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J & J Snack Foods Reports Fiscal 2025 First Quarter Revenue Growth of 4.1% to $362.6M

1. JJSF's Q1 net sales rose 4.1% to $362.6M, driven by varied segments. 2. Gross profit margin fell to 25.9%, impacted by cost inflation and product mix. 3. Board approved a $50M stock repurchase over two years to boost shareholder value. 4. Foreign exchange challenges affected earnings, particularly in Mexican Peso transactions. 5. New leadership roles aim to enhance operational effectiveness amid margin pressures.

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FAQ

Why Bullish?

The stock repurchase authorization demonstrates confidence in long-term growth, akin to previous buybacks boosting share prices.

How important is it?

Financial performance and stock repurchase plans are critical for JJSF's market perception and shareholder sentiments.

Why Long Term?

Investments in efficiency and new leadership roles are likely to pay off over time, similar to past strategic enhancements.

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JJSF
Announces $50M Share Repurchase Authorization February 03, 2025 16:15 ET  | Source: J & J Snack Foods Corp. MOUNT LAUREL, N.J., Feb. 03, 2025 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ: JJSF) (the “Company”) today reported financial results for the first quarter ended December 28, 2024.   First QuarterActuals$ v. LY% v. LYNet Sales$362.6M$14.3M4.1%Gross Profit $93.9M($0.7M)(0.7%)Operating Income$6.2M($3.4M)(35.6%)Net Earnings$5.1M($2.1M)(29.4%)Earnings per Diluted Share $0.26($0.11)(29.7%)    Adjusted Operating Income$8.2M($5.4M)(39.7%)Adjusted EBITDA$25.3M($4.9M)(16.3%)Adjusted Earnings per Diluted Share$0.33($0.19)(36.5%) This press release contains non-GAAP financial measures. Please refer to the Non-GAAP Financial Measures section below for reconciliations to the most comparable GAAP measures. "J & J Snack Foods total net sales increased 4.1%, reflecting continued growth across all three business segments,” stated Dan Fachner, Chairman, President, and CEO. “Top-line performance was driven by strong fiscal first quarter sales in Frozen Beverages, solid sales growth across most core products in Food Service and strength in frozen novelties sales in Retail Supermarket. However, our performance was impacted by a less favorable sales mix namely related to our bakery and churros business, along with input cost inflation that was not fully covered with price increases. And although we delivered strong earnings improvement in Frozen beverages, foreign exchange headwinds associated with the Mexican Peso limited the improvement. Overall, gross margin declined to 25.9% from 27.2% compared to the prior year. The gross profit decline along with higher operating expenses ultimately impacted our bottom-line for the quarter. “Despite these near-term challenges, we are confident in our ability to address short-term margin pressures and improve profitability in the coming quarters through a combination of incremental pricing actions, which have taken effect in the second quarter, and by further driving efficiencies across our supply chain. To support these initiatives, we recently expanded the responsibilities of two of our veteran corporate leaders to take on the newly created roles of Chief Customer Officer and Chief Operating Officer. These positions will have global responsibilities for the J&J customer portfolio and supply chain operations, respectively, which will improve communication, sharpen decision making, and accelerate business performance. “We also announced that our board has approved a new $50 million stock repurchase authorization that is effective for two years, reflecting our confidence in J&J's long-term value, as well as our strong balance sheet and liquidity position. Our approach will be opportunistic, and the extent of our repurchases and the timing will depend on market conditions, regulatory requirements and other factors. We may repurchase shares in the open market, through private transactions, or otherwise, including through Rule 10b5-1 trading plans. The authorization is consistent with our capital deployment discipline and focus on driving shareholder returns. We see many positive market catalysts in fiscal 2025, particularly in movie theaters where our customers are expected to benefit from a much stronger film slate, as well as other exciting new opportunities to drive growth across retail and foodservice. As we look ahead, the resilience of our diversified product portfolio and the ongoing success of our long-term strategy position us well for sustained growth. With a strong balance sheet, a talented team, and a commitment to innovation, we are well-positioned to extend our growth to create long-term value for our stakeholders." First Quarter Highlights Net sales increased 4.1% from the prior year quarter to $362.6 million from a combination of volume growth and price increases. Key highlights include: Food Services segment sales were 4.5% above Q1 ’24.Retail Supermarket segment sales were 2.2% above Q1 ’24.Frozen Beverage segment sales were 4.0% above Q1 ’24.Dippin’ Dots sales were 8.4% above Q1 ’24. Gross profit as a percentage of sales was 25.9% in Q1 ’25, compared to 27.2% in Q1 ’24, reflecting a less favorable product mix, foreign exchange impacts, and input cost inflation, partially offset by pricing. We experienced significant inflation in chocolates, eggs, and proteins, that was only partly offset by deflation primarily in flour and dairy. Although we achieved pricing to offset some of the cost pressure during the quarter, we did not fully cover the impact. We have implemented additional pricing action in the second quarter for select categories that will help to further mitigate input cost inflation. Total operating expenses of $87.7 million represented 24.2% of sales for the quarter, compared to 24.4% in Q1 ’24. Distribution costs represented 10.9% of sales in the quarter, versus 11.6% in the prior year period, with the decrease largely driven by our strategic initiatives to improve logistics management and from start-up impacts at our regional distribution centers last year.Marketing and selling expenses represented 7.9% of sales in both the current quarter and in the prior year period.Administrative expenses were 5.2% of sales in both the current quarter and in the prior year period. Operating income was $6.2 million in the first quarter of fiscal 2025, compared to $9.7 million in the prior year period. This led to net earnings in Q1 ’25 of $5.1 million, compared to $7.3 million in Q1 ’24. Our effective tax rate was 27.2% in Q1 ’25. Food Services Segment First Quarter Highlights Q1 ’25 food service sales totaled $238.9 million, or an increase of 4.5%, compared to Q1 ’24 sales of $228.6 million.Soft Pretzel and Frozen Novelties sales increased 4.8% and 9.8%, respectively. Churros sales declined 9.2% as we lapped the benefit of limited time offer volumes for a quick service restaurant last year. Handheld and Bakery sales increased by 7.5% and 6.6%, respectively.Sales of new products and added placement with new customers were approximately $7.2 million, driven primarily by the addition of churro related products and new distribution of cookies.Q1 ’25 operating income decreased 72.2% to $1.7 million versus the prior year period, driven primarily by product mix and input cost inflation. Retail Supermarket Segment First Quarter Highlights Q1 ’25 retail sales increased 2.2% to $44.7 million, compared to Q1 ’24.Frozen novelties sales increased from a combination of strong unit volume growth and improved mix. Soft pretzels declined 7.4%, driven partly by a temporary issue with a major retail customer’s ordering system which was resolved in late December. Handhelds and Biscuit sales declined 6.8% and 1.0%, respectively, versus the prior year period.Sales of new products and added placement with new customers contributed approximately $2.3 million in the quarter driven by the growth of Superpretzel Bavarian sticks and frozen novelties, along with additional distribution of pretzel dogs and cookies.Operating income decreased 13.3% to $0.4 million versus the prior year period, driven primarily by increased operating expenses. Frozen Beverages Segment First Quarter Highlights Frozen beverage segment sales were $79.0 million, an increase of 4.0% over prior year sales.Beverage sales grew 6.4%, or $2.7 million higher than in Q1’24 led by volume growth primarily in the theatre channel.Machine Service revenues decreased 3.7%, versus the prior year period reflecting lower maintenance call volumes, while equipment sales increased 13.0% attributed to strong growth from new clients and convenience customers.Q1 ’25 operating income increased 29.9% to $4.2 million, compared to a Q1 ’24 operating income of $3.2 million. Conference CallJ&J Snack Foods Corp. will host a conference call to discuss results and business outlook on February 4, 2025, at 10:00 a.m. Eastern Time. Conference call participants should register by clicking on this Registration Link to receive the dial-in number and a personal PIN, which are required to access the conference call. A live audio webcast of the conference call will also be available on the Investors homepage at investors.jjsnack.com. About J & J Snack Foods Corp.J & J Snack Foods Corp. (NASDAQ: JJSF) is a leader and innovator in the snack food industry, providing innovative, niche, and affordable branded snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, the #1 soft pretzel brand in the world, as well as internationally known ICEE and SLUSH PUPPIE frozen beverages, DIPPIN’ DOTS ice cream, LUIGI’S Real Italian Ice, MINUTE MAID* frozen ices, WHOLE FRUIT sorbet and frozen fruit bars, HOLA! CHURROS, and THE FUNNEL CAKE FACTORY funnel cakes and several bakery brands within DADDY RAY’S, COUNTRY HOME BAKERS and HILL & VALLEY. For more information, please visit http://www.jjsnack.com. *MINUTE MAID is a registered trademark of The Coca-Cola Company. Cautionary Statement Regarding Forward-Looking Information This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s expected future financial position, results of operations, revenue growth and profit levels, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “goals,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. This includes, without limitation, our statements, and expectations regarding any current or future recovery in our industry and the future impact of our operational efficiency projects. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of management. We do not undertake a duty to update such forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include consumer spending, price competition, acceptance of new products, the pricing and availability of raw materials, transportation costs, changes in the competitive marketplace the uncertainty and ultimate economic impact of the COVID-19 pandemic or similar health outbreaks, and other risks identified in our annual report on Form 10-K, and our other filings with the Securities and Exchange Commission. Many of these factors are outside of the Company’s control. Non-GAAP Financial Measures Adjusted EBITDA consists of net earnings adjusted to exclude: income taxes (benefit); investment income; interest expense; depreciation and amortization; share-based compensation expense; net (gain) loss on sale or disposal of assets; impairment charges, restructuring costs, merger and acquisition costs, acquisition related inventory adjustments, strategic business transformation costs, and integration costs. Adjusted Operating Income consists of operating income adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustments, strategic business transformation costs, and integration costs. Adjusted Earnings per Diluted Share consists of net earnings adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustment, strategic business transformation costs, and integration costs. For purposes of comparability, the income tax effect of pre-tax adjustments is determined using statutory tax rates. This press release contains certain non-GAAP financial measures; Adjusted EBITDA, Adjusted Operating Income, and Adjusted Earnings per Diluted Share. A "non-GAAP financial measure" is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP") in the statements of income, balance sheets, or statements of cash flow of the company. Pursuant to applicable reporting requirements, the company has provided reconciliations below of non-GAAP financial measures to the most directly comparable GAAP measure. The non-GAAP financial measures presented within the Company's earnings release are not indicators of our financial performance under GAAP and should not be considered as an alternative to the applicable GAAP measure. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating these non-GAAP measures, you should be aware that in the future we may incur income, expenses, gains and losses, similar to the adjustments in this press release. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence to our GAAP results and using non-GAAP measures only as supplemental presentations. The non-GAAP measures presented are utilized by management to evaluate the Company's business performance and profitability by excluding certain items that may not be indicative of our recurring core business operating results. The Company believes that these measures provide additional clarity for investors by excluding specific income, expenses, gains, and losses, in an effort to show comparable business operating results for the periods presented. Similarly, Management believes these adjusted measures are useful performance measures because certain items included in the calculations may either mask or exaggerate trends in the Company’s ongoing operating performance. See the reconciliation of Non-GAAP Financial Measures below. Investor Contact:Joseph Jaffoni, Norberto Aja, or Jennifer NeumanJCIR(212) 835-8500jjsf@jcir.com J & J SNACK FOODS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EARNINGS(unaudited) (in thousands, except per share amounts)     Three months ended December 28, December 30,  2024   2023     Net Sales$362,598  $348,308 Cost of goods sold 268,697   253,723 Gross Profit 93,901   94,585     Operating expenses   Marketing and selling 28,669   27,472 Distribution 39,610   40,303 Administrative 18,903   18,199 Other general expense (income) 480   (1,072)Total Operating Expenses 87,662   84,902     Operating Income 6,239   9,683     Other income (expense)   Investment income 1,037   798 Interest expense (212)  (560)    Earnings before income taxes 7,064   9,921     Income tax expense 1,921   2,639     NET EARNINGS$5,143  $7,282     Earnings per diluted share$0.26  $0.37     Weighted average number of diluted shares 19,563   19,423     Earnings per basic share$0.26  $0.38     Weighted average number of basic shares 19,471   19,344  J & J SNACK FOODS CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except share amounts)     December 28,    2024  September 28, (unaudited)  2024 Assets   Current assets   Cash and cash equivalents$73,562  $73,394 Accounts receivable, net of allowances of $23,329 and $25,106 163,837   189,233 Inventories 169,752   173,141 Prepaid expenses and other 20,387   14,646 Total current assets 427,538   450,414     Property, plant and equipment, at cost 1,027,035   1,012,043 Less accumulated depreciation and amortization 633,300   620,858 Property, plant and equipment, net 393,735   391,185     Other assets   Goodwill 185,070   185,070 Trade name intangible assets, net 109,192   109,695 Other intangible assets, net 71,142   72,561 Operating lease right-of-use assets 156,164   152,383 Other 3,946   3,793 Total other assets 525,514   523,502 Total Assets$1,346,787   1,365,101     Liabilities and Stockholders' Equity   Current Liabilities   Current finance lease liabilities$252  $243 Accounts payable 81,340   89,268 Accrued insurance liability 17,872   16,933 Accrued liabilities 11,419   10,063 Current operating lease liabilities 20,077   19,063 Accrued compensation expense 16,475   23,325 Dividends payable 15,193   15,178 Total current liabilities 162,628   174,073     Long-term debt -   - Noncurrent finance lease liabilities 501   445 Noncurrent operating lease liabilities 143,813   140,751 Deferred income taxes 87,713   87,824 Other long-term liabilities 5,292   5,038     Stockholders' Equity   Preferred stock, $1 par value; authorized 10,000,000 shares; none issued -   - Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding 19,479,000 and 19,460,000 respectively    139,013   136,516 Accumulated other comprehensive loss (17,876)  (15,299)Retained Earnings 825,703   835,753 Total stockholders' equity 946,840   956,970 Total Liabilities and Stockholders' Equity$1,346,787   1,365,101      J & J SNACK FOODS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) (in thousands)     Three months ended December 28, December 30,  2024   2023 Operating activities:   Net earnings$5,143  $7,282 Adjustments to reconcile net earnings to net cash provided by operating activities   Depreciation of fixed assets 15,814   15,176 Amortization of intangibles and deferred costs 1,930   1,616 Loss (Gain) from disposals of property & equipment 146   (23)Share-based compensation 1,125   1,480 Deferred income taxes (158)  (192)Other (93)  157 Changes in assets and liabilities   Decrease in accounts receivable 24,987   32,407 Decrease (Increase) in inventories 3,164   (971)(Increase) Decrease in prepaid expenses (5,769)  2,625 (Decrease) in accounts payable and accrued liabilities (11,127)  (10,604)Net cash provided by operating activities 35,162   48,953     Investing activities:   Purchases of property, plant and equipment (19,065)  (19,930)Proceeds from disposal of property and equipment 131   82 Net cash used in investing activities (18,934)  (19,848)    Financing activities:   Proceeds from issuance of stock 1,372   4,481 Borrowings under credit facility 15,000   15,000 Repayment of borrowings under credit facility (15,000)  (35,000)Payments on finance lease obligations (42)  (85)Payment of cash dividends (15,178)  (14,209)Net cash used in financing activities (13,848)  (29,813)    Effect of exchange rates on cash and cash equivalents (2,212)  1,147 Net increase in cash and cash equivalents 168   439     Cash and cash equivalents at beginning of period 73,394   49,581     Cash and cash equivalents at end of period$73,562  $50,020      J & J SNACK FOODS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)(in thousands)     Three months ended December 28, December 30,  2024   2023         Sales to External Customers:   Food Service   Soft pretzels$52,539  $50,128 Frozen novelties 23,118   21,050 Churros 25,472   28,061 Handhelds 23,703   22,047 Bakery 108,746   101,982 Other 5,305   5,341 Total Food Service$238,883  $228,609     Retail Supermarket   Soft pretzels$17,078  $18,447 Frozen novelties 16,113   12,861 Biscuits 6,963   7,032 Handhelds 5,138   5,510 Coupon redemption (528)  (332)Other (47)  241 Total Retail Supermarket$44,717  $43,759     Frozen Beverages   Beverages$44,654  $41,950 Repair and maintenance service 23,639   24,559 Machines revenue 10,047   8,889 Other 658   542 Total Frozen Beverages$78,998  $75,940     Consolidated Sales$362,598  $348,308     Depreciation and Amortization:   Food Service$11,948  $10,673 Retail Supermarket 283   527 Frozen Beverages 5,513   5,592 Total Depreciation and Amortization$17,744  $16,792     Operating Income:   Food Service$1,672  $6,016 Retail Supermarket 392   452 Frozen Beverages 4,175   3,215 Total Operating Income$6,239  $9,683     Capital Expenditures:   Food Service$12,607  $11,865 Retail Supermarket 25   2 Frozen Beverages 6,433   8,063 Total Capital Expenditures$19,065  $19,930     Assets:   Food Service$973,260  $930,533 Retail Supermarket 34,459   36,219 Frozen Beverages 339,068   325,805 Total Assets$1,346,787  $1,292,557      J & J SNACK FOODS CORP. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES(Unaudited) (in thousands)     Three months ended     December 28,December 30,  2024   2023         Reconciliation of GAAP Net Earnings to Adjusted EBITDA       Net Earnings$5,143  $7,282 Income Taxes 1,921   2,639 Investment Income (1,037)  (798)Interest Expense 212   560 Depreciation and Amortization 17,744   16,792 Share-Based Compensation 1,125   1,480 Strategic Business Transformation Costs (2) -   2,246 Net (Gain) Loss on Sale or Disposal of Assets 146   (23)Adjusted EBITDA$25,254  $30,178         Reconciliation of GAAP Operating Income to Adjusted Operating Income      Operating Income$6,239  $9,683 Strategic Business Transformation Costs (2) -   2,246 Acquisition Related Amortization Expenses 1,930   1,616 Adjusted Operating Income$8,169  $13,545         Reconciliation of GAAP Earnings per Diluted Share to Adjusted Earnings per Diluted Share      Earnings per Diluted Share$0.26  $0.37 Strategic Business Transformation Costs (2) -   0.12 Acquisition Related Amortization Expenses 0.10   0.08     Tax Effect of Non-GAAP Adjustments (1) (0.03)  (0.05)    Adjusted Earnings per Diluted Share$0.33  $0.52     (1) Income taxes associated with pre-tax adjustments determined using statutory tax rates(2) Strategic business transformation costs are start-up costs related to our regional distribution center supply chain transformation.       

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