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HANOVER, Pa. - On Thursday, Utz Brands, Inc. (NYSE:UTZ) reported better-than-expected third-quarter revenue and announced plans to expand its presence in California, the nation’s largest salty snack market.
The salty snacks manufacturer’s shares surged 8.45% in pre-market trading after the results.
The company reported third-quarter revenue of $377.8 million, exceeding analyst expectations of $374.48 million, while adjusted earnings per share of $0.23 met consensus estimates. Total organic net sales increased 3.4% YoY, with branded salty snacks organic sales rising 5.8%, outperforming the overall salty snack category which declined 0.2% during the period.
As part of its westward expansion strategy, Utz announced the acquisition of Insignia International’s direct store delivery distribution assets across California and the Midwest. The move targets California’s $4.1 billion salty snack market, where Utz currently generates approximately $79 million in retail sales, representing just 1.9% market share.
"Utz delivered another quarter of strong performance, demonstrating both top-line and adjusted earnings growth," said Howard Friedman, Chief Executive Officer of Utz. "We achieved Net Sales growth of 3.4%, Branded Salty Snacks Organic Net Sales growth of 5.8%, and gained both dollar and volume share in the Salty Snacks category, marking our ninth consecutive quarter of volume share growth."
The company raised its 2025 organic net sales growth guidance to approximately 3%, up from its previous expectation of 2.5% or better, while reaffirming its outlook for adjusted EBITDA growth of 7-10% and adjusted earnings per share growth of 7-10%.
Adjusted EBITDA increased 11.7% to $60.3 million, representing 16% of net sales compared to 14.8% in the prior-year period. The improvement was driven by adjusted gross profit margin expansion of 210 basis points to 41.1%, which more than offset increased investments in capacity expansion and higher selling, distribution, and administrative expenses.
BK Kelley, EVP and Chief Financial Officer, noted: "We believe our various working capital initiatives, in combination with Adjusted EBITDA growth, will contribute significantly to our deleveraging efforts as we finish the year."
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