Hanover, PA-based Utz Brands Inc. (NYSE: UTZ), a leading U.S. manufacturer of branded salty snacks, reported the unaudited financial results for the company’s fiscal second quarter, ended Jul. 4, 2021.
For the 13-week period, ended July 4, Utz's retail sales as measured by IRI MULO-C increased 6.5% on a two-year CAGR basis. The company’s Power Brands’ retail sales increased 8.1% on a two-year CAGR basis versus the salty snack category growth of 7.1% for the same period, increasing to nearly 87% of sales versus approximately 84% in the same period in 2019.
Power Brands’ sales growth during the two-year period was led by Utz, On The Border, Zapp’s, TORTIYAHS!, Golden Flake Pork Skins, Hawaiian, TGI Fridays and Herdez. The two-year CAGR retail sales decline of 2.2% in Foundation Brands reflects the company’s continued strategy to focus its resources on its Power Brands.
Net sales in the quarter increased 23.1% to $297.9 million, compared with $242 in the second quarter of 2020. Gross profit was $95.6 million, or 32.1% as a percentage of net sales. Adjusted gross profit increased 16.6% to $105.4 million, or 35.4% as a percentage of net sales, compared to adjusted gross profit of $90.4 million, or 37.4% as a percentage of net sales, in the prior-year period.
“In the second quarter, our two-year pro forma net sales growth trends continued to improve as our Power Brands’ sales grew significantly faster than the salty snack category in our emerging and expansion geographies, and our channels most impacted by COVID-related softness are rebounding," said Utz chief executive Dylan Lissette.
"While consumer demand for our products remains strong, our second quarter margins were significantly impacted by higher than planned inflation across key input costs which include commodities, transportation and labor," he added.