Utz Brands Aims for 2025 Growth: Can EBITDA Targets and Expansion Fuel the Snack Giant?

Utz Brands (NYSE: UTZ) has laid out an ambitious roadmap for 2025, targeting 8-10% growth in adjusted EBITDA alongside low-single-digit organic sales growth and 10-15% adjusted EPS expansion. The company’s strategy hinges on leveraging volume-driven promotions, geographic expansion, and productivity savings. But with salty snack categories under pressure and investor skepticism evident in recent market reactions, can Utz deliver?

EBITDA Growth: A Core Focus

Utz’s first-quarter results provided a glimpse into its capabilities. Adjusted EBITDA rose 3.9% to $45.1 million, with margins improving by 30 basis points to 12.8% of sales. The full-year EBITDA target of 8-10% growth relies heavily on further margin expansion. Management expects a ~100 basis point improvement in EBITDA margins by 2025, driven by productivity savings and a better product mix.

The company’s cost-cutting efforts are a cornerstone of this plan. A $150+ million cumulative productivity savings target from 2024–2026 (up $15 million from prior guidance) includes supply chain overhauls like a new rice distribution center and expanded production lines. These investments have already boosted kettle chip capacity by 35% and pretzel efficiency by 15%, underscoring Utz’s operational discipline.

Sales Growth: Volume vs. Pricing Challenges

While Utz’s Q1 sales rose 2.9% organically, the path forward is uneven. Volume/mix gains of 6.3% were partially offset by a 3.4% pricing decline due to bonus pack promotions—a strategy to drive volume in a slowing category.

The company is betting big on geographic expansion. In its core 20-state market, Utz holds a 6.5% share of salty snacks, but in expansion states, it’s just 3.0%. Retail volume in these newer markets surged 8.9% in Q1, suggesting untapped potential. Meanwhile, its Power Four Brands (Utz®, On The Border®, Zapp’s®, and Boulder Canyon®) grew 1.7%, outperforming the overall category’s 1.7% decline—a critical win in a tough market.

Financial Leverage and Risks

Utz aims to reduce its net leverage ratio to ~3.0x by year-end 2025, down from 4.0x in Q1. A refinancing of its $630 million Term Loan B will lower annual interest costs by ~$1.6 million, easing pressure on margins. However, the company’s $172.2 million in liquidity (as of Q1) must weather risks like input cost inflation, tariff volatility, and competitive pressures.

Investors appear wary: shares fell 7.75% in premarket trading after Q1 results, reflecting doubts about sustaining growth amid pricing cuts and category softness.

Conclusion: A Recipe for Success or Overpromising?

Utz’s 2025 targets are aggressive but grounded in tangible strategies. The $150 million productivity savings and expansion into underpenetrated markets provide a clear path to margin improvement. The Power Four Brands’ outperformance in a shrinking category is a positive sign, as is the 8.9% volume growth in expansion states.

However, risks loom large. The salty snacks category’s decline—driven by broader consumer spending trends—could test Utz’s promotional strategies. If pricing cuts erode margins faster than cost savings offset them, the 8-10% EBITDA target could falter.

The verdict? Utz’s operational execution and geographic expansion give it a fighting chance. If it can sustain volume growth while managing input costs and leverage, the 2025 goals are achievable. But investors should watch closely for signs of margin resilience in the coming quarters. The stakes are high, but the snack giant’s path is set—and its results could make or break this salty bet.