Utz Brands (NYSE: NYSE:UTZ) delivered a financial outlook update for the full fiscal 2024 ahead of its participation at the 2024 Barclays (LON:BARC) Global Consumer Staples Conference.
The company revised its organic sales guidance down from roughly 3% to 2-2.5%, an adjustment attributed to a "more competitive promotional environment" that has led to "moderated consumption trends" for the brand.
Commenting on the outlook revision, analysts at Evercore ISI said they believe that Utz’s commentary “likely reflects moves from FLNA to regain market share through more aggressive promo and trade practices.”
UTZ shares fell 1.7% following Thursday’s market open.
During their conference speech, Utz’s CEO and CFO highlighted that the salty snack category has been more promotional than anticipated, with consumers increasingly looking for value through promotions and their choice of channels.
While Utz observed some improvement in category trends during August, they maintained a cautious outlook on the potential for a full recovery.
“We are executing well on our distribution growth opportunities, which we expect will continue into 2025 and beyond,” Utz Chief Executive Officer Howard Friedman said.
“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. "
The snack food maker also reiterated its outlook for adjusted EBITDA and adjusted earnings per share (EPS) growth in 2024.
Specifically, adjusted EBITDA is projected to increase by 5% to 8% for the year, while adjusted EPS is estimated to grow between 28% and 32%.
Its net leverage ratio is expected to be approximately 3.6X at year-end fiscal 2024.