UTZ Brands Q2 Earnings Miss Estimates; Shares Fall 7.5%

Shares of UTZ Brands (UTZ) fell 7.49% to close at $19.27 yesterday. The manufacturer of branded salty snack products delivered mixed second-quarter results, which were impacted by higher inflation and resulted in a spike in key input costs.

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Revenue fell 4% year-over-year, landing at $299.2 million and coming in above consensus estimates of $290.29 million. Adjusted EPS, on the other hand, totaled $0.13, worse than the $0.15 a share expected by analysts.

CEO Dylan Lissette has warned that costs could remain at elevated levels for the remainder of the year. (See UTZ Brands stock charts on TipRanks)

Lissette stated, “As we manage through these higher costs, we remain focused on the long-term health of our brands, and we continue to prioritize investments to capitalize on our growth opportunities.”

During the quarter, UTZ Brands realized approximately $13 million in cash proceeds from asset sales. The company also executed a sale-leaseback transaction as it seeks to recoup $13 million from prior capital expenditures.

While UTZ expects consumer demand for its products to be high in the second half of the year, it remains concerned about challenges pertaining to supply-chain dynamics. Higher commodity transportation and labor costs are additional major headwinds.

Considering “increased supply chain cost inflation”, UTZ expects adjusted EBITDA for the year to be between $160 and $170 million. Adjusted EPS is expected to range from $0.55 to $0.60, below consensus estimates of $0.69.

Last month, Oppenheimer analyst Rupesh Parikh reiterated a Buy rating on UTZ stock and cut his price target to $27 from $29, implying 40.11% upside potential to current levels.

Consensus among analysts is a Strong Buy based on 4 Buys. The average UTZ Brands price target of $27.50 implies 42.71% upside potential to current levels.