Dive Brief:
- Food manufacturer Utz held firm in its 2025 financial guidance in its Q1 earnings report, aiming for net sales growth in the low single-digits.
- Given that the company sources nearly all of its inputs domestically and operates all factories in the U.S., CEO Howard Friedman said in a statement Utz expects to incur only a “modest impact” from the tariffs on its business.
- The CEO also applauded the company's plan to save $150 million by 2026 through a supply chain overhaul, surpassing an earlier $135 million savings estimate, as another factor helping Utz weather the tariff volatility.
Dive Insight:
Utz's confidence stands in contrast to other food manufacturers that are cutting their forecasts as a result of the Trump administration's tariff policies.
Kellogg announced on Wednesday that it was cutting its annual financial outlook amid ongoing tariffs and falling sales. “Our 2025 financial outlook now includes a modest impact from tariffs, primarily related to the sourcing of raw materials outside of North America, and assumes that most of our production remains exempt from tariffs on imports from and exports to Canada and Mexico,” Kellogg said in its quarterly report.
Hershey, meanwhile, is asking the Trump administration to exempt cocoa from tariffs. The company expects to incur between $15 million and $20 million in tariff-related costs during Q2 as it works through its cocoa inventory. But as those supplies dwindle, it expects costs to rise to $100 million in the second half of the year.
Utz is leveraging its flexibility and domestic supply chain, including through expanded manufacturing and distribution capacity. The company opened a new distribution center in Hanover, Pennsylvania, in January, as well as a new kettle production line in North Carolina in February and a pretzel line in Hanover in March.
Utz operates eight primary manufacturing facilities in Washington, Arizona, Pennsylvania, Michigan and North Carolina.
The company's net sales were up slightly for the quarter to $352 million, while its adjusted net income was up 7.2% year over year to $22.3 million.
"Looking ahead to the remainder of 2025, we expect that our strong productivity cost savings will continue to give us the flexibility to build our brands and expand our margins," Friedman said in a statement.
