Company: UTZ
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001739566-25-000111
Chunk: 84

Company: Utz Brands, Inc.
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 84
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 continue to seek out convenient, delicious snacks for both on-the-go and at-home lifestyles. A 2025 study from Circana cites that 48.8% of consumers snack three or more times a day, up 2.7 points versus 2024. Additionally, the salty snacks category has historically benefited from favorable competitive dynamics, including low private label penetration and category leaders competing primarily through marketing and innovation. We expect these consumer trends to continue to drive consistent retail sales for salty snacks for the foreseeable future.

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For the thirteen weeks ended March 30, 2025, U.S. retail sales for salty snacks based on Circana data decreased by 1.7% versus the comparable prior year period while Utz's retail sales were flat.

Competition – The salty snack industry is highly competitive and includes many diverse participants. Our products primarily compete with other salty snacks but also compete more broadly for certain eating occasions with other snack foods. We believe that the principal competitive factors in the salty snack industry include taste, convenience, product variety, product quality, price, nutrition, consumer brand awareness, media and promotional activities, in-store merchandising execution, customer service, cost-efficient distribution, access to retailer shelf space. We believe we compete effectively with respect to each of these factors. We also source nearly all of our inputs domestically within the United States, therefore, we may be less impacted by international pricing volatility and tariffs as compared to other multi-national salty snack food companies.  Additionally, beginning in 2024, certain competitors began to take certain discrete pricing actions in specific channels, resulting in an environment that has become far more promotional. Such promotions have impacted our sales and, in response, we have increased our promotional activities. We expect these pricing and promotional activity dynamics to continue in the near-term.

Operating Costs – Our operating costs include raw materials, labor, manufacturing overhead, selling, distribution, and administrative expenses. We manage these expenses through annual cost saving and productivity initiatives, sourcing and hedging programs, pricing actions, refinancing and tax optimization. Additionally, we maintain ongoing efforts led by our transformation office, to expand our profitability, including implementing significant reductions to our operating cost structure in both supply chain and overhead costs.

Financing Costs and Exposure to Interest Rate Changes – As of March 30, 2025, we had $739.3 million in variable rate indebtedness, up from $690.1 million as of December 29, 2024. As of December 29, 2024, our variable rate indebted