Utz Brands' stock falls after snack maker is latest company to cut sales guidance due to cautious consumer

By Ciara Linnane

Consumption trends slowed in the current quarter as consumer value-seeking behavior led to discounting, says CEO

Utz Brands Inc.'s stock fell 1.5% Thursday, after the savory snacks maker cut its fiscal 2024 sales guidance to reflect a slowdown in the third quarter as consumers cut back on spending.

The Hanover, Pa.-based company (UTZ) said it now expects organic net sales-which exclude the impact of currency and acquisitions-to grow 2.0% to 2.5% in fiscal 2024, down from prior guidance for growth of about 3%.

The company is still expecting adjusted per-share earnings to grow 28% to 32%.

Chief Executive Howard Friedman said the company had a strong first half and was able to benefit from distribution growth opportunities.

"However, our consumption trends in the third quarter to date moderated more than we expected due to a more competitive promotional environment primarily in response to consumer value-seeking behavior,": Friedman said in prepared remarks.

"We will continue to make appropriate adjustments to our promotional activities to meet consumer value expectations but will remain disciplined and focused on building sustainable long-term demand."

The company offered the update ahead of a presentation at the 2024 Barclays Global Consumer Staples Conference later Thursday.

Friedman said the company's cost savings give it the financial flexibility to expand margins and increase investments in its brands to support geographic expansion.

The company is still expecting to meet 2026 targets that were provided an a December investor day.

In its most recent earnings report for its fiscal second quarter, Utz had adjusted EPS of 19 cents that were ahead of the 16-cent FactSet consensus. Sales of $356.2 million matched the FactSet consensus.

The stock has gained 8.7% in the year to date, while the S&P 500 has gained 15.5%.

-Ciara Linnane

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09-05-24 1425ET

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