Utz Brands (NYSE:UTZ) executives told investors they are approaching 2026 with confidence in the company’s commercial plan while building flexibility into guidance amid what management repeatedly described as a dynamic competitive and consumer environment.
On the company’s fourth-quarter and full-year 2025 earnings Q&A call, CEO Howard Friedman and CFO BK Kelley fielded questions that ranged from promotional intensity and pricing strategy to distribution gains, innovation timing, and deleveraging expectations. Management also addressed localized impacts from a November disruption tied to SNAP and a government shutdown, and discussed how planned investments—particularly around a California expansion—factor into margin expectations.
2026 outlook: “Prudent” framing in a dynamic environment
In response to questions about heightened competitive posture from a larger salty-snack competitor, Friedman said Utz’s guidance contemplates a flat category and is designed to provide flexibility “given the variety of unknowns that may be out there in front of us.” He added that the company’s “confidence in our plan and our conviction in what we believe this business can deliver in 2026 has not changed.”
When pressed on why organic sales guidance at the midpoint appeared similar to what the company delivered in 2025 despite anticipated benefits such as California distribution and less of a headwind from non-branded/non-salty parts of the portfolio, Friedman emphasized conservatism tied to timing and uncertainty. “It’s February,” he said, and the company wants to be prepared for “a variety of outcomes,” with “appropriate contingencies to deliver against our promises.”
Margin and investment: California spend and cautious EBITDA expansion
Kelley said that at the midpoint of the company’s 2026 guidance, Utz expects roughly 40 to 50 basis points of EBITDA margin expansion. He noted this expectation includes the impact of a planned $4 million to $6 million investment in the California expansion.
Investors asked why the outlook did not imply more margin expansion given productivity expectations, and management’s answer centered on caution and the desire to retain flexibility. Kelley said the company’s productivity performance has been “very strong,” but that productivity is first used to “mitigate and manage through any inflation.” He added that while Utz does not see “abnormal inflation,” the company does see some inflation in ingredients, packaging, and labor.
Kelley also addressed below-the-line items affecting earnings per share, saying higher depreciation and amortization is expected to be about an $0.08 year-over-year drag. He also referenced a “little bit of a drag” from interest expense tied to replacing a swap as part of risk management, plus about a $0.01 impact from tax.
Pricing, affordability, and promotion strategy
Friedman highlighted ongoing work to strengthen revenue management capabilities and better understand how the “price ladder works” across the portfolio, including major brands such as Utz and On The Border (OTB). He reminded listeners that during 2025 the company focused on affordability and, through the first three quarters, had roughly a 1-percentage-point “investment in price,” with more positive pricing toward the end of the year.
Looking to 2026, Friedman said Utz expects to “play our role in the category” and be “prudent” in how it invests, while operating up and down the price ladder. He added that the company expects a “more positive contribution in both volume and price across the portfolio” in 2026 due to differences in commercial strategy.
Asked directly why modest pricing action (referenced as down 1% in 2025) is sufficient to improve affordability, Friedman said affordability has long been part of the company’s approach, with price points ranging from opening price points to premium offerings such as Boulder Canyon. He also said the company’s last price advance was in the latter half of 2022 and it had not changed pricing since then. Friedman emphasized that price is “just a piece of the equation,” adding that consumers will pay what they consider a fair price for innovation and products they value, and that competitive conditions appeared rational based on what Utz saw in the back half of the fourth quarter and early in the first quarter of 2026.
Distribution, California expansion, and innovation timing
Management repeatedly cited distribution gains as a key growth driver. Friedman said the company expects positive distribution gains in 2026, consistent with the last couple of years, both in expansion markets like California and within core markets as innovation rolls out and the company’s “Power Three” brands gain traction. He also noted that shelving associated with annual resets typically begins in February and March.
On California specifically, Friedman said the company will begin “putting product on shelves in the coming weeks,” and Kelley added that by the second quarter the company will have started California distribution, bringing incremental volume.
Friedman outlined expected cadence for volume drivers and innovation:
- Distribution gains are expected to build beginning in the back half of the first quarter as shelves reset and California expansion begins to show up in-store.
- Innovation is expected to start coming in the second quarter.
- Back-to-school timing can provide a second wave of visibility for additional gains in the back half of the year.
He also discussed a timing effect from lapping “bonus bags,” describing an expected 3-point positive to price and 3-point negative to volume through the first quarter and into April—“the reciprocal of what you saw last year.”
In discussing household growth, Friedman said expansion geographies represent about 45% of the business and are growing “significantly above” the company and category. He also said that in established expansion markets such as Florida, Illinois, and Missouri, the company is seeing “5.8% top-line growth,” driven by distribution gains and marketing support. California, which he described as “largely untapped,” was cited at 1.9% share today, with expectations for distribution to contribute both sales and incremental household penetration. Friedman added that repeat rates are “very strong” once consumers enter the franchise.
Consumer trends, disruptions, and portfolio themes
On a question about a November disruption tied to SNAP and a government shutdown, Friedman said Utz’s core-of-core geography—Maryland, Virginia, and the Washington, D.C. area—was disproportionately impacted given local population characteristics. He said that area represents about 20% of overall core sales.
Friedman also addressed broader consumer dynamics, saying Utz is seeing shoppers look for value and move “up and down the ladder,” and that the company believes it has growth drivers not solely dependent on macro conditions because of geographic white space, marketing investment, and an innovation lineup aimed at on-trend preferences.
Regarding portfolio direction, Friedman discussed themes such as protein, fiber, flavors, and portion control, and said the company is expanding into protein with offerings targeting 8 to 10 grams of protein in puffs and pretzels at an “affordable price point.” He also referenced Boulder Canyon’s expansion into “non-seed oil” and into additional subcategories, and mentioned Hawaiian as another brand with growth opportunity.
On Boulder Canyon’s planned beef tallow offering and other alternative oils, Friedman said Utz feels good about ingredient availability and does not anticipate supply problems, citing investments in integrated business planning and collaboration with customers and suppliers. He also said the company expects new items to be margin accretive, as consumers are willing to pay for premium ingredients, and that as higher-priced items grow, the portfolio should also see a positive price benefit.
Finally, Kelley addressed leverage expectations, noting Utz finished 2025 at 3.4x leverage after improving from 3.9x in the third quarter. For 2026, he referenced guidance of 3.0x to 3.2x and reiterated a long-term goal of 2.5x to 3.0x leverage. Kelley said the company expects to delever by about 0.3x to 0.4x per year over time and cited a free cash flow goal of $100 million, adding that the primary difference versus earlier expectations was a “higher starting point” at year-end, including the impact of having “a little bit less inventory out there.”
About Utz Brands (NYSE:UTZ)
Utz Brands, Inc is a leading U.S. manufacturer and distributor of salty snack foods, offering a wide range of products including potato chips, pretzels, cheese snacks, popcorn and tortilla chips. Headquartered in Hanover, Pennsylvania, the company markets its snacks under several well-known brands and serves grocery, mass merchandise, club, convenience and online retailers throughout the United States.
Founded in 1921 by Bill and Salie Utz as a small country store operation, the business expanded gradually through direct delivery to local customers and sales to regional grocers.
