Q3 2025 Utz Brands Inc Earnings Call - Pre-Recorded

Speaker #1: Discussion of our third quarter 2020 earnings results. Joining me on the call today are Howard Friedman, CEO, and BK Kelly, EVP and CFO.

Speaker #1: In addition, this morning at 9:30 a.m. Eastern Time, we will host a live question and answer session, which you can access via webcast on our Investor Relations website.

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #1: 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.

Speaker #1: Good morning , everyone , and thank you , Trevor . I'll kick off today's call with our third quarter business update , after which we will provide detailed financial commentary .

Speaker #1: Before we get started, I would like to thank all of our hard-working associates across the country for their dedication to us.

Speaker #1: The results we have achieved this year are indicative of your commitment and hard work . To start , I'd like to touch on some exciting news .

Speaker #1: We completed the acquisition of Insignia International's direct store delivery assets, which represents a major step in our westward expansion strategy and unlocks significant opportunities in California.

Speaker #1: This acquisition gives us established SD routes across California and strengthens our Midwest presence through Insignia's distribution infrastructure . California represents the largest salty snack market in the US , at $4.1 billion in retail sales .

Speaker #1: Yet we currently generate about $79 million . There , representing just 1.9% market share . When you compare that to our expansion market average of 3% share or Florida , where we've achieved 4.3% share .

Speaker #1: You can see the substantial white opportunity ahead of us . We look forward to beginning the rollout of our brands on these new routes in early 2026 , and expect our California expansion initiative to help sustain our above category organic net sales growth .

Speaker #1: Our top-line performance remains strong this quarter, with net sales growth of 3.4%, led by branded salty snacks, and organic net sales growth of 5.8%.

Speaker #1: Please note that, as there were no acquisitions or divestitures impacting third quarter organic net sales, growth is equal to reported net sales growth.

Speaker #1: This marks our seventh consecutive quarter of growth in branded salty snacks and an improved mix shift, as our branded salty snacks portfolio now represents 89% of our total net sales, marking our ninth consecutive quarter of share growth.

Speaker #1: Regained both dollar and volume share in the salty Snacks category for the 13 week period ended September 28th , 2025 , as measured by Sakana Mulo with convenience , our performance was again driven by the momentum of our power four brands , our strong consumption results reflect sustained momentum of Boulder Canyon , strong gains and expansion geographies , including from us , our largest brand and targeted promotional investments .

Speaker #1: We posted 4.8% dollar consumption growth in the quarter, driven by 3% volume growth compared to the category's 0.2% dollar decline. Our Power Four brands increased 7.1% in retail sales dollars, driven by 4.4% volume gains.

Speaker #1: We believe that Sakana 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 5.8% in the third quarter .

Speaker #1: Now, turning to our core geographies, we captured both dollar and volume share relative to the salty snacks category. Total company retail sales dollars in core geographies increased 1.7%, with Power Brands leading at 3.1% versus the flat total salty category.

Speaker #1: Performance total company retail volumes increased by 1.1% , while power four brands performed even better at 2% , outpacing the categories 1% volume decline , while Boulder Canyon was the leading growth driver in core markets , we also saw dollar and volume share growth in Zapp's potato chips .

Speaker #1: Utz Pretzels and Utz Cheese. Momentum in our expansion geographies continues this quarter, with total company and our Power Four brands capturing both dollar and volume.

Speaker #1: Share . We achieved strong total company retail sales growth of 9.2% , which significantly outpaced the salty snack category decline of 0.3% in these markets , driven by ongoing distribution gains and higher velocities .

Speaker #1: Brands contributing to our growth and expansion markets included Utz , Boulder Canyon , and Golden Flake . Pork rinds . Our expansion geographies represent 45% of total company retail sales for Circrna data , reflecting our sustained progress , we believe the growth runway remains substantial as our market share average of 3% in expansion markets versus 6.6% 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 .

Speaker #1: The average growth of these four markets on a 52 week basis , according to to Mulo , with convenience , averages 6.4% year over year .

Speaker #1: We believe this demonstrates that some of our larger expansion markets are continuing to show healthy growth , well above the category the California investment .

Speaker #1: I discussed earlier represents an acceleration of our westward expansion strategy. California's scale as the nation's largest salty snack market represents approximately 10% of national consumption, creating a unique opportunity to apply our expansion playbook in a larger market.

Speaker #1: We're confident that the acquisition of Insignia's DSBs assets provides the foundational infrastructure to accelerate growth in a market where our current 1.9% share sits well below our expansion market average, reinforcing the significant white space opportunity that lies ahead.