Utz Q2 2026 earnings: Adjusted margins rise despite a GAAP loss

Utz Brands (NYSE: UTZ) reported fiscal Q2 2026 net sales of $371.8 million, up 1.4% from $366.7 million, while reported diluted EPS fell to $(0.11) from $0.12; adjusted EPS increased 11.8% to $0.19. For the quarter ended June 28, 2026, branded salty snacks and pricing supported revenue, but lower volume/mix, higher reported SG&A expenses and weaker operating cash flow complicated the overall result.

Core earnings results

Organic net sales also increased 1.4%, with favorable net price realization of 3.6% partially offset by a 2.2% decline in volume/mix. Adjusted profitability improved because productivity savings more than offset supply-chain cost inflation, although the company reported a GAAP net loss.

The distinction between reported and adjusted results was substantial this quarter:

Utz’s non-GAAP measures exclude items that can be significant, including depreciation and amortization and certain stock-based compensation, hedging, impairment and transformation-related costs. They should therefore be considered alongside the reported results rather than as replacements for them.

Business and segment performance

Branded Salty Snacks, which represented 89% of total sales, remained the primary growth driver. Organic sales for the business increased 3.3%, led by Utz, On The Border, Zapp’s and Boulder Canyon—the company’s “Power Four” brands.

By contrast, Non-Branded & Non-Salty Snacks organic sales fell 12.1%. Utz attributed most of this decline to the accelerated elimination of low-margin non-branded products. This portfolio action reduced sales but supported the company’s emphasis on more profitable branded business.

The underlying demand data were mixed. Branded Salty Snacks retail sales increased 0.3%, trailing the overall salty-snack category’s 0.8% growth. Utz’s retail volumes fell 4.6%, compared with 1.1% category growth, partly because the company was comparing against its prior-year Bonus Packs promotion. Excluding that promotion, net price realization increased 3.0% and volume/mix declined 1.6%.

The Power Four brands performed better than the broader portfolio, with retail sales up 2.0%. Utz also reported retail sales gains in its expansion geographies, although it did not provide a specific growth rate for those markets.

Adjusted margin gains contrast with the GAAP loss

Reported SG&A expenses rose 15.1% to $101.3 million and increased to 27.2% of sales from 24.0%. Adjusted SG&A, however, was nearly flat at $67.9 million, while its share of sales edged down to 18.3% from 18.4%. The company attributed the adjusted expense leverage partly to sales growth, with increased marketing providing an offset.

This gap contributed to sharply different reported and adjusted outcomes. Reported EBITDA fell 55.5% to $17.4 million, while adjusted EBITDA rose 14.4%. The year-over-year GAAP comparison was also affected by a $12.5 million warrant-liability remeasurement gain that benefited the prior-year quarter.

Adjusted gross margin provided the main operating support. Productivity savings more than offset supply-chain cost inflation, allowing adjusted gross margin and adjusted EBITDA margin to expand even though reported gross margin declined slightly.

Cash flow and balance sheet

Quarterly operating cash flow declined, but adjusted free cash flow improved to nearly break-even from a $10.6 million outflow a year earlier. For the first 26 weeks of fiscal 2026, Utz used $0.5 million of operating cash, compared with $3.9 million used in the prior-year period. First-half capital expenditures were $27.4 million, dividends and distributions totaled $18.8 million, and adjusted free cash flow was $(26.6) million.

Utz ended the quarter with $212.7 million of liquidity, including $58.6 million in cash and $154.1 million available under its revolving credit facility. Net debt was $791.0 million, while the net leverage ratio improved by 0.6 turns to 3.5 times trailing 12-month adjusted EBITDA of $226.3 million.

Pending take-private limits forward visibility

On July 20, 2026, Utz agreed to a transaction under which subsidiaries of Intersnack Group will acquire all outstanding Class A shares for $14.25 per share in cash. If completed, Intersnack and the Rice and Lissette Family entities will each own 50% of the private company.

Utz expects the transaction to close in the fourth quarter of 2026, subject to closing conditions. Because of the pending deal, the company is no longer providing updates to its 2026 outlook and did not hold a conference call for the quarter. Investors therefore have less quantitative information about expected second-half performance than they would receive in a typical reporting cycle.

Recent insider transactions

The supplied insider data identified the following latest 10 open-market purchases. Separate entries dated April 23, 2026 were zero-cost director stock awards, but quantities were not provided, so they are not included below.

These transactions describe the reported activity but do not, by themselves, establish how insiders assessed the company’s future performance or valuation.

Risks investors need to watch

• Volume pressure: Overall volume/mix fell 2.2%, and branded retail volumes declined more than the broader category. Continued dependence on pricing could constrain sales if volume weakness persists.
• Reported profitability: Higher reported SG&A and the absence of the prior-year warrant-liability gain contributed to a GAAP loss, despite growth in adjusted earnings.
• Supply-chain inflation: Productivity savings offset cost inflation during the quarter, but adjusted margin expansion depends partly on maintaining that balance.
• Cash flow and leverage: Adjusted free cash flow improved, but first-half free cash flow remained negative and net debt totaled $791.0 million.
• Transaction execution and limited guidance: The take-private remains subject to closing conditions, while the lack of updated 2026 guidance reduces visibility into second-half operating trends.

Summary

Utz’s fiscal second quarter combined modest, price-led revenue growth with stronger adjusted margins and adjusted earnings. Branded salty snacks and productivity savings supported the result, while lower volumes, weakness in non-branded products and higher reported expenses weighed on GAAP profitability. The main operating questions are whether Utz can stabilize volumes and convert margin gains into stronger cash flow, while the pending Intersnack transaction now shapes the company’s near-term disclosure and ownership outlook.