Utz Brands Reports $1.41 Billion in Net Sales, Faces Revenue Decline

Utz Brands, Inc. reported a net sales figure of $1.41 billion for the fiscal year ending December 29, 2024, a decrease of 2.0% from the previous year's $1.44 billion. The decline in revenue was attributed primarily to the sale of the Good Health and R.W. Garcia brands, which accounted for a 3.3% reduction in sales. Despite this, the company experienced a favorable volume/mix increase of 1.5%, although this was offset by a slight decrease in net price realization due to a competitive promotional environment. Gross profit for the year rose to $494.8 million, resulting in a gross profit margin of 35.1%, up from 31.7% in the prior year, driven by improved productivity and ingredient cost deflation.

In terms of operational changes, Utz Brands has been actively restructuring its distribution network, transitioning from company-owned routes to independent operators (IOs). As of December 29, 2024, nearly all of the company's direct-store-delivery routes were managed by IOs, which has led to a reduction in selling, distribution, and administrative expenses. The company also made significant divestitures, including the sale of its manufacturing facilities in Lincolnton, NC, and Lititz, PA, for a total of $167.5 million, which contributed to a gain of $44 million recognized in the financial statements.

Utz Brands has focused on product innovation, particularly in its Boulder Canyon brand, which saw a 32.7% growth in the natural channel during 2024. The company launched new flavors and expanded into the cheese snack subcategory, reflecting its strategy to cater to consumer preferences for better-for-you snacks. The company’s marketing expenditures increased to $17.8 million, with a significant portion directed towards digital and social media initiatives aimed at enhancing brand equity and driving sales growth.

Looking ahead, Utz Brands aims to continue its growth trajectory by expanding its presence in under-penetrated markets and enhancing its product offerings. The company plans to leverage its established distribution network and invest in marketing to capture a larger share of the $39 billion U.S. salty snacks market. However, the company remains cautious about potential challenges, including rising labor costs, inflationary pressures, and the competitive landscape of the snack food industry, which could impact profitability and market share.