Hanover, PA's Utz Brands Inc. (NYSE: UTZ), a leading U.S. manufacturer of branded salty snacks, reported the unaudited financial results for the company’s fiscal 2021 third quarter, ended Oct. 3.
Net sales in the company's third quarter increased 26.1% to $312.7 million, compared with $248.0 in the third quarter of 2020. The increase in net sales was driven by acquisitions of +25.1% and organic net sales growth of 1%. Organic net sales growth was driven by favorable price/mix of +4.2%, and this was partially offset by volume declines of (2.2%) and the company’s continued shift to independent operators and the resulting increase in sales discounts associated with this that impacted net sales growth by (1%). Excluding the impact to net sales from the shift to independent operators, Organic net sales would have increased 2% versus last year.
Utz's gross profit was $102.6 million, or 32.8% as a percentage of net sales. Adjusted gross profit increased 12.7% to $111.8 million, or 35.8% as a percentage of net sales, compared to adjusted gross profit of $99.2 million, or 40.0% as a percentage of net sales, in the prior-year period. The decrease in AGP as a percentage of net sales was primarily driven by higher commodity, transportation, and labor inflation, which are collectively the result of industry-wide supply chain challenges.
“Consumer demand remains strong as our sales growth accelerated and we delivered two-year market share gains in the third quarter. Our top-line strategies are working as we drove faster growth on our Power Brands, expanded our presence in key salty snack sub-categories, improved our performance in our core geographies and the mass channel, and continued our geographic expansion,” said Utz chief executive Dylan Lissette.
“As we face rising inflation that is impacting earnings in the short-term, we continue to implement pricing actions that will have a carry-over benefit in 2022," Lissette continued. "And while we expect high inflation and transportation challenges to continue into 2022, we are actively deploying our value creation strategies, and we remain confident in our long-term growth outlook.”
