some greater consumer value seeking behavior both up and down the price ladder. And so, we have some regional brands that have showed up that we are addressing -- that we're addressing in the near term. And then we had a short-term issue that I don't really want to go too far into that we were able to identify early in Q3 that we had to -- that we needed to address, and we are actively addressing an isolated issue, and you should see correction beginning in Q4 and into next year. But I think overall, we feel very good about the tortilla chip business and just some short-term noise.
Understood. Next question from me would be just on Boulder Canyon. It sounds like it was another strong quarter, and I think you noted some shelf space being awarded for 2026. Wondering if you can kind of help us understand, is that kind of in expansion geographies? Is that in core geographies with incremental products or categories? Just trying to get a better sense of how those wins are coming about.
Yes. So I appreciate the question, we feel very good about the momentum on Boulder Canyon. And obviously, it will -- it continues to drive a lot of growth for us. And it's really driven by, obviously, the consumers looking for better-for-you credentials and great tasting products. And over the last year-to-date, we are -- it is the #1 potato chip brand in the natural channel. And we actually have the #1 SKU in the channel over all time periods for 13, 26 and 52 weeks. So that business is growing really nicely, and I expect it to continue. If you look at the quarter, it is being driven by both velocity and distribution gains. Velocity in the natural channel about 35% in the conventional channel up almost 200%. And you -- but you can also see the ACV where we are today is really only around 50%, 52% versus, say, a brand like us at a little over 80%.
So as you look into next year, we expect to continue to enjoy broader-based distribution gains across channels and geographies. We have a great deal of confidence and visibility into those opportunities. It will be predominantly getting our actual assortment correct broadly and actually driving data chips into those markets. And then innovation, which we'll share a little bit more with you in February, will also follow because I think one of the things we're most pleased with is our partners in both natural and conventional are supporting this brand, and we're able to continue to sustain the momentum in both sides, which is obviously a little bit unusual, but an area that we take very seriously and making sure we're investing in growth.
Your next question comes from the line of Robert Moskow from TD Cowen.
I wanted to ask, Howard, about how you viewed your biggest competitors' lineup of new products for next year. They're adding a new sub-brand that's natural colors. They're adding a protein chip line and a package redesign. Do you see this having an impact on the category next year? Is it a positive? And do you think in the fight for shelf space, does it influence what you're able to get in any way?
Yes. So look, a couple of things. I think that, broadly speaking, any time the category leader is active in trying to grow the category, it's a net positive for all of us. I think that what you look at this brand -- this category over time, it is an innovation and communication that has really kind of driven consumer interest and appeal. So I think that regardless of who the competitor is, if they are able to bring more shoppers down the aisle, that is a net positive for us and for the category. I think as you look at what does that mean for us, I think there are a few things that retailers like about our business. One is that we are generally incremental. Two is that we actually bring investment and support through a hybrid model that can get it through DSD or DTW. And third is that we all can see the same data sets now of what our products are doing in their stores. And so I'm not concerned that we can't get the distribution gains that we have.
We certainly have not heard from any retailers that, that has been an issue because I think that they are -- that our core offering and our partnership continues to grow and mature. And I think that, that will -- that should continue to yield the types of gains that we have been expecting that's allowed us to grow 200 to 300 basis points faster than the category. So I think overall, I would view it as a net positive thing. Obviously, communication and innovation are always uncertain, and we'll see how the consumer responds to all of the offerings across all the category participants next year.
Okay. And I know you got asked this last quarter, but protein chips, there's clearly a significant pocket of demand for that type of product. And I want to know if your thinking on that subcategory has evolved in any way and maybe just discuss that.
Yes. I mean, look, I think that if you were to look at sort of the consumer trends right now that are out there, protein, non-seed oil, portion control, substantial snacking are all areas that we continue to understand the consumer is looking for and are seeking to try to address. I think when we get to February, we can show you how we think about addressing all of those subcategories as we talk about our innovation lineup. But certainly, as a consumer marketing guy, I want to sell the products to consumers that they are most interested in and be able to sort of drive the trend, which is kind of what you're seeing right now in non-seat with Boulder. So more to come on innovation, but it is certainly an area that we are paying attention to.
Your next question comes from John Baumgartner from Mizuho.
I'd like to ask about next-generation productivity. I guess as savings migrate down to more normalized levels as a percent of COGS, maybe the dollar amount of savings moderates. But how should we think about the ROI from new productivity initiatives elsewhere, whether it's on sales growth, volumes, in-store execution? I mean I'm guessing there's benefits outside of pure dollar savings from new technology. So I'm curious your thoughts, your view on implications for the top line.
Yes. So I mean, I can start and then offer to BK. Look, I think a lot of what we've done on the productivity line, to your point, has been really around getting the supply chain consolidation and modernization investments done. I think we still continue to have opportunities in our ways of working and equipping our independent operator partners with better information on how to execute sales and make our assortment and our display activity further impactful. I think it winds up -- it should be a top line enabler over time. And I would anticipate that, that's going to be part of the way that you'll see us continue to outperform the market as we continue, call it, a couple of hundred basis points better than the category. I think in the near term, what I would offer you is that we have a lot of work that we are completing, and you'll start to see that productivity step down to at or above world-class levels, still at that 3% to 4% and the rest will kind of communicate as we understand it. BK, anything?
Thanks, Howard. That's a great point for us, and I'll just build on Howard's points. It's what we kind of call our second wave of value capture. If you think about kind of within the supply chain and outside the rest of the company, there are still areas that we continue to grow. On the supply chain side, obviously, we have opportunities in the indirect procurement that we've done in direct procurement. We have opportunities in working capital and inventory management. If you think about the DSD network that we have and continue to optimize our transportation and logistics, that's helpful to us.
And then within the 4 walls of manufacturing plant, I think the team will take the next step on OEE improvement, predictive maintenance, et cetera. And then as you kind of expand outside the supply chain, parts of the business that others of us drive, you can think about automation and data leverage, whether it's RPAs and analytics and bots, the advanced demand thinking tools that are out there, self-serve analytics, digital twin modeling, I can go on and on, but there is a [ plethora ] of opportunities for us to continue to drive productivity at very high levels.
Your next question comes from the line of Jim Salara from Stephens.
Howard, I wanted to dig in a little bit on some of the market share dynamics because I've been impressed by the continued gain, obviously, in expansion, but maybe even more so in core where you guys have a lot more visibility and awareness. Can you just kind of walk through where you're seeing that incremental market share pickup in the core market? And is there maybe an opportunity as we think about retailers really fine-tuning what they have on shelf to make sure they're capitalizing on any pockets of growth. Is there maybe opportunity to continue to see sustained share gains in the core market?
Yes. I mean -- so a couple of things. I think, as you know, our strategy has been to hold the core and then grow through expansion markets. And obviously, to your point, we are pleased with that we're actually taking share in our core markets as well. Not surprisingly, when you look at our original strategy, we had said that really our core market is most significantly in Utz market and that the opportunity was to continue to expand our assortment of our Power Four Brands into the core geography. And as you look at kind of this year, obviously, Boulder Canyon is a significant contributor to the core, along with Utz pretzels and cheese, I think also continue to be areas where we're seeing some better performance. So I think what you're seeing is just our portfolio shifting in the core a little bit and that the benefit of Utz, the breadth of our portfolio is actually coming through in that market share performance.
I think the other thing that is helping us is that the convenience store channel continues to improve, we're by no means where we need to be yet. But as that becomes less negative, it actually also continues to help us as we look at overall market share. I think longer term, it is the one geography where we are most linked to the category. It's kind of really the only one. And so, I think what you'll expect to see us do is what will drive our share is innovation, communication and assortment to drive it further. But I think we like the notion of over the long term, if we can hold there and get our expansion markets growing faster, that you'll continue to see the performance that we're getting.
Great. And then maybe as a follow-up, you guys called out Florida, Illinois, I think Colorado and Missouri as expansion markets that are above 4%. We talked a little bit about Florida already, but maybe if you can just highlight, are there any kind of idiosyncratic, whether it's brands or consumer kind of consumption patterns in those states that drive that share 100 basis points ahead of kind of the average expansion market share?
Actually, not really. I mean, generally speaking, they tend to -- those 4 markets obviously are some of our fastest growing. They're averaging about 6%, 6.4% growth across them. And what we wanted to highlight is that we're getting -- after we get distribution gains in some of our older vintage expansion markets that we are continuing to show and sustain growth. I do think in those markets, what is true is we do have very strong relationships with the national retailers and our IOs in those markets. And so we continue to see very good execution there. And I think that the nature of our relationship with those retailers is actually what you continue to see. They continue to reward us with space, and we continue to invest and make sure that we're participating in their category growth, and it's kind of working for everyone.
Your next question comes from the line of Rupesh Parikh from Oppenheimer.
So I guess just going back to the salty snacks category. I know it's obviously still a challenge out there. But as you guys look forward, are there any green shoots or anything that gives you optimism as you look out in the coming quarters?
Yes, look, I think I continue to believe and have been a salty bowl. I think that it's a great category, and I think it's probably the best in food. And I continue to look at household penetration as the first place that I would look at is, are consumers coming and participating in this category more this year than they did the year before and the year before that? And I think the answer to that continues to be yes. It's not immune to the dynamics of the market and the consumer environment. But on average, when consumers are choosing how to invest their money into an affordable indulgence, they continue to choose salty more than they did the year before. So I think in that regard, I remain very optimistic about where the category is.
I think second is, as you look at the category progressing, we did say that we thought that the category would get better, would progress through the course of the year and become less negative. Obviously, we thought we'd be more flattish in the year, so we're a little off of that. But you do see that the category has been improving through the course of the year, which I also think is a net positive. And then the last thing I'll say is that if you look at category participants, we have always been an innovation and communication brand-led category, and that continues to be the case. The pricing environment remains rational. You're not seeing things that are -- that don't make sense. And I think you're seeing some of the drivers that have always driven this category coming back more to the front. So overall, I feel pretty good about where the category is going. Obviously, it's been an uneven category for the last couple of years, but I continue to be very, very optimistic about the future of this portfolio -- this category and this portfolio.
Great. And then maybe just one follow-up question. You guys also talked about some of your marketing efforts and also noted that I think you plan to increase your investments in retail media. So just curious what you're seeing there in terms of effectiveness and returns on your efforts with retail media?
Yes. So a couple of things. Obviously, we committed at Investor Day to 40% marketing investment year-over-year-over-year. Last year, we delivered 68%. This year, year-to-date, we're right around 30%. And that is really being driven by the consumer pressure. Our strategy has always been that we'll build the business overnight and our brands over time, and that we'll be flexible about where we make those investments in any given quarter. And so a, we looked at this quarter and we look at some of the distribution gains we had and some of the opportunities that we had to invest in retail media, they were the place that we prioritized. We, by no means, have a lack of investment -- high ROI investment opportunities that we can make but we'll always be choiceful in what we're doing first. And this quarter, it made more -- it made a lot of sense for us to invest in the retail pressure that we could get as consumers are in-store and making choices. So you'll continue to see us making investments in consumer media, and you'll continue to see that 40% kind of progressing into 2026.
Your next question comes from the line of Peter Grom with UBS.
I wanted to ask maybe 2 related questions on the category. One more from an innovation perspective and maybe more just how you're seeing it going forward. So more just kind of a follow-up to Rob's question, which I thought was a good one. You talked about this a little bit in your prepared remarks around highlighting fewer ingredients, removing artificial dyes and kind of the protein dynamic that you alluded to earlier. I guess my question is, do you think this innovation can actually move the needle and drive an improvement in category growth as we look out to '26? And then just related, you touched on kind of the sequential improvement, albeit maybe at a slower pace than you anticipated. Do you have any preliminary views on the category or industry as we look out to '26?
Yes. So look, I think I'll start with the innovation question first. The short answer is yes, I do actually think that innovation can help move the category. I mean it's -- I think that what you really -- when you look at innovation, what you're really trying to do is to drive consumer engagement in the category. And so a consumer may buy a new product and then pick up a normal bag of whatever their typical repertoire is and they haven't been down the aisle in a little while. I think that, that always helps with consumer interest in keeping the assortment fresh and keeping news coming through. So I do think that it can help drive the category. Obviously, the category is large, and it has a lot of traditional portfolio of offerings and those offerings also need to be healthy and growing.
And part of that is, I think, what you're talking about in terms of ingredient simplification, artificial flavors and colors. Those are frankly the need not only addressing what consumer interests are in, but also making sure that this category overall and obviously, our products remain on trend and allow consumers engagement in potentially a modestly different way. I mean, a reminder, 80% of our portfolio already exists as no artificial flavors or colors. And so, we'll continue to highlight those credentials as we go forward across our range. I think as you look at our future innovation path, there are opportunities to get new consumers into the portfolio potentially weren't there before. As we're entering into new geographies, I think innovation is a piece of the story, but our core assortment and its trial and repeat rates are very strong. And so, getting those products in front of the consumer also will be critically important to our top line growth. So yes, I think it can help. I think the whole portfolio story has to continue in order for the category to grow significantly over time. And I feel pretty good that that's where we are taking steps to do.
[Operator Instructions] And with no further questions in queue, this is going to conclude our conference call. You may now disconnect.
Utz Brands Inc — Q3 2025 Earnings Call
Financial data from Utz Brands Inc
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 1,453 1,453 |
2%
2%
100%
|
|
| - Direct Costs | 1,152 1,152 |
24%
24%
79%
|
|
| Gross Profit | 301 301 |
39%
39%
21%
|
|
| - Selling and Administrative Expenses | 266 266 |
36%
36%
18%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 36 36 |
54%
54%
2%
|
|
| - Depreciation and Amortization | 36 36 |
0%
0%
2%
|
|
| EBIT (Operating Income) EBIT | -0.60 -0.60 |
101%
101%
0%
|
|
| Net Profit | -29 -29 |
260%
260%
-2%
|
|
In millions USD.
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Utz Brands Inc Stock News
Company Profile
Collier Creek Holdings is a blank check company, which engages in effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The company was founded by Roger K. Deromedi, Jason K. Giordano, and Chinh E. Chu on April 30, 2018 and is headquartered in New York, NY.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Friedman |
| Employees | 3,200 |
| Founded | 1921 |
| Website | www.utzsnacks.com |


