Utz Brands Posts Strong Profit Growth Despite Sales Headwinds

HANOVER, PA – January 12, 2026 – Utz Brands, Inc. (NYSE: UTZ) signaled a year of resilient profitability and market share gains, releasing preliminary fourth-quarter and full-year 2025 results that showcased significant earnings growth despite facing macroeconomic pressures that dampened net sales.

The Hanover-based snack giant projected its fourth-quarter Adjusted EBITDA would surge between 17% and 21% to a range of $62 million to $64 million. For the full fiscal year 2025, Adjusted EBITDA is expected to rise 8% to 9%, landing between $216 million and $218 million. This robust profit performance came even as net sales growth was more modest. Preliminary fourth-quarter net sales are estimated at $342 million to $343 million, a slight organic increase of 0.3% to 0.6%, while full-year net sales are expected to be approximately $1.44 billion, representing 2.4% to 2.5% organic growth.

The results paint a picture of a company successfully navigating a complex consumer landscape, prioritizing operational efficiency to bolster its bottom line while its brands continue to win over shoppers at the shelf.

Navigating Economic Headwinds

A key takeaway from the preliminary report was the divergence between strong consumer purchases and the company's reported net sales. CEO Howard Friedman addressed this directly, noting that fourth-quarter retail sales grew a healthy 3.5%. However, net sales, which reflect shipments to retailers, lagged behind.

"Net Sales lagged our strong Retail Sales as our channel partners reduced inventories during the second half of the quarter due to a variety of factors including SNAP payment delays and the government shutdown," Friedman stated in the announcement.

This inventory "destocking" by retailers reflects a cautious approach in response to perceived economic instability. Research from financial institutions like BofA Securities has highlighted the impact of macroeconomic pressures on consumer spending, specifically pointing to a temporary reduction in SNAP benefits in late 2025 as a factor weakening consumption. When consumers have less disposable income, retailers often pull back on orders to avoid being overstocked.

However, Friedman provided a crucial piece of context, adding that "Shipment trends normalized as we exited the year." This suggests the inventory issue was a temporary, fourth-quarter event rather than a sign of waning long-term demand for Utz's products, a point that has been a focus for analysts dissecting the report.

A Story of Market Outperformance

While net sales faced temporary headwinds, data from the checkout counter tells a story of significant market share gains for Utz. The company's portfolio of branded salty snacks grew retail sales by 3.5% in the fourth quarter, handily beating the broader salty snack category, which grew a mere 1.1% in the same period, according to Circana data.

The full-year comparison is even more stark. Over 52 weeks, Utz's branded retail sales climbed 2.9% to surpass $1.8 billion, while the overall category declined by 0.5%. This outperformance was also evident in volume, where Utz saw a 3.4% increase, compared to a 0.9% volume decline for the category as a whole. This indicates that Utz is not just raising prices but is successfully selling more bags of its snacks to more consumers.

Driving this growth is the company’s "Power Four" brand portfolio, which includes Utz, On the Border, Zapp’s, and Boulder Canyon. This core group saw its retail sales increase by an impressive 5.3% in the fourth quarter and 5.0% for the full year, demonstrating the strength and consumer loyalty these key brands command in a competitive marketplace.

Profitability and Financial Discipline Shine Through

Perhaps the most significant achievement highlighted in the preliminary results is the company's progress on profitability and financial health. The double-digit growth in Adjusted EBITDA for the fourth quarter points to the success of internal strategies focused on boosting efficiency.

"We continued to execute well on our productivity and operational efficiency programs," Friedman noted. This sentiment was echoed by CFO BK Kelley, who emphasized the impact on the company's balance sheet. "The Company made significant progress on Adjusted EBITDA Margin expansion in the fourth quarter and throughout 2025," Kelley said. "Our strong improvement in cash generation allowed us to exit the year at approximately 3.4x Net Leverage."

This reduction in the net leverage ratio is a key metric for investors, indicating that Utz is effectively managing its debt and strengthening its financial foundation. The focus on accelerating free cash flow, as mentioned by Kelley, signals a continued commitment to this discipline. Further underscoring this confidence, Utz recently announced a 3.3% increase in its annual dividend, a move often interpreted as a positive signal from management about the company's future earnings potential and stability.

Wall Street Reacts with Cautious Optimism

Following the announcement, Wall Street analysts digested the mixed report, acknowledging the impressive profitability while tempering expectations due to the softer-than-anticipated sales figures.

Several investment firms adjusted their price targets downward but maintained positive long-term ratings. Analysts at BofA Securities, for instance, kept a "Buy" rating on the stock but lowered their price target, citing the fourth-quarter organic sales miss against their expectations. They acknowledged, however, that the macroeconomic pressures and SNAP benefit timing were key factors and that the normalization of shipment trends was a positive sign.

Similarly, analysts at Mizuho reaffirmed their "Outperform" rating, expressing confidence in Utz's rare ability within the food industry to sustain both volume growth and margin expansion. Their price target was also adjusted to reflect reinvestment plans and a cautious outlook on 2026 EBITDA growth. The consensus among analysts covering the stock remains a "Buy," though the company's stock traded down in pre-market hours as investors weighed the sales slowdown against the profit surge.

Investors and analysts will get a chance to engage directly with management at the ICR Conference in Orlando this week. The market is now looking ahead to February 12, 2026, when Utz will release its full, audited financial results and, most importantly, provide its detailed guidance for fiscal year 2026. This future outlook, combined with more details on strategic initiatives like the planned expansion into California in early 2026, will be critical in shaping the investment narrative for the year ahead.