HANOVER, Pa. - Utz Brands, Inc. (NYSE: UTZ), a prominent U.S. manufacturer of branded salty snacks, has revised its financial outlook for the full year 2024. The company now expects organic net sales growth to be between 2% and 2.5%, a decrease from the previously forecasted 3%. This adjustment is attributed to a more competitive promotional environment anticipated for the latter half of the year.
Despite the moderated sales growth outlook, Utz has maintained its projections for other key financial metrics. Adjusted EBITDA is anticipated to increase by 5% to 8%, and adjusted earnings per share are expected to grow by 28% to 32%. Additionally, the net leverage ratio is projected to be around 3.6x at the end of the fiscal year.
The company's CEO, Howard Friedman, acknowledged the shift in consumption trends due to consumers seeking greater value, which has led to a more competitive promotional landscape. He emphasized that while Utz will adjust its promotional activities to align with consumer expectations, it will continue to prioritize building sustainable long-term demand for its products.
Friedman also highlighted the company's productivity cost savings, which have provided the flexibility to expand margins and invest in brand support and geographic expansion. He expressed confidence in Utz's position to achieve its 2026 targets, previously outlined at the company's Investor Day in December 2023.
The revised outlook is based on unchanged expectations for the year, including an effective tax rate of 17% to 19%, interest expense of approximately $47 million, and capital expenditures ranging from $80 million to $90 million.
Utz Brands, Inc., with a diverse portfolio that includes Utz®, On The Border® Chips & Dips, Zapp's®, and Boulder Canyon®, among others, distributes its products nationally across various channels. The company operates multiple manufacturing facilities across the U.S. to meet customer demand.
This article is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties. Actual performance and results may differ materially from those projected due to various factors, including but not limited to changes in consumer preferences, competitive actions, and economic conditions.
In other recent news, Utz Brands has been in the spotlight due to a variety of developments. Piper Sandler has maintained an Overweight rating on the company, expressing confidence in Utz Brands' potential to meet or exceed its 2024 financial goals. This confidence is based on strong sales momentum and opportunities for improved margins.
In leadership changes, Utz Brands has seen the retirement of Michael W. Rice from its board of directors, with William B.J. Werzyn Jr. stepping in to fill the vacancy. Rice will continue to contribute as an observer on the board, while Werzyn brings his entrepreneurial experience to the table.
The company also reported mixed results for its second quarter of 2024, but remains optimistic about future growth. The leadership cited strategic geographic expansion and a focus on high-margin products as key drivers for their positive outlook. Earnings per share (EPS) guidance increased due to tax rate adjustments and a decrease in core depreciation and amortization expenses.
Utz Brands also highlighted the strong performance of its Power Four brands and expressed confidence in their long-term sales growth outlook of 3-4%. Despite slower sales under the Zapp's brand and potential pressure on sales of family-sized snack items, the company is prepared to compete in a more promotional market. These recent developments paint a picture of a company that is navigating the challenges and opportunities of the current business environment.
InvestingPro Insights
As Utz Brands, Inc. navigates a shifting market landscape, the company's financial metrics reveal a nuanced picture of its performance. With a market capitalization of $2.53 billion, Utz trades at a significant earnings multiple, reflecting investor expectations for future growth. Specifically, the P/E ratio stands at a lofty 352.75, which could indicate a high level of investor confidence in the company's long-term prospects.
InvestingPro data points to a slight contraction in revenue growth over the last twelve months as of Q2 2024, with a decrease of 0.36%. Despite this, the company's gross profit margin remains robust at 33.36%, suggesting that Utz is maintaining profitability in the production of its branded salty snacks. This is further supported by the company's EBITDA growth of 4.69% during the same period, indicating effective cost management and operational efficiency.
From an investment standpoint, Utz has demonstrated a commitment to returning value to shareholders. This is evidenced by a dividend yield of 1.32%, and the company has raised its dividend for four consecutive years, signaling confidence in its financial health and cash flow stability. Additionally, Utz's liquid assets exceed its short-term obligations, providing further reassurance about the company's liquidity and ability to meet its immediate financial commitments.
InvestingPro Tips for Utz Brands highlight that while analysts have recently revised their earnings estimates downwards for the upcoming period, the company is still expected to be profitable this year. For investors seeking more in-depth analysis, there are over 10 additional InvestingPro Tips available, offering detailed insights into Utz's financial health and market position.
For those interested in exploring these insights further, they can find additional InvestingPro Tips on the company's profile at https://www.investing.com/pro/UTZ, which may provide valuable information for making informed investment decisions.
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