UTZ - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone, and welcome to Utz Brands Fourth Quarter and Full Year 2024 Earnings Conference Call. I'd now like to hand over the call to Kevin Powers, Head of Investor Relations.

Kevin Powers

With me on today's call are Howard Friedman, CEO; and Ajay Kataria, CFO. I hope everybody has had a chance to listen or read our prepared remarks and also view our presentation, all of which are available on our Investor Relations website.

Before we begin our Q&A session, just a few housekeeping items. differ of our today business current actual results some statements contain and that future on based view may note our will comments forward-looking the Please materially. of our materials. filings, in Please see uncertainties could this more financial certain detail future affect measures, identify discuss earnings principal Today, will or risks in that we which performance. adjusted our and the which SEC recent non-GAAP are morning's described materials and Reconciliations financial earnings contained and in associated other are on of disclosures posted non-GAAP measures website. our our

are operator, line Now open for questions. ready we to up the

Operator

[Operator Instructions] Lazar Your first Barclays. Andrew question comes from from

Andrew Lazar

Maybe value And to off, does share markets as in is core plan holding what 'XX? embed growth outlook in your of your out sort expansion category kick Day? it the at Investor that value was fiscal expanding assumption laid also for share Howard, while

Howard Friedman

through and our is marketing I think X% flattish. it, point markets intact. think And hold to we to Look, year. through will To as intend next in market strategy the the distribution slightly year, actually X% core around I our relative our to gains call your We think our to continue so category be progress somewhere than it better going share come expansion hold. remains support and strategy, and on take grow increased

Andrew Lazar

competitiveness confidence a seen gives the and a and from price light out the sluggish headwind you modest in in in what you're Utz know well? increased for enough you've I prepared for called data is guess 'XX. looking I as some category of building we've flexibility what as remarks, the fiscal still in that

Howard Friedman

of a we things are look at. there that think couple I

pack significant I ladder. deliver impacts some down to will be price. price we're drags and the necessarily pricing. architecture think engaged price be We working We're value First those don't in beyond on to able up to to a all, sell of bonus bags. We've looking believe

normalize eventually, as behavior. of right that progressive would mid we I more always happened participants believe category expect the think think to the a saw we category about the of lap motivating the part to participate thing second the that and sort the is to as how on through take having the what you will category, the year year. buy has as in the of price a we and innovation in march And really which And year you this think the shopper I been marketing end went if you and is promotional category, assortment. stock

Andrew Lazar

the I mind, first Anything terms discrete just where keep that know top we growth. in half, in specifically second the you has recent of the like looked on some expect aware data around the as to for top even given line XQ line that. should category be around as of of pretty half well

Howard Friedman

Yes.

for recall that XXXX you'll X%. over where think we year, a our little I strongest was month us, the actually of grew January of

expect would which largely anticipated We we improve had of would have continue as to see and the to promotionally nature So beginning decline we we expected. given continue is really a year to that January through lap, was QX the January or in go driven. as

Operator

Bank Peter of comes next Your question from from Galbo America.

Peter Galbo

will prepared better of on you cadence? us gave a track the it in that further Maybe non-salty us. breakout kind to versus of scanner an of just realignment there allow of breakout point of a Will clarifying think salty also data. relative to all branded remarks, or behalf start non-branded on kind the ask to that quarterly said you today I the historically a be the

period, there's that. test allows at if least longer just to So a historical us

be if plan. your that's ask one would that or just So

Kevin Powers

the of provide to happy in to of terms for the sales last that. net year. Absolutely, we than plan we X more do Yes, are historical will breakdown those quarters first components

Peter Galbo

there that, on I then of and questions back the promise actual are in here. And

now, Howard, than weakness Just But persisting don't it you like for feels that when this quarters. the dips anything quarter next lap spreads know over anticipated. in longer you'll maybe that do you lap and been I discrete that's if few fully there's happened the there

Howard Friedman

through It occur, last when the where the sort started beginning and half of assortment the back progressively we've to year. decisions see then had May really become it a some lapping should is headwind as we year, will in improve of

Peter Galbo

you channel can dynamics in given certainly or your But just the It within of that slides. out you there. follow-up kind increased competitiveness, level on called It all was like one in shifting you core that the specifically. coming areas kind of had then second there of seems And weakness. of seems bigger the address was that just from particular, the competitor like in that tortilla Howard, maybe portfolio. some tortilla your some chips, category chips, more biggest of maybe

Howard Friedman

Yes.

assortment. the think issue chips and we've saw issue been we was that, an the tortilla made quarter not lapping really more that Peter. anything I choices There's on than in really of discrete some with significant

chips the enjoy specifically border I continues on strong to tortilla consumer think reception.

now talked more I price on we that the But last lap question, obviously consumption year, well. the about that in a really as you with prior at January, lot where really believe about really sharp that doing it's that have We it's of with think bonus seen February is have we would some business improvement. December, point. a we're activity packs

As that, we to would strong. be expect we lap continue it to

Operator

Cowen. question next Moskow from Your comes from TD Robert

Robert Moskow

of couple A questions. quick

And sales What blocks bit, comfort margin? that are still this that EBITDA expand? though the even what said are decelerate XXXX. First big on track you margins to in even you a gives year building for exceed expanding is,

things each just So had how do then we I disassociate follow-up. these X other? a from And

Ajay Kataria

in What you're similar XXXX, see 'XX. to very going to

what through $XXX strong. going is in in then more and similar investments our to margin. million we productivity Investor of going to net X-year 'XX have pretty at expansion. capabilities $XX chain sight over 'XX. basis Our out we or to algorithm productivity and productivity 'XX delivered now called is of generates be We sort points program XX-ish about We to remains supply the Day. margin make and The of out about million be EBITDA of of period 'XX, gross our line

Robert Moskow

Is X investments giving that center? the there any anything distribution it Is strong specific really that it capital call the you can stand X such as productivity? like out? plant? there new things you Is like or to out what's Is at

Ajay Kataria

are All of we making capital the in above, our network. investments

driving driving in our leveraging that and You've at capacity We'll out seen 'XX. capital automation. 'XX. the in of plants more fixed in fixed costs costs continue It's pace or do our The sort that investments us is further. spreading

lot done have We So of it. that's around just one RDC distribution our logistics. of then procurement, around And December. work piece center opened we a in

that's and there. So multiple in inventory buildings consolidating

lot of into a in lot chain, going that continue lift and in 'XX, a work that's was 'XX. supply that So heavy done of process should

Howard Friedman

feel network automation on. getting order, couple investments we made One network. start about possible are and And across the chain distribution will of to was was make the Two that progress efficient schedule which our optimization supply in delivered think our the ahead on network to actually as was efforts. optimization costs get in total we we've was making sure of lower things. in our really, predicated footprint a and I great you recall, it as to

to as things us you you it that RDC look doing, If a we've sort capacity or be been at to products look to of done lot well. they're we've you like sold allows of actually the produce at the closer that the look where and automation at expansion able

So the are half last thing we're understanding the last, a online past And taking more better that of this that We're comes make call system as would and at next understanding of road. I product some and and efficient are a actually getting really just there's of we been has overall. benefits year. out that, continue the efficient way. the that it, us And I back over of we And say year the will far doing business demand. it into off do in first that more coming effective half lot our waste is think

schedule think chain. So I we're supply on ahead of

good apply have another that to consistent to done And probably a have year more X.X of much a I of younger, to effort continue still we work. efficient to more get make accelerate to overall. we've think frankly, we we years before modernized, lot that network

Robert Moskow

put was down, in follow-up, for the the maybe think, it an prepared quarter. My the XX% the It there business? you fourth side in but non-branded outlook I is of remarks,

includes dips I that think also. the

double-digit expect impacting So in another decline should sales? your 'XX we

Howard Friedman

I been we're that we see which the like that The pretty will and should is salsa of it impacting decline side be we've IOs, expect on of was our been you our our and carefully not important business, we which dips on not for answer no, and double-digit but well, businesses to managing a go. has good moving continue and you our of of feel us part Part those sales. as lap place type consumer that But our should another as business saw decline we the short forward. in it non-branded control,

Operator

Michael from question from next Your Lavery Sandler. Piper comes

Michael Lavery

look Can some some maybe little touched if a You for timing also those of and incremental just of and pack margin on what, on impact And you consumer? price have? the maybe adjustments. might maybe may touch that architecture some that any, bit unpack the SKUs how

Howard Friedman

a also Look, architecture of I and price. are things really trade pack in of think terms there a class of It's price a couple question. it's

have business. out business able continue on value you We've price fortunate. to the we been and on add architecture, basically We're more see XX% is to the in think what chips bags pack the potato bonus also to expand in distribution. to right I marketplace, chips now the be tortilla

to on lower point a sure we're making thresholds hitting pack price have the sizes of of critical and lot we right and appropriate the certain classes emphasis sure that sort in We are of steps latter. on make trade putting that price

of. just So we're those more things, really I think pushing

price say actually when is going about help bit actually Club, of you to see will other be which thing better. the think I as The is with of a well little you're convenience at end MULO kind high to us would C+ read the able ladder us

there a selling in well. see as you'll step-up So

So I the it, you'll across see entire think, ladder.

our think it, I mean, I'll largely margins. view terms In contemplates impact guidance the is margin, our of the answer that Ajay let but of I

Ajay Kataria

Yes, it does.

models. understood carefully put that mix have the and in impact We our

Michael Lavery

you guidance, expansion? expansion. Just into for might a follow-up be to say, maybe sort of on expectations investments needed might move, be what geographical touch Can example? baked especially maybe what for on distribution further west, And

Howard Friedman

Yes.

and last interest and of the lot our club, see continue One but I year the regionally. as a is we think national saw mass to larger enthusiasm things not of we through grocers obviously, rest you work continue with in only to of portfolio

think through distribution, started year, so kind for you back the And saw of the to end of half the the really as of I building gain what last through September really of end the year. we year

you'll We've invested going about. It's the so to Colorado that we've out in in We've Texas. well. in same continuation geographies see Michigan. historically invested And of more invested as be talked West. a We've

And quarter see last the of have nicely. year. so what Power that in our And this coming I quite you'll brands expansion geographies seen more was in think growing our you X you saw

year So we would to see the in more that come. expect to of

awareness. lot to not you point guide. a the last XX% saw a new to In because more that's step-up spending much year about relatively in year promotional what do, our of of why we're market. kind need the and fiscal as that consumer it's initial part It's of you terms remember, And price of

sure our will advertising that add distribution, As incremental to we consumers find brands. then make those to can we gain markets

Operator

Your next Dickerson Jefferies. from question comes from Robert

Robert Dickerson

quickly, I your to now. dynamics kind taking I guess, channel Howard, on just just get of wanted any place perspective

understand Do be of of seasonal you we period of get view some to just little maybe improvement, of bit we kind you a purchase as smaller head the channel could more sizes? general kind how bonus do hopefully, Just to into consumers more bag channel? think the buying kind rates. are of maybe the do the peak pack C-store through on relative consumer behavior and there kind you Trying as think of summer,

Howard Friedman

things. of I couple Yes. appreciate Look, the question. a

I things. to going of think, through first of a all, channels, of couple kind tick of a I'm couple

what's on really I think in grocery. been feel about traditional going good we

well. We be We biggest opportunities We go in outperform to brands the as work growth continue of and continues forward. extremely our it well there well. and our we to understand one perform category

similarly, think expansion to I continued club. going in and you're see movement

make we for to that We very that the sure right assortment are sure our have the and with items that make club to and pay working when hard they inventory partners want try made they're us the C-store products course a question our challenge no year the for we of get for that past. selling. persistent been has the There's of decisions in can more where through that consumers

not that call to be to, this channel moved reflected and it, to that when through data would expect we we expect as things we return from now. year, in get year have We have we go growth would those the to the We call quickly would improve modest as will a that like. as

terms promotion the shopping down ladder. the think you shopping seeking, of I them to to you value and to In continue see behavior, continue you consumer continue and and promotional see activity see up

you for find If point that. an can you looking are price relative low a cost, absolute at

as the or lumpy. consuming it it we a being maybe itself actually cost in for That year. certainly and see one consumers in out that be the up well. and taking as the more penetration through cases, for been think really which the being sort and you're is minute, say well for as If buy promotional doing the per causing category the I would mix you a in will has market see bit cost the kind I the holiday, interesting you category ounce The multi-buy really go afford been of then lower is the rate a they're lift a for can thing as can of of inventory, purchases inventory little out you looking it's year, household as promotional to when and buying other

Robert Dickerson

I to companies in number spend. kind from a kind a some lumpiness of that week Then point. promotional spoke kind to maybe architecture, up Earlier competitor. of spoke smaller of sizes. introducing pack speak the also to of to did then you last follow quite just We hear that this to And some of frankly, SKUs food pack price hear and

like kind that know not much what's real of lumpiness promoting about you're So sounds of effect. the driving it it's more it we just other maybe viewing how But to demand product be to also the talk maybe is given be collectively? net offerings. efficient to pricing kind as also I

Howard Friedman

needs hitting pack, make I think want a shopper an in that price sure that of a why important as you're price making price of money fixed you the think is your for us we are to absolute with who's that demands, all money amount sharp your that's move. we about amount point which in an fixed to if wallet sure of cover your on going absolute is you point as basis wallet, you're because

that price to at make that that think, point that we you buy in to products there's fortunate when I you are assortment, an a can which and look we're multi-purchase a a lumpiness, sure seeing have of Some enough have consumer of occasion. multi-buys, that range it's at is

of always promoted in I category a for a, will same. important the brand innovation and We've bit little has building think I been what speaking, shopper think kind the so been which because relatively the So this is. set, lumpiness that's of remain still always lower

the I reason go be least is as think promotional my opinion, normalize think we in forward. there's year. And to moving believe, no intensity to will at that I different fundamentally this going category through

availability. important quality and communication remain think will pricing innovation, and with, obviously, along always I promotional

Operator

from Mizuho. Baumgartner John from comes Question

John Baumgartner

ramp in secondly, investments the as diversify concentration and you events? to sizes quantity increased Howard, I or it's and certain innovation there seasonals, we in and level, any given seen, we've for expecting the salty At from softness provided format? of terms I insights XXXX, in Any expand pack year-on-year wanted either relative the changes that And XXXX snacks terms concentration of a the in there? larger display or activity channels category notable history your seeing, are for any to promo. in should or are from touch then whether in allocations notable guess, expect the certain in on retailers particular, promotions non-price changes you planned to and

Howard Friedman

important think experienced that activity. is consumer obviously display we we thing expansion traction the cap from because not lot more hope for need. anything, especially core setting us, It's also of a not And great we to are way our price, one end on you're markets, activity I gain availability. only markets. as you're and for have in compete and a I to to the display customer but expansion the activity us for any if start seeing We in on And start that change them in sort us both and enter it's allocation seeing

terms Which display proud what this we go change the caps. of think, this I pantries. for the prove and have the like year. penetration in as something think is category product of household well that in be positive perimeter on So And we end should all a we continues seen of up and activity, be both that their want any for not consumers and I part category again, around as mindful is, continues to as to

In do traction non-seed coming, nutrition X. our year profile think given oils. we be around gaining Boulder what you the compete is how a Canyon brand to continue its terms of see that and Obviously, continue will continues will we to of about Core to think kind I is

passed to $XXX We business million see continue that growing year. just this obviously and past

we in us of expect So And classes some I forward. more consumer of think on drive seekers from brands value to should to we sell you'll we that branded good that Probably interest. also are, they products go to to the be and and innovation in that believe choose I more to able also I will. business, which we're that, we think you'll they think, and proud continue really us allow we other allow trade see do participate to continue activity as that salty other place see other and there will a

John Baumgartner

it's the M&A Then terms to of broader in curious, know deals I focused speak I am market. to in on But route of activity. terms and to capacity your last early portfolio, of couple

Boulder, category in you to point larger grow you the at are do Or take that's do at or future with and the this think the sufficient of As better at though might another the perceived to brands as look broader that stat space? of portfolio a you? stab need that as in organically changes, scalability some for feel the you

Howard Friedman

Yes.

So about place we have assembled you'll continue I different feel over other certainly message we broadly do some mean, to where to into that enter obviously, which is I buying And think the travel that consumers of same first, a do our and as do of and to have subcategories and to great see. to our XX speaking, permission we to respond incremental frankly, I'll we'll brands have believe last I marketing and what where continues a innovation, obviously, from a look, we've both that. the classes of we that as I us they have them. trade, flexibility from well of way, they feel consumers and different permission about and it the to able be the portfolio. they a into in about. portfolio terms brands would of of say in feel elasticity Boulder brands. can great be have and love is one lot them interested assembled go years, those like consumer

can In we of answer we we the yes there to out Look, then value, go that, ourselves there think and thing a But we our look good at And it. within if terms you And if in interesting, is the and do I'm at I going brand about I the we'll we that's there's pretty what's for or it? some to feel would our don't owners something marketplace. do it's be the first always is attention acquire out think better on work. pay existing ask like a should specifically that brand? of we will solid is necessarily say, out boy, portfolio, there that moment is excited and pretty whether portfolio would we don't

Operator

comes from Stephens question Salera James next Inc. Your from

James Salera

maybe flattish did I circle up 'XX should conversation how kind the the repeat think modestly. as of to would we might guys both add about in to wanted about category in beginning household new that repeat see back in impact you 'XX on of to Because I what the the obviously, you that outlook have that think penetration with we for rate a the increasing with If think 'XX. simultaneously, that just households, negative we in and But didn't 'XX? rate. the

market, be so the just those around detail give around helpful. And is the core same Just both any some And the color at composition What's in that maybe us that up there? time? market? driving would expansion

Howard Friedman

Yes.

the an would So very penetration I But portfolio. would the household that together for for will makes will and it and like metrics consumers products as diversity interested, we're that's we're super me actually that I marketing try you household that has higher. be think strong. time us. nervous. lie. agree both naturally with of high our penetration to no speaks seeing and say household quality expect our it pleased penetration is our things say what rises, all-time the of that, And We're I'm always they our moving not some experiencing. I that to not longer that going achieved math Every We

whole we geographies come range. we've been can our driven that Obviously, consumers able in able and try also expansion a and to of and part to So on caps a being entire offer is potato can them portfolio. then present do our of end chip by what

we how entering going of those very are of our goes into work we we the opportunities would about have So product continue I would year. markets year, the about some expansion also two markets. we've why in expect that that I good for feel done we're X feel that pretty into traveling together. markets momentum Obviously, And good say to past our things a distribution think of 'XX. of the core and we quality it the in quarter plans and the forward strategy the this to lot of

us talked on always in distribution those markets about, and assortment brands our been bringing them shifting core. those, a what X power other we're brands. we've the is always into As markets have the we're expansion and more bit And the for gaining for little core

So those X centerpieces together strategy. to things will continue expansion be to our

I should feel year strong penetration households like of overall. gains think we be next year another household and

James Salera

but outside channel? gears consumers to aware Then maybe could Boulder, over I just highest obviously, MULO+ which driving if Or Brands talk repeat Power a the you back the higher still and tie it Can there? that the XQ better in And it year of data that shelf XXX% becoming data to see available, little on the and appearing the rates shift slide bit, just are that trend. you portfolio? you first brands back, question. offer provided you just the you on see rates In what's that of data was in the deck Is up tie placement full if shelf it's it? repeat have natural you in on do over that

Howard Friedman

Yes.

In exciting we more story. in interest But I We're product of terms is it's Boulder, success think velocity-led the expanding consumer an probably as growth distribution obviously what continues fact that in that having to But back a to probably things great on our answer rates, get One grow. the gaining you you're are item. distribution need with the there's is to repeat of that happening. seeing two on. I

chip, January, but in be a proud are it So period. is was it #X always the yes, actually natural in we're bit for the want oil little chip And gaining so I but to certainly, last the the accelerating. careful, X and avocado channel of the distribution, weeks, it's we

get piece see And is and trend that very seeing are So with we think the that square oil that what in velocities a now actually strong. more and as the affordability. in of great the obviously is we're I interested oils, avocado consumers on better-for-you looking non-seed Boulder retailers The portfolio and item. loving product taste center delivers are at

Operator

the We don't have any moment. of questions as

We much today's for are now so closing questions. Thank call. floor you attending for the

Have disconnect. may You now a day. wonderful

Utz Brands (UTZ) 20 Feb 252024 Q4 Earnings call transcript