J & J Snack Foods Corp. Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $1.45b | Revenue (TTM) = $1.52b
Market Cap = $1.45b | Estimated Revenue = $1.54b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $1.41b | Revenue (TTM) = $1.52b
Enterprise Value = $1.41b | Forward Revenue = $1.54b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
J & J Snack Foods Corp. Stock Analysis
Analyst Opinions
9 Analysts have issued a J & J Snack Foods Corp. forecast:
Analyst Opinions
9 Analysts have issued a J & J Snack Foods Corp. forecast:
J & J Snack Foods Corp. Events
Past Events
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AUG
5
Q3 2026 Earnings Call
about 2 months ago
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MAY
6
Q2 2026 Earnings Call
5 months ago
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FEB
3
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J & J Snack Foods Corp. — Q3 2026 Earnings Call
1. Management Discussion
Thank you. Good day and thank you for standing by. Welcome to the J&J Snack Foods third quarter 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today.
Reed Anderson with ICR. Please go ahead. Thank you, Operator, and good morning, everyone. Thank you for joining the J&J Snack Foods fiscal 2026 third quarter conference call. Before getting started, let me take a minute to read the Safe Harbor language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements, including statements regarding management's plans, strategies, goals, expectations, and objectives, as well as our anticipated financial performance. This includes, without limitation, our expectations with respect to the success of our cost savings initiatives, or demand improvements in the sales channels in which we operate.
These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risk factors and other items discussed in our annual report on Form 10-K and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on the call today. Research forward-looking statements represent management's estimates as of the date of the call today, August 5th, 2026. We may elect to update forward-looking statements at some future point. We disclaim any obligation to do so, even if subsequent events cause expectations to change. In addition, we may also reference certain non-GAAP measures on the call today, including adjusted EBITDA. adjusted operating income, or adjusted earnings per share, all of which are reconciled to the nearest gap measure on the company's earnings press release, which can be found in our investor relations section of our website. Joining me on the call today is Dan Faschner, our Chief Executive Officer, along with Shawn Munsell, our Chief Financial Officer.
Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to Mr. Faschner. Please go ahead, Dan.
Good morning and thanks everyone for joining today's call to discuss our third quarter results. We are proud of the progress we've made implementing our transformation initiatives, which helped to support earnings performance despite material fuel and freight pressures during the quarter. Gross profit improved about $1 million. to $151 million, and consistent with the first half of the fiscal year, gross margin continued to expand, rising 240 basis points to 35.5%. Adjusted EBITDA came in at $67.4 million, a decrease of 6.4%. from last year and adjusted earnings per share were $1.96 versus $2 a year ago. The The 4.6 million EBITDA decline from the prior year quarter was primarily attributed to freight and fuel cost pressures, which together increased about 4.7 million net of surcharge collections. Net sales were 426 million, down 6.2%, with over half of the decline attributed to anticipated sales reduction in bakery. About 140 basis points of decline was attributed to our frozen beverage business, where higher beverage sales only partly offset at lower service and machine sales.
Retail sales improved 1.7% in the quarter as higher levels of promotions lifted volume. Looking ahead, sales momentum is building, and we expect the sales environment to improve in the fourth quarter with our toughest top-line comparison behind us. The impact of the anticipated bakery sales reduction peaked in our third quarter and will diminish in the fourth quarter to about two and a half percent of prior year sales. We are shipping against several new meaningful pieces of business in the fourth quarter across our core portfolio that includes churros, and frozen novelties. We also expect retail sales to improve further as we realize benefits from innovations and promotions while the sliding fee headwind diminishes. Our innovation rollout continues and we've been pleased with the results. Some headwinds in service and machine sales are anticipated in the fourth quarter, but we expect beverage volume increases to partly offset those headwinds.
Further, we have line of sight to begin closing the service revenue gap in the fourth quarter, with most of it closed by the first quarter of fiscal 2027. We expect the company to to return to sales growth in fiscal 27. The increase in fuel and freight expenses reflects higher oil prices and significant tightening of freight markets during the quarter. School costs were about in line with expectations, while freight rates rose sharply as the quarter progressed. The freight increase primarily reflects constrained capacity because of regulatory and legislation changes. We are pursuing steps to mitigate some of the pressure. We expanded our application of fuel surcharges during the quarter and recently increased our minimum order quantities.
While we expect fuel and freight pressures to persist in our fourth quarter, diesel prices have moderated from the highs earlier in the summer. With respect to segment performance, there are several bright spots in the quarter. In food service pretzels, we extended our category leadership, picking up 4.6 points of dollar share. Our retail segment had a solid quarter. Net sales were up 1.7% as higher promotions supported volume. Moreover, we incurred higher slotting fees to support the rollout of new innovation, implying underlying growth in the mid single-digit range. Syndicated data for the 13 weeks ending July 12th showed retail pretzel sales up about 2% and novelties up 3%.
Dogsters continues to perform exceptionally well with retail sales up over 30% in track channels. Over the same period, syndicated data shows Luigi's up over 20% aided by in-cap placements with a major customer. Retail Dippin' Dots growth was driven by the launch of the high-temp Dippin' Dots product, as well as two more sundae flavors, with the brand up more than 100% and track channels for the 13 weeks ending July 12th, with almost 4 million retail measured sales. Within our frozen beverage segment, beverage volume increased mainly on the strength of theaters and mass merchandising channels, driving a net sales increase for beverage of 5.9%. slate of solid movies in the quarter more than offset the success of the Minecraft movie in the prior year quarter. We are extremely encouraged by the movie lineup for the fourth quarter and for fiscal 27, which includes the new record-breaking Spider-Man movie that was released this past weekend. The test with a West Coast QSR operator continues, and we remain optimistic that it will conclude with a positive outcome soon. We are actively testing and expanding our footprint with both new and existing partners across convenience, theaters, and entertainment venues, and early signs are very encouraging.
The more efficient cost structure we built through Project Apollo, along with the improved sales mix, has underpinned much of our gross margin expansion and puts us in a strong position as we look to return to top-line growth in fiscal 2027. Plant consolidation savings are ahead of target. given us the confidence to raise the plant consolidation component of Apollo to at least 20 million of annualized savings. That would take the full program annualized run rate to at least 25 million. Further, our G&A initiatives were implemented in the quarter, which helped to moderate administrative costs. expenses which were materially flat in the quarter and despite the fuel and freight cost increases we did realize distribution cost savings in the quarter from Apollo initiatives. Our innovation pipeline keeps gaining traction. We're picking up new distribution across both retail and food service. We are encouraged by the early results of our new Better For You lineup, including our Super Pretzel 10-gram protein pretzel and the new Luigi's Mini Pops with benefits of hydration and antioxidants, which are generated strong velocities for our retail partners.
Dogsters has yielded the most incremental distribution, and we're also optimistic about the rollout of Dogsters to the pet retail channel, which just started in August. Our balance sheet remains in great shape. This quarter we returned another 25 million of cash to shareholders, including 15 million in dividends and 10 million in share repurchases. I'll now hand things over to Sean, who will walk you through the numbers in more detail. Sean?.
Thanks, Dan, and good morning, everyone. Building on what Dan covered, our third quarter results reflect continued execution on our transformation initiatives, even with some cost headwinds working against us. Food service net sales decline 22.9M or 8.3% to 254.3M with about 16M of the decline associated with anticipated reductions in bakery. We saw a modest growth in both pretzels and churros, but this was more than offset by continued softness and cookies and handhelds consistent with the pattern. saw in the second quarter. Food service segment operating income of $28.1 million was modestly above prior year as higher distribution costs mostly offset continued improvements in gross profit. Retail segment net sales increased 1.1 million, or 1.7%, to $64.9 million. We incurred a $2 million increase in slotting fees in the third quarter to support the rollout of recent innovation.
Absent slotting increases, retail segment sales would have increased 4.8%. Dogsters continues to perform exceptionally well with units up about 40% in the quarter. Retail segment operating income declined $3.5 million, primarily driven by the increase in slotting fees and distribution costs. Frozen beverage segment net sales decreased 6.5 million, or 5.8%, to 106.7 million. Strong growth in beverage sales of 5.9% was more than offset by lower service and machine sales. Lower service sales were driven by customer insourcing decisions consistent with our fiscal second quarter, while more and more of the sales were driven by the sales of the product. while machine sales declines mainly reflect the cyclicality of the machine business. Beverage strength primarily was driven by theater and mass merchandise channels.
Convenience channel sales were soft in the quarter. Frozen beverage segment operating income decreased $900,000 to $22.8 million as sales declined and higher distribution costs were partly offset by favorable foreign exchange and cost containment initiatives. Consolidated gross margin improved 240 basis points to 35.5% due primarily to plant consolidation savings and mix improvements. Year-to-date, gross margin has expanded 200 basis points and we expect gross margin expansion to continue in the fourth quarter. operating expenses increased approximately 17.1% or $15.3 million. Prior year reported results included a $9.1 million non-recurring net gain driven primarily by receipt of insurance proceeds. Selling and marketing expense increased approximately 2.3% or $800,000 versus the prior year, representing about 8.1% of sales compared to 7.5% in the prior year. Distribution expenses increased $4.9 million and accounted for 11.6% of sales, compared to 9.8% in the prior year period, driven by higher freight and fuel costs of approximately $5 million, excluding any offset from fuel surcharges.
Administrative expense was approximately flat versus the prior year and included about 600,000 of non-recurring legal charges. Implementation of G&A savings initiatives helped to drive a moderation in administrative expenses. Adjusted operating income was $48.1 million compared to $53.4 million in the prior year. Adjusted EBITDA was $67.4 million down 6.4% from $72 million last year. The effective tax rate for the quarter was approximately 23.2% as compared to 27.2% in the prior year. On a reported basis, earnings per diluted share was $1.88 compared to $2.26 last year, with the prior year benefiting from a one-time insurance gain. On an adjusted basis, earnings per share was $1.96 compared to $2 a year ago.
Our balance sheet remains strong with cash net of debt of approximately $35 million. We had approximately $182 million of borrowing capacity under our revolving credit facility. During the quarter, we generated approximately $48.8 million in operating cash flow and invested about $18.1 million in capital expenditures. We expect to collect approximately $17 million in insurance proceeds in August, reflecting the final settlement of the fire-related loss at our Holly Ridge plant, which was closed as part of Project Apollo. We repurchased approximately 136,000 shares of common stock for $10 million during the quarter. On a year-to-date basis, we've returned approximately $120 million to shareholders through the first nine months of fiscal 2026 through dividends and share repurchases. That concludes our prepared remarks, and we're now ready to take your questions.
Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Our first question comes from the line of Todd Brooks of BenchmarkstoneX. Your line is now open.
2. Question Answer
Hey, good morning, guys. Thanks for taking my questions. Good morning, Todd. Dan, you spoke to headwinds diminishing in Q4 in the earnings release. What are you speaking to specifically that eases in Q4 and what's your visibility into that happening?.
Good morning, Todd. Thanks for the question. Hey, before we start, I just wanted to say a couple of things. Our late founder, Jerry Shriver. I just said this was a quarter to crow about. And I feel like there's a few things I wanted to crow about, if I could do that just before we get started. I'm really proud of the team and what they are accomplishing, especially in this quarter. We started out the year with a play that we called to raise margins, reduce expenses, and there really run at the headwinds. And this quarter that we were up against last year was a record-breaking quarter, and we ran at it and did pretty well up against it, especially when you consider the fuel and the freight picture that we're up against.
Without that headwind, we would have beaten last year EBITDA. But in short, Todd, Project Apollo is doing exactly what we designed it to do, and it's protecting margins in the quarter, despite the pressures that are out there. And we're really seeing some great momentum building in our sales heading into the fourth quarter. So some really exciting things and new pieces of business that we have that are shipping this coming quarter. Some great things with pretzels in a QSR, with churros in a club store, and really frozen novelties in a lot of different areas, including some great private label stuff that we're doing. And then the last thing I would crow about, we had a headwind with service, and the team's gone out there and signed a new deal with a big service organization that will get us back on track in the fourth quarter and really start to kind of get back to normal growth. as we see 2027. So really a lot of good things happening.
Your question around what are some of those, We had bakery headwinds that had some declines And we're still doing that skew rationalization, but we kind of hit the peak of that as you get to Q3 and it starts to taper down as we get to Q4. Q3, it was like 3.5%, Q4, somewhere in that 2.5% range. closing that service gap like we just talked about. Got a great new piece of business, anxious to share the name of that customer at some point in the future, but we have signed the contract and that piece of business is coming on board now and will continue to grow into next year. retail is doing great. You know, you saw that up 1.7% in the quarter, really happy with their progress. We've been talking about doing a lot of promoting in that, but we're seeing volumes outpaced the promoting, which is really exciting. And then slotting fees, as we've had to pay for a lot of that great new innovation, and it is great new innovation, some of that doing extremely well for us, But those slotting fees are starting to diminish as well. And then last but not least, really excited to see what the theater is starting to do.
I'm sure everybody's been reading about that. In different times, people have thought that theater business has been left for dead. But it is charged back really, really strong. And in this past weekend, we had Spider-Man that was released. And it was a record breaker. So we're really excited about some of the things that we have going on and are looking forward to Q4 and beyond.
That's great, Dan. Thanks. And if I can extend that question and start to talk about fiscal 27, J&J has a long history of kind of generating amount of organic growth, and then there's market-related growth, plus or minus around that. If you look at what you're kind of tasking the teams with or what the outlook is, what do you see for the organic growth outlook for the company in 27, and what are the big drivers that kind of give you visibility into that controllable growth?.
that you might be a part of this? Yes, we definitely see organic growth returning in 2027. I said this earlier. We've got some really good things happening in our core products in pretzels and churros and frozen novelties. We talked a little bit about the frozen beverage. We think theaters are coming back strong. We think 27, the lineup of theaters looks good. I still like the tests that we have going on. with the IC business and a QSR that I think that we'll see some positive results that happen in 27. And then a couple other tests that the team is generating beyond that.
Our sales team right now is hitting on all cylinders. So I like what we have going in to 2027. We haven't released what that number will be, but I absolutely believe we'll be back to organic growth. And then I think we'll continue to see great results from the innovation that we've had going on and some innovation to come as well.
Okay, great. Thanks, Dan. Thank you. Our next question comes from the line of Scott Marks.
Jeffries, your line is now open. Hey, good morning, Dan, Sean. Thanks for taking our questions. First thing I wanted to ask about, you talked about the food service segment. You know, I think if we exclude the bakery skew rationalization, sales were still down a little bit. And you called out some weakness in cookies and handhelds. So just wondering if you can dive into that a little bit, just help us understand what's happening with that part of the business and how you're thinking about, maybe operational adjustments or changes to help stabilize that part of the portfolio. Yes, good morning, Scott. Hey, we're proud of what the food service group is doing as well.
It's a big group. If you think about our total business, it's still two thirds of our business. And there's a lot of moving parts and the team is doing really, really well there. When you think about a couple areas that are weaker, meaning the cookies and the handhelds, The cookies is just kind of an offshoot of the buying being down in that area. We have a major customer satisfaction south of the border that has been a little bit softer this year. We continue to hope that it will come back to its normal self, but it hasn't. The fortunate thing is lower margin business, as is the handheld business as well. And most of our handhelds go to a couple of big customers. where there's been some not direct competitor environment, but some other products added to that area that have maybe impacted those sales slightly.
And the way that we're going to go about fixing that or attacking that, and the team is doing that right now, is to go grow the core. We've seen some great churro growth happening. We've got a really nice piece of churro business that will be shipping out in the fourth quarter, and it could be backed up by some really strong ones in Q1. pretzel opportunity that we'll be hitting, uh, here in the fourth quarter. And it's even using our brand super pretzel along with it. So I'm really excited about that. And then just, as I talked about frozen novelties doing really well, um, in addition to doing some great things with private label or command around the frozen novelties and that's what we'll do to continue to pull the food service back in line. And that cookie gap you know that extended from the second quarter it did it did improve in the third quarter but didn't improve by quite as much as we were we were hoping.
We've even seen it improve a little bit here in the fourth quarter.
But it's got to continue to grow. Understood. Appreciate the color there. And then next question from me, maybe if we could shift over for a second to talk about Project Apollo. You talked about a higher amount of annualized savings from the plant closure portion of that. Just wondering if you can help us understand maybe the transition. drivers behind that, why is that coming in ahead of plan and prior guidance, and then how we should be thinking about the other components of Project Apollo as well. Thanks. Yes, that's another one of those things. We talked about things to grow about. When you start a project like Apollo, those are bigger.
rocks that you're turning over maybe even boulders that we're picking up and moving and the team has done a tremendous job with that if you've ever been involved in you know consolidation or expense savings those projects are are not fun and not easy and require a lot of work. Our teams have done a tremendous job with that. Really, really proud of what it's done. We talked about raising our thoughts around what it will accomplish for us this year.
Sean, you want to touch on some of those things? Yes, sure. So again, to be clear, we raised the plant consolidation component of Apollo from $15 to $20 million, which takes the total program from $20 to $25 million. And largely what we've seen is some of the costs transitioning products have stabilized. And so that's helping to support the higher number. You know, that 20 million annualized is consistent with what we achieved in the third quarter. And I can tell you too that, you know, our target did have a bit of conservativism built into it. And, you know, we feel comfortable now that we got a couple quarters quarters under our belt that, you know, the run rate, you know, from the third quarter is going to, is going to hold for us.
Appreciate it. Thanks for the questions. I'll pass it on. Thank you, Scott.
Thank you. Our next question comes from the line of John Anderson of WB. Your line is now open. Good morning, guys. Good morning, John. Hey, um...
Sticking with the Apollo program for a moment, I think you've always talked about it as kind of in phases. over delivering on kind of phase one, the plant consolidation. YOU KNOW, I'M THINKING AHEAD A LITTLE BIT AS YOU LOOK FORWARD. A LITTLE BIT AS YOU LOOK FORWARD. A LITTLE BIT AS YOU LOOK FORWARD. IS THERE A SECOND FAITH to this that could end up yielding additional benefits? And, you know, and if so, you know, Is there any way for us to kind of think about at least maybe some of the areas you're looking at and maybe kind of benefits and timing at a high level? Sure.
Yes, absolutely. Great question, John. Again, I just want to say this one more time. Proud of what the teams are doing around Apollo. That's not easy work, and the teams are doing a great job with it. We are looking at what I would call Apollo 27, and there's some real good work around that as well. You saw some of it in this quarter as we did. We talked about GNA expenses and pulling that back in line, and I'm excited about what we see there. We'll continue to look at areas like the plants and where we're making products and where we can make products in the future to get them closer to points of distribution.
We'll look at any form of consolidation that can be done there. We're still working on it, and we'll be talking about that in the next queue and trying to identify exactly what that might mean for us in 2027. But the teams have embraced it and are doing a really, really good job. And again, that's not easy work, but they're doing it.
doing well with it. Absolutely. You talked about the sales momentum building and that, you know, you'd expect a return to organic growth on a full year basis in fiscal 2027. Do you think you can grow organically in the fourth quarter of 26, or should we be thinking more about these business wins and launches, et cetera, kind of kicking in ahead of time?.
having you kind of inflect in early in 27 versus the fourth quarter? Well, when you think about Q4, we still have some of the planned obsolescence that we're up against. And I think we've talked about that being in that 2 and 1 1% range. So we're still up against that as we go into Q4. So I'm not sure that I would be I would identify that yet there. I do think as we get into Q1 with what our line of sight is right now, that we have a really good chance of seeing that at the end of this calendar year or Q1 for us going into next year. On the pipeline, just to touch on on that a little bit. The pipeline from the sales team is about as strong as I've ever seen.
And so if some of those hit and some of the bigger ones hit well, feel really good about 27. Of course, there's always headwinds, right? And so we'll be facing those too. But But I feel good about what we have going on, and I feel good about what the teams are generating right now. They've been working really, really hard. And I would look more towards Q1 than probably Q4. That's helpful. Given the...
the pipeline as you described it being so strong. Are there any kind of capacity considerations here? Are you in good shape to kind of service that demand on time and in full? Or are there some investments that you might be making or need to make as you think about capacity.
No, you know, again, kicked it off with, you know, things to crow about and what the teams are doing out there. And one of the plays that we called and have called for the last couple of years is to grow the core. And that's where really most of this growth is coming from is in our core business. Those are areas that we're looking at. we had invested in already to be able to have that type of capacity. And so what we're looking at right now will not require additional investments around those types of things to get the sales growth that we're looking at.
Okay. I know that you've gone through this process this year, which makes a lot of sense to skew rationalize some parts of the bakery business, maybe more commodity oriented. Is more of that to do or maybe bigger or additional moves that you might want to make from a portfolio perspective to reorient around, I guess, what you call kind of your crown jewels or core brands or are you kind of happy with the work that's been done and that you kind of move into more of a steady state as you get into next year?.
Yes, another really good question. I don't see us at this point in time having any more skew rationalization or plans of the lessons, obsolescence. We are continuing though to assess the portfolio and make sure that what we sell and what we want to sell in the future are good fits for this organization and help us reach those goals like we did this quarter with a 35 and a half percent gross profit margin. We've talked about that for a long time and it was really exciting to see that happen. We'll continue to assess the entire portfolio, but I don't see at this point in time any additional skew rationalization that needs to be done. Great, thank you so much and congrats.
Thank you, John. Thank you. This concludes the question and answer session. I would now like to turn it back to management for closing remarks.
Great. Thank you very much. Thanks everyone for your questions. Stepping back, I think our third quarter results showed that the transformation work that we've been doing is holding up. We're protecting margins and profitability, even with some top line and distribution cost pressures working against us. I had to sum up fiscal 26. It's really been a year of repositioning the business for the long run. We stayed disciplined on product development, innovation, and really building the right partnerships. I think it sets us up well heading into fiscal 27.
Our balance sheet gives us great room to keep investing in growth while we're turning cash to shareholders. And we remain completely confident in project upon project and believe that it will continue to pay off. So I want to thank you again for your support and we look forward to catching up with you next quarter. Thank you very much.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
This live transcript is auto-generated without human intervention or review.
[Call has ended.]
J & J Snack Foods Corp. — Q2 2026 Earnings Call
1. Management Discussion
Good morning and welcome to the J&J Snack Foods Second Quarter 2026 Conference Call. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Reed Anderson with ICR. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining the J&J Snack Foods Fiscal 2026 Second Quarter Conference Call. Before getting started, let me take a minute to read the safe harbor language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements, including statements regarding management's plans, strategies, goals, expectations and objectives as well as our anticipated financial performance. This includes, without limitation, our expectations with respect to the success of our cost savings initiatives and customer demand improvements in the sales channels in which we operate. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Risk factors and other items discussed in our annual report on Form 10-K and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on the call today. Any such forward-looking statements represent management's estimates as of the date of this call today, May 6, 2026. While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause expectations to change. In addition, we may also reference certain non-GAAP measures on the call today, including adjusted EBITDA, adjusted operating income or adjusted earnings per share, all of which are reconciled to the nearest GAAP measure on the company's earnings press release, which can be found in the Investor Relations section of our website.
Joining me on the call today is Dan Fachner, our Chief Executive Officer; along with Shawn Munsell, our Chief Financial Officer. Following management's prepared remarks, we will open up the call for a question-and-answer session.
With that, I would now like to turn the call over to Mr. Fachner. Please go ahead, Dan.
Good morning, everyone, and thank you for joining us today. We're excited to discuss our second quarter fiscal 2026 results. I'm pleased to share continued progress this quarter against our strategic priorities. We delivered positive earnings and margin expansion despite a quarter that was impacted by demand softness amid rising fuel costs. Adjusted EBITDA increased 9.5% year-over-year to $28.7 million, and adjusted EPS increased 14.3% to $0.40, while sales declined 3.2% to $344.8 million. Foodservice sales declined 5%, with most of the decline attributed to the anticipated sales reductions in our bakery business, consistent with Q1. And while retail sales declined 4.1%, the decline was due to higher slotting fees and trade investments to support our innovation pipeline and brand share growth objectives.
Frozen beverage results improved due to an increase in beverage volume and cost control. Apollo initiatives and mix improvements helped to drive gross margin expansion in the quarter. Our ability to improve earnings and margins as we reshape the portfolio demonstrates that our transformation initiatives are working. Our plant consolidations have created significant plant efficiencies, and we're on track to deliver at least $20 million of annualized Apollo savings once all initiatives are implemented. We are now focused on driving administrative and distribution cost reductions.
To that end, we executed several of the administrative initiatives later in the second quarter as we reduced corporate expenses, and we expect to achieve the remaining initiatives in the third quarter. Overall, given the implementation later in the quarter, we realized just a modest level of administrative savings in the second quarter, and our distribution efficiencies initiatives will ramp up in Q3.
I want to share a few other highlights from the quarter. First, an update on our innovation pipeline. It's important to note that we are still early in the process as several products begin shipping later in the quarter. However, the sell-in process has been progressing very well, and we're securing distribution across multiple retail and foodservice channels. In the quarter, we shipped over $2 million in new products, including about $900,000 of Dippin' Dots for retail, $900,000 of new Dogsters ice cream products and $200,000 of Luigi's mini pops. Our pretzel innovation shipments are ramping up now, and we expect that these new products will deliver exceptional consumer experiences and sales growth.
We had another quarter of standout performance in foodservice pretzels. Sales were up $6.7 million and dollar share increased 4.3%. As in prior quarters, the primary growth driver was Bavarian style pretzels. In retail, our Dogsters products continue to perform well. We shipped volumes up over 20% versus the prior year. Again, we're encouraged that the new Dogsters sandwich will be well received by our 4-legged consumers. We have entered into a new licensing partnership with the Peanuts character Snoopy to be used in conjunction with our Dogsters brand. We're now also introducing the Dogsters product lineup to pet stores. In frozen beverage, our themed brand activation around some solid movie releases supported segment performance.
Looking ahead, we're encouraged by the slate of releases for our fiscal second half. We are optimistic that movies like Super Mario Galaxy, Star Wars: Mandalorian and Toy Story 5 will support theater performance in the second half of '26. Additionally, the ongoing ICEE test with a West Coast QSR has expanded to additional markets. We are encouraged by the progress and believe that we're nearing completion of the test phase.
I'm also proud to share that in honor of our nation's 250th anniversary, we are rolling out several themed products, including a Star-shaped SUPERPRETZEL, red and blue ICEE squeeze tubes and red, white and blue cups for our Luigi's Real Italian Ice. Our financial position remains strong with a clean balance sheet. During the quarter, we repurchased $22 million of shares at an average price of $84.56. Along with the dividends of $15.2 million, we returned over $37 million to shareholders in the quarter.
With that, I'll now turn the call over to Sean to walk through the financial details. Sean?
Thanks, Dan, and good morning, everyone. As Dan mentioned, we're pleased with the profitability improvements we delivered in the second quarter, reflecting continued progress on our transformation initiatives. Foodservice segment net sales declined $11.4 million or 5% to $214.7 million. The largest driver of the decline was the anticipated reductions in our lower-margin bakery business of about $8 million. Additionally, cookie sales to a large customer declined about $4 million in the quarter due to the customer working through elevated inventory levels. We expect their orders to rebound in the third quarter. Churro sales declined about $3 million, while handheld sales declined $3.4 million. Partially offsetting these headwinds was continued strength in pretzels, which increased $6.7 million.
Overall, our foodservice segment demonstrated resilience with notable bright spots and a significant improvement in profitability. Foodservice operating income increased $3.4 million to $10.9 million, largely reflecting gross margin improvements from plant consolidation and mix improvements.
Retail segment net sales decreased $2.2 million or 4.1% to $51.6 million. Frozen novelty sales declined about $3.9 million during the quarter, which was partly offset by an increase in handheld sales. Retail sales were impacted by an increase in slotting fees of approximately $2 million to support new product innovation, along with increased trade investment, primarily in frozen novelties. Retail segment operating income declined $3.9 million due to slotting fees, trade and mix shift. Looking ahead, we intend to continue investing in trade and promotion to support our retail business in the second half.
Frozen Beverage segment net sales increased $2.3 million or 3.1%. Beverage sales grew 13%, driven by an increase in theater sales and favorable foreign exchange. A decline in service sales of $3.2 million is expected to persist due to a customer decision to in-source maintenance. Despite this decision, we don't expect a meaningful margin impact as we temporarily downsize our tech network until we onboard prospective replacement business. Frozen beverage operating income increased $2.1 million to $4.6 million. Consolidated gross margin improved 190 basis points to 28.8%, primarily reflecting Apollo initiatives and favorable mix in foodservice and frozen beverage. Operating expenses increased $7.8 million to $97.5 million, which included $6.5 million in nonrecurring items related to plant closures and other restructuring costs, of which $4.1 million was noncash.
Selling and marketing expenses increased 5.5% or $1.6 million compared to the prior year, representing 8.7% of sales as compared to 8% last year. The increase includes investments in marketing equipment and brand support. Distribution expenses declined and represented 12.1% of sales compared to 11.7% in the prior year period. Distribution costs included a $400,000 headwind from higher fuel costs. If fuel remains at current rates, fuel costs would be expected to increase approximately $3.5 million in the second half versus the prior year, if not mitigated. Administrative expenses were $21.2 million, an increase of $1.4 million or 7.2% from the prior year, primarily due to an increase in nonrecurring charges in the quarter. The charges, which totaled $1.7 million are primarily associated with nonrecurring legal expenses and other restructuring charges, including severance.
Adjusted operating income was $9.6 million compared to $8.9 million in the prior year. Adjusted EBITDA increased 9.5% to $28.7 million versus $26.2 million last year. The effective tax rate was 28.1%. On a reported basis, earnings per diluted share was $0.09 compared to $0.25 last year, primarily reflecting the impact of onetime charges. On an adjusted basis, earnings per share was $0.40, a 14.3% increase from last year.
Our balance sheet remains strong with approximately $31 million of cash net of debt. We had approximately $181 million of borrowing capacity under our revolving credit agreement. During the second quarter, we generated approximately $16 million in operating cash flow and invested $16 million in capital expenditures. Over the past 12 months, we have repurchased approximately 785,000 shares for an aggregate of $72 million. In the first half of '26, we have returned $95 million in cash to shareholders through share buybacks and dividends.
That concludes our prepared remarks, and we are now ready to take your questions. Operator?
[Operator Instructions] Our first question today is from Jon Andersen with William Blair.
2. Question Answer
Dan, you mentioned at the, I think, the top of your prepared comments that in the quarter, you experienced some demand softness on rising fuel costs. I'm wondering if you could talk a little bit more about maybe where you experienced that the most. And when I say where, maybe if you could discuss it in the context of categories and maybe channels and then how you kind of expect that to kind of play out in the back half of the year based on what you know right now?
Right. Yes. Thanks, Jon. Thanks for the question. Where you get hit the most right off the bat with fuel costs rising is in your convenience store business. That's where people feel it the most or at the gas pump, the price is high on their filling up the tank and they decide not to go in and purchase something more. We also see that in our foodservice side of our business, too. That's an area that gets hit quicker than some of the other spots. We're seeing really a consumer that is -- just has a sentiment already about worries about costs rising. And then the fuel uncertainty makes that makes it much more live to them.
Okay. Fair enough. Do you think as we -- I know you don't offer guidance per se, but if we look to the back half of the fiscal, given that -- you also have quite a bit of, I think, good innovation coming or in the works or in flight right now. And it sounds like some tests may be coming to some kind of resolution, hopefully favorable resolution. How are you thinking about kind of growth in the back half of the year? And then I guess part of that question is also we need to consider the ongoing impact of SKU rat in bakery or just account some of the business rationalization you're doing in the low-margin part of bakery. Does that continue with the kind of levels you've experienced in the first half? Any kind of thinking around that would be helpful from a modeling perspective.
Sure. Yes. Good question, Jon. And you're right, we don't really give specific guidance in that space. What we do know is we have some planned volume reductions like what we've talked about in both Q3 and Q4. In Q3, I think that's about a 3.5% in Q4, about a 2.5%, consistent with the 3% that we've talked about for the year. We also know -- like I just talked about with you, we have that wavering consumer sentiment with the higher oil prices, and that's bouncing around even as we speak this morning, that's bouncing around some. And we also know we have some really strong benefits coming from Apollo in the second half. We saw that in the first half of the year. We saw that this quarter. Proud of the way the teams are working towards that. And so we see that benefit as I sit today, I would see the environment in Q3 being pretty much the same as the environment we saw in Q2.
Makes sense. Maybe pivoting to the Apollo and the benefits from that. Could you just bring us up to speed on how much -- what the run rate benefits are as we kind of exited the first half run rate annualized benefits from Apollo? And then it sounds like you're making good progress on the next kind of phase of benefits, administration and distribution. What that might mean for run rate annualized savings exiting fiscal '26?
Yes, sure. I'll take that. So the plant savings or the plant consolidation work is materially complete. And if you recall, that was about $15 million worth of annualized benefits. That's our estimate. In the quarter, we were actually above $4 million in plant savings, so a bit above that run rate. The balance of that $5 million is coming from a combination of G&A administrative savings as well as the distribution savings. On the administrative savings front, we implemented a number of initiatives later in the second quarter. So you didn't really see a lot of the benefits show up in the second quarter. The remaining initiatives will be -- were actually completed there in April. So we'll be at the full run rate on the G&A savings, which is at least $2 million annualized. And on the $3 million of distribution cost savings, we'll be ramping that up in Q3 and Q4. So by the time we get to Q4, the end of Q4, we should be on the full run rate for all the initiatives. So we feel good about where we are.
Great. Great. Maybe I'll -- if I can get one more in. It seems like you've been buying back stock a little bit more regularly. And I'm just kind of wondering, as you look ahead and obviously supporting the dividend, do you think about returning cash to shareholders going forward? Could you talk a little bit about the priorities there? And would you kind of continue the approach you've taken kind of over the last 12 months?
Yes, sure. We saw -- continue to see compelling value in the shares. We bought back $22 million in the quarter. And I can tell you that we'll continue to buy back stock. We have seen an increase, I'd say, in potential M&A activity. And so that's probably going to factor into the calculus here in the back half. But yes, we're -- our stock buyback, it does reflect our conviction.
The next question is from Todd Brooks with The Benchmark Company.
Shawn, can we lead off on oil because I think it touches you in multiple places, right? It's at the consumer level, it's at the raw distribution level. It's also in the packaging level. So I think you gave some color on what the incremental pressure from fuel would be the $3.5 million in the second half if we stay at current levels. But is that just on the distribution side? And then I know there's no way to really gauge the consumer demand, but how about on the packaging side?
Yes. Yes, it's a great question. So that is just the direct fuel piece. There is some potential risk around packaging as we get later into Q3 and Q4. But the lion's share of the impact is going to be in those direct fuel costs. We haven't attempted to quantify what it means from the consumer outside of the comments that Dan made earlier. But yes, that $3.5 million is representative of the second half within distribution. Now I will say that we are taking steps to try to mitigate some of that exposure. And so hopefully, we see -- hopefully, we get a little bit more relief than what's modeled there.
Yes. That's where I wanted to go next. Is this something that you can fuel surcharge immediately to customers? Is it something that has to be negotiated price increases, at least in retail? And given the volatile nature of what we're living through now and how the markets are spiking up and down, do you want to try to price to offset this pressure yet? Or do we need to have kind of more of a permanent resolution before you try to take those actions?
Well, I'm going to take that, Todd. It's one of the things you have to watch really closely. We have some disciplines in the business on both the ICEE and Dippin' Dots side that allows us to be able to almost take those immediately. On the food service side of the business and the retail, it's a little bit more difficult than that. But we are meeting and talking about it, and we'll take price kind of action if need be.
Okay. Perfect. If I can pivot and you're one of the few calls I've been on the cycle that didn't call out the impact from the winter weather reality that we lived with in kind of January, February and a good size footprint of the country. Have you sized either lost revenue from weather disruption or margin pressure or anything that you want to share with us as we're evaluating the results?
Yes. There's no way in our business that weather doesn't impact you. So we don't have a number that we've been able to put to that, Todd, but it certainly has an impact on our business and especially in some of our products that are in locations that are outside in foodservice and areas that people just can't get to. But it certainly has an impact. We have not put a number to that, though.
Okay. Great. And then if I could squeeze one more in. You talked about the West Coast ICEE test progressing, which is great to hear. Can you update us on how the Taco Bell limited time offer performed? And their thoughts on the performance and maybe where that relationship could go from here?
Yes. Two questions there, I think. Let me talk about the West Coast QSR test with ICEE. Excited about that one, continuing to expand. We're actually rolling out into another market right now, which is claimed to be the last test phase of this with a potential decision to be made before we even exit summer. So really excited about where that one is going. The Taco Bell volume in the quarter wasn't as great as we originally had anticipated. There's some volume from it that will still come through in this next quarter. The relationship is strong, and we think there's an opportunity to be able to come back and do some more with that customer.
The next question is from Scott Marks with Jefferies.
I wanted to just ask a little bit about the retail business, if I could. I know you called out some of the innovation initiatives, some of the higher trade and slotting fees associated with getting those in store. Wondering if you can just help us understand maybe demand for some of those products where they are in market just in terms of volumes and consumer response, even beyond just the trade and slotting fees that you called out.
Yes. It's early still. They just started to kind of roll out in the back half of the quarter, but really excited about the opportunities that we have in retail. One of the things we learned last year as you get into the second quarter is you do need to up your trade spend to have your frozen novelties in place as you get into the third and fourth quarter. That was a mistake we called out last year. And so some of that trade spend that's happening in Q2 will benefit us now in Q3 and Q4. The slotting fees associated with some of our new products, those new products appear to be kicking off really well. We have the Dogsters brand that's doing really good. Our Luigi's is rolling out mini pops really nicely. The soft sticks are doing pretty good. And then the one that we keep counting more than anything is the high-temp Dippin' Dots, and we expect that to do really, really well for us as we get into the back half of the year.
Okay. Understood on that. I appreciate the thoughts there. If I could just shift over to the foodservice side of things. I know Shawn called out. If we put aside the bakery SKU rationalization, Shawn called out a few moving pieces in the quarter with, I think it was a cookie inventory reduction at a certain retailer and also some weaker volumes from the Taco Bell program that has been running. Just wondering if you can help us understand maybe how we should be thinking about cadence or trajectory for that foodservice business moving ahead, just given some of these moving parts that we saw in the quarter.
Yes. Good question, Scott. Yes, you identified those moving pieces there. Look, I mean, as it relates to the cookies with a customer that was -- that had reduced its volumes because of inventory level, we're already seeing those volumes pick up. So don't expect that to be a headwind in upcoming quarters as it was in Q2. Pretzels continue to be strong. We did $6.7 million in pretzel sales in foodservice in the quarter. I think that in the prior quarter, we were up around $4 million in foodservice pretzels. So it continues to perform well, and we're confident that we're going to continue growing that business.
And I can tell you, too, that even though we had -- unfortunately, some didn't quite realize the benefits from that LTO that we were hoping. We do expect -- we do have a couple of initiatives in the pipeline around churros for the back half of the year that could have some promise. I won't get into any more detail on it now, but hoping that maybe with the next call, we'll be able to post you.
Okay. I appreciate the thoughts there. And maybe if I turn over to the OpEx side, you made some comments about the distribution costs and not having realized the efficiencies from Apollo in that yet. Can you help us understand, is that the main driver of distribution as a percent of sales being up on a year-over-year basis? Or was there some other dynamic in the quarter that had an impact on that part of the P&L?
Yes, great question. So you've got about $400,000 in fuel that we flagged in our fuel costs. And of course, that was really all coming from the exposure in March when diesel prices started to rise. The other piece of that is we had about $200,000 worth of higher dry ice costs, and that was weather related, so we don't expect that to be recurring. The other piece is we did have some cost shift around between distribution and cost of sales. And so that led to about $500,000 increase in cost of sales -- I'm sorry, in distribution relative to cost of sales.
This concludes our question-and-answer session. I would like to turn the conference back over to Dan Fachner for any closing remarks.
Thank you, operator. In closing, I want to emphasize that our Q2 results demonstrate that our transformation project is taking hold, and we can drive earnings growth despite some top line softness. We're building momentum for sustainable growth. Our strong balance sheet provides flexibility to invest growth opportunities while returning capital to shareholders. We remain confident in our ability to deliver the full benefits of Project Apollo and drive long-term value creation. Thank you again for your continued support, and we look forward to updating you on our progress throughout fiscal 2026. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
J & J Snack Foods Corp. — Q1 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by. Welcome to J&J Snack Foods First Quarter 2026 Conference Call.
[Operator Instructions]
Please be advised that today's conference is being recorded. I would now like to turn the conference over to Reed Anderson with ICR. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining the J&J Snack Foods Fiscal 2026 First Quarter Conference Call.
Before getting started, let me take a minute to read the safe harbor language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements, including statements regarding management's plans, strategies, goals expectations and objectives as well as our anticipated financial performance. This includes, without limitation, our expectations with respect to the success of our cost savings initiatives and customer demand improvements in the sales channels in which we operate.
These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risk Factors and other items discussed in our annual report on Form 10-K and other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on the call today. As such, forward-looking statements represent management's estimates as of the date of the call today, February 3, 2026.
While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause expectations to change. In addition, we may also reference certain non-GAAP measures on the call today, including adjusted EBITDA, adjusted operating income or adjusted earnings per share, all of which are reconciled to the nearest GAAP measure on the company's earnings press release which can be found in our Investor Relations section of our website. Joining me on the call today is Dan Fachner, our Chief Executive Officer; along with Shawn Munsell, our Chief Financial Officer. Following management's prepared remarks, we will open the call for a question-and-answer session. With that, I would like to turn the call over to Mr. Fachner. Please go ahead, Dan.
Good morning. I'm pleased to report that our earnings recovery is underway and gaining momentum. We delivered adjusted EBITDA of $27 million on sales of $343.8 million in the first quarter representing a 7% increase in adjusted EBITDA compared to the prior year. Results in the quarter included $1 million of unfavorable impact associated with product disposal costs. Our performance demonstrates the early benefits of Project Apollo transformation initiatives and our continued focus on operational excellence. Our first quarter results reflect meaningful progress on several fronts. Gross margin improved 200 basis points to 27.9% versus the prior year, driven by our early Apollo savings associated with plant consolidation and improved product mix.
While net sales declined 5.2% to $343.8 million, most of the decline is attributed to our bakery business as we focus on higher-margin opportunities. About $18 million of the revenue decline versus prior year was in that piece of business. Of this, about $13 million was related to SKU optimization efforts associated with Project Apollo. The remaining bakery sales declined included other lower-margin products, which aligns with our portfolio optimization strategy. We expect portfolio optimization will represent an approximate 3% decline in sales in fiscal '26. We also believe that sales in the quarter were impacted by the government shutdown and the pause in SNAP benefits.
Looking at our syndicated retail data, we did see a dip in dollar sales in mid-November that coincided with the pause in SNAP benefits with the largest impact in frozen novelties. Project Apollo is progressing as planned. Although we're still in the ramp-up phase and not yet at the full run rate, we realized over $3 million of net savings in Q1 with plant consolidation on track to be fully implemented during our fiscal second quarter. We remain confident in achieving $20 million of run rate operating income once all initiatives are activated. During the quarter, we completed our share repurchase authorization by purchasing $42 million of stock, demonstrating our confidence in the business and our commitment to returning cash to shareholders. Further, today, we announced a new $50 million repurchase authorization.
Now I'll turn to commercial activities. We have solid momentum in our snack portfolio and I'm especially encouraged by our pretzel performance in the quarter. In Food Service, pretzel sales were up an impressive 6.9%, reflecting the continued success of our Bavarian formulas. We also realized a 1.8% increase in food service share in the 13 weeks ending December according to syndicated data. Growth in the quarter included new business with some of our large distribution customers. We also launched Bavarian Bites and twists at a major theater chain. Looking at our retail syndicated data, pretzel sales were up about 4% for the 13 weeks ending December. We attribute the improving trends to the new formulation and packaging released last year. In frozen novelties, Dogsters continues to be the standout performer, with volume growing over 20% in the quarter with a new item launched late in Q1 and another launching in Q2.
Retail partners have been positive regarding our innovation and we continue to anticipate incremental distribution gains across regional and national customers in fiscal 2026. Dippin' Dots sales were up approximately 4% in the first quarter, fueled by retail growth, theater expansion and amusement centers. At ICEE, we continue to pursue opportunities to expand at convenience and QSR. The rollout to a large Southwest convenience store operator is now complete and the test with a major West Coast QSR operator continues to show encouraging results as the test market expands. Looking ahead, our innovation pipeline remains robust. During Q2, we'll be shipping several exciting new products, including 2 new releases of protein and whole-grain pretzels, Luigi mini pops with hydration and immunity benefits, Dippin' Dots Sunday flavor extensions and the launch of traditional Dippin' Dots for retail, a major growth milestone for that brand.
While box office performance that aligns to our fiscal first quarter was disappointing, with an estimated decline to the prior year of about 10%. We remain optimistic about the theater performance for the balance of fiscal 2026. We saw improved theater trends in January, primarily from the success of the Avatar movie. The movie slate for the balance of the year includes some promising titles, including the Super Mario Galaxy movie, Minions 3 and Spider-Man: Brand-new Day. I'll now turn the call over to Shawn to discuss the quarter results in more detail. Shawn?
Thanks, Dan, and good morning, everyone. As Dan mentioned, we're pleased with our Q1 performance, which demonstrates early progress on our transformation initiatives. Food Service segment net sales declined $19.7 million or 8.3% to $219.2 million, with $18 million of the decline attributed to our lower-margin bakery business largely reflecting steps we are taking to improve product mix. Handheld sales declined approximately $5 million in the quarter due to lower comparative volumes and contractual pricing true-up on lower cost of certain ingredients. Soft pretzel sales increased $3.6 million or about 6.9%, continuing the momentum from the second half of fiscal 2025.
Retail segment net sales increased $1.2 million or 2.6% to $45.9 million, primarily driven by a $1.8 million increase in handheld volume as we lapped last year's capacity constraints from the facility fire. Sales within the remaining retail portfolio decreased about $600,000 primarily driven by lower Frozen novelty sales as growth in Dogsters and Dippin' Dots was more than offset by decreases in other novelties. Frozen beverage net sales were materially flat at $78.7 million. Beverage sales were up modestly, where our service and machine sales combined were down modestly. Consolidated gross margin improved 200 basis points to 27.9% primarily reflecting Apollo initiatives, including a reduction in lower margin sales. Results included product disposal expenses of approximately $1 million. Tariff-related costs were approximately $600,000 net of pricing offsets. We do expect some tariff impact to subside over the course of fiscal '26.
Operating expenses increased $95.4 million which included $6.1 million in nonrecurring plant closure costs and other nonrecurring impacts. We expect additional nonrecurring transformation project costs of approximately $5 million in fiscal '26. Selling and marketing expenses increased 9.9% or $2.8 million compared to the prior year quarter. Approximately 140 basis points of the increase was associated with higher commissions for retail vending sales which is a growing component of our Dippin' Dots business. Investments to support our brands in preparation for our peak summer season accounted for roughly 250 basis points of the increase. Higher depreciation associated with customer equipment accounted for approximately 190 basis points of the increase with almost half of that associated with growth in Dippin' dots. We expect these investments to generate growth during the peak summer season.
Distribution expenses declined $1.6 million or 3.9%, primarily due to lower volume. Distribution expenses were 11.1% of sales as compared to 10.9% in the prior year. Administrative expenses were $20.4 million, an increase of 7.8% from the prior year. Approximately 300 basis points of the increase was related to nonrecurring restructuring charges and legal fees. Adjusted operating income was $8 million compared to $8.2 million in the prior year. Adjusted EBITDA increased 7% to $27 million versus $25.3 million last year. The effective tax rate was 27%. On a reported basis, earnings per diluted share was $0.05 compared to $0.26 last year, primarily reflecting the impact of onetime charges. On an adjusted basis, earnings per diluted share was $0.33 in line with last year.
Our balance sheet remains strong with approximately $67 million in cash and no long-term debt. We had approximately $210 million of borrowing capacity under our revolving credit facility. During the quarter, we generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures. As Dan mentioned, during the quarter, we completed our share repurchase authorization by buying back just over 458,000 shares for $42 million or an average price of about $91.60 per share. Including shares bought in fiscal 2025, we repurchased just over 525,000 shares for $50 million or an average price of about $95 per share. That concludes our prepared remarks, and we are now ready to take your questions. Operator?
[Operator Instructions]
Our first question comes from Jon Andersen with William Blair.
2. Question Answer
I have one question on sales and then one on Project Apollo and cost outs. Beginning on sales, you mentioned that the SKU rat is now expected to kind of be a headwind of about 3 percentage points on a full year basis. That makes sense, I understand and is consistent with what you've talked about in terms of portfolio optimization work. But what I'm trying to kind of get to is how you're thinking about the full year in the context of that. I know you have kind of an underlying long-term objective of growing the business organically in the mid-single digits. But again, I think we have to net out the 300 bps related to the SKU rat this year.
So -- and then I know there are some things that are building through the year as well in terms of commercial innovation, some new business wins. Are you looking for or expecting or budgeting to grow the business, headline sales on a full year basis? And how might that kind of ramp from the number that you printed in Q1 work from here? And then I'll follow up with a question on Project Apollo.
Great. Thank you, Jon. Yes, great question. And just to start off, we're really pleased with the way that the quarter shaped up. It's really what we had talked about to begin with, with Project Apollo and are very happy with the way that it is shaping up so far. The sales results in Q1 were just slightly softer than we anticipated, and that's due to the ramp-up of being able to consolidate those plants.
We have 3 of them that were consolidated. One is fully done at this point. One's kind of halfway there will be done shortly. And then the final one will be done by the end of this quarter which puts us at a full run rate. So Jon, can you hear us?
Yes.
Okay. Good. Sorry, we got a little interruption here. I apologize for that. So overall, we're happy with where the quarter landed much like what we have talked about all along with you. As it looks towards long term and where we might shake out for the year, like you talked about, we have a lot of great new business, great innovation coming on. And yes, about 3% impacted by the SKU rationalization that was escalated during this quarter because the speed in which we are able to consolidate those branches. We still look towards low single digits growth for the entire year, though. We think that we're in a good position with all the great things that we have going on to kind of land the plane there in that low single-digit growth.
Yes. And that's low single digits, Jon, on kind of the remaining portion of the portfolio.
Got it. On the x SKU rat portion?
Yes, that's right.
Okay. Fair point. And then you mentioned that Project Apollo, I think, delivered $3 million of cost savings in the quarter. I guess, the run rate you're looking to achieve once complete with Phase 1 is $20 million. What else needs to happen to get to the $20 million annual run rate? And if you had to kind of point to a time frame this year, when you hit that stride, when do you think that might be?
Yes, we really believe that we'll be there here in the second quarter. The team has done a tremendous job getting us to this position and we talked about that $20 million annual run rate. And we believe that we will be fully capable of doing that starting in Q2.
So that's the plant consolidation component. So if you remember, Jon, $15 million of the $20 million is associated with plants. So we were closing in on that full run rate in Q1. We expect to hit it in Q2. A lot of the work has been done in terms of shutting down those plants, transferring inventory, all the closure and consolidation work. We expect that to be complete this quarter. The remaining $5 million, if you remember, that's a mix between distribution expense savings and G&A savings and we expect to be on the run rate. We'll be ramping up in the third quarter of this fiscal year and then should be on the full run rate for that remaining $5 million by the fourth quarter.
Super helpful. Maybe I -- if I could squeeze one more in. I know that the commodity environment has not been a helper for you in recent years, and there have been certain pockets within your cost of goods basket like eggs and cocoa. But can you give us an update on where things sit now? Are those less of a headwind moving forward? And how are you kind of thinking about just kind of inflation? And also what you're doing overall from a portfolio perspective and the impact on gross margin, you had a nice step-up in Q1, 200 basis points.
And I'm wondering if we should be thinking about that kind of level of improvement year-over-year persisting as we move forward. And I know the plant consolidation is part of that, but there are probably other factors in there as well, portfolio mix, commodity costs, et cetera.
Well, the plant consolidation and the addition of some of the new business and our continued kind of mantra of margining up. So we're seeing some really nice things come through with all 3 of those things. Commodity pricing, I think we'll be a little bit in our favor this year. Last year, we really struggled in this quarter and Q2 with some headwinds, like you talked about with cocoa and eggs. But overall, we believe this year that there's a good chance that, that will kind of be in our favor.
And one other thing I meant to add to, Jon, is that the $1 million worth of product disposal costs that we incurred in the quarter, just to be clear, that was not adjusted out of our earnings. And so just think about the gross margin improvement in the context of that. If not for product disposal, we would have picked up another -- you've had another $1 million going through gross profit in the quarter.
And Shawn, that's something that doesn't -- that's done -- that's in the rearview mirror? That won't affect us?
Yes, that was just -- that was a onetime impact on some products that got on the spec.
[Operator Instructions]
I am showing no further questions in the queue. I will now turn the call back to Dan for closing remarks.
Thank you, operator. In closing, I want to emphasize that our Q1 results demonstrate that our transformation project is taking hold. The early benefits from Project Apollo, combined with our continued pretzel growth and strong innovation pipeline positions us well for fiscal 2026. With our strategic focus on higher-margin opportunities and operational excellence, we're building momentum for sustainable growth. Our strong balance sheet provides flexibility to invest in growth opportunities while returning capital to shareholders.
We remain confident in our ability to deliver the full benefits of Project Apollo and drive long-term value creation. Thank you for your continued support and we look forward to updating you on our progress throughout fiscal 2026. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.
J & J Snack Foods Corp. — Q4 2025 Earnings Call
1. Management Discussion
Good day, and thank you for standing by. Welcome to the J&J Snack Foods Fourth Quarter 2025 Conference Call.
[Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Reed Anderson with ICR. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining the J&J Snack Foods Fiscal 2025 Fourth Quarter Conference Call.
Before getting started, let me take a minute to read the safe harbor language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements. including statements regarding management's plans, strategies, goals, expectations and objectives as well as our anticipated financial performance. This includes, without limitation, our expectations with respect to the success of our cost savings initiatives and customer demand improvements in the sales channels in which we operate.
These statements are neither promises, nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risk Factors and other items discussed in our annual report on Form 10-K and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on the call today.
Any such forward-looking statements represent management's estimates as of the date of this call today, November 17, 2025. While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so even if subsequent events cause expectations to change. In addition, we may also reference certain non-GAAP measures on the call today, including adjusted EBITDA, adjusted operating income or adjusted earnings per share, all of which are reconciled to the nearest GAAP measure on the company's earnings press release, which can be found on our Investor Relations website.
Joining me on the call today is Dan Fachner, our Chief Executive Officer; along with Shawn Munsell, our Chief Financial Officer. Following management's prepared remarks, we will open the call for a question-and-answer session.
With that, I would now like to turn the call over to Mr. Fachner. Please go ahead, Dan.
Good morning. I am pleased with our fourth quarter results. Despite a challenging backdrop during the summer, we delivered adjusted EBITDA of $57.4 million on sales of $410.2 million, down 3.9% on sales versus the prior year. As anticipated, over half of the sales decline was associated with our frozen beverage business as we lap strong volumes from the Inside Out 2 movie last year. Pretzel sales in both retail and foodservice rose in the quarter, reflecting progress on key initiatives to drive growth through innovation. Pretzel growth helped to offset some declines in frozen novelties that we are addressing through marketing, trade spend and innovation.
For the full year, adjusted EBITDA was $180.9 million, while net sales increased 0.5% and to $1.58 billion. Although 2025 was a more challenging year. I'm encouraged by our operational execution in the second half, which puts us in a strong position moving forward. Some bright spots for fiscal 2025 include: we achieved record sales and adjusted EBITDA in fiscal Q3. We modernized our flagship super pretzel product with a recipe enhancement and fresh packaging. The effort to reinvigorate our pretzel business led to a 2.7% pretzel sales increase in 2025, driven by a strong second half performance with sales up 8% compared to the prior year.
The rollout of Dippin’ Dots to theaters was substantially completed with a presence now in almost 1,600 theaters. Dippin’ Dots Sundaes were launched at retail with great success, adding approximately $5 million to the top line. We optimized our Frozen Beverage distribution and service network, which reduced expenses by 2% in the fourth quarter.
Now I'll talk through some initiatives underpinning our optimism for fiscal 2026. To start, we have initiated a business transformation program, which we are calling Project Apollo that will generate sustainable efficiencies and and cost savings across the enterprise. Some key elements are already underway, and we expect the program to deliver at least $20 million of annualized operating income once all the initiatives are implemented in 2026. The initial focus of Project Apollo is consolidation of our manufacturing network. During the fourth quarter and early in the first quarter of fiscal 2026, we announced the closure of 3 facilities: Holly Ridge, North Carolina, Atlanta, Georgia and Colton, California. Production from these facilities will either be consolidated into other facilities or discontinued as part of our ongoing portfolio optimization.
The closures reflect the next logical step in the evolution of our manufacturing footprint and are enabled by the investments we have made in our plans to modernize and expand capacity for core products and to build out our regional distribution centers. We expect annualized savings associated with the plant closures of approximately $15 million, which should be materially complete in Q2 of fiscal 2026. We are also undertaking various initiatives within our distribution system that will generate approximately $3 million of annualized savings. The remaining net savings from Project Apollo are associated with various administrative initiatives, we expect to realize most of the annualized freight and administrative-related savings. We expect to realize most of the annualized freight and administrative-related savings by the third quarter of fiscal 2026. The initiatives I have just outlined represent the first phase of Apollo.
We are working on a second phase that is focused on generating further efficiencies within the plants following the completion of the consolidation work. We are also developing a robust road map for modernizing our system and tech infrastructures to streamline additional corporate processes and sharpen the quality of our data analytics. We'll be sharing more as the next phase of the project work is finalized. I am energized that the projects we have identified will generate durable structural savings and will do so relatively quickly in fiscal 2026. I'm encouraged by the impact that these actions are having on our early performance so far in Q1. Our operating teams are focused on the closures and seamless redeployment of production within our network to prevent any disruption to customer orders. I'm also excited about several commercial and innovation initiatives that are being rolled out for our fiscal 2026. Starting with the commercial activities. We will commence shipping churros to a major QSR later in fiscal Q1 as part of a limited time offer program. We expect the program to be successful given it is such a great fit with this customer and believe there is potential to be converted to a permanent volume.
We are completing the rollout of ICE machines for a large and growing convenience store operator in the Southwest. The frozen beverage test with a major West Coast QSR operator is nearly complete, and we are encouraged by the results. And the handheld capacity outage should be remedied by the start of our second quarter. With respect to innovation, we have several exciting launches around the corner for fiscal 2026, with most of these products available to consumers beginning the fiscal second quarter. These innovation items underscore the quality and breadth of our iconic brands. Our new protein pretzel for retail will be available for consumers as a 4-pack of large pretzels with 10 grams of protein or a smaller mini pretzel with 7 grams of protein per serving. We are rolling out SUPERPREZL pizza sticks and queso sticks, which are smaller pretzel bites with tasty fillings. On the frozen novelty front, we are introducing Luigi's mini pops, which feature exciting flavor profiles and better-for-you attributes such as hydration and immunity support. We are extending our popular pet treat brand, Dogsters to include a new mini ice cream sandwich. Regarding Dippin' Dots innovation, I am pleased to announce that we will be launching Dippin' Dots in its original form for retail. This represents another major growth milestone for the brand.
Additionally, we are introducing 2 new flavors to the Dippin’ Dots Retail Sundae lineup, taking the flavor total to 4. The outlook for theaters also is encouraging as the industry continues closing the gap to the pre-COVID environment, box office sales for the period that aligns to our fiscal 2025 and were up 10% versus the prior year. Industry sources are projecting North America box office sales that aligns with our fiscal 2026 to increase by 9% and supported by a great lineup of movies that includes Wicked for Good, Zootopia 2 and Spiderman, a Brand-New Day. The lineup for our fiscal first half looks particularly promising as compared to last year's slate. With $106 million in cash and no debt, our financial position remains strong, and we continue to take a balanced approach to capital allocation across 3 areas: investing in our business to drive growth and operational efficiency, strategic acquisitions and returning capital to shareholders through dividends and share repurchases.
Given the current trends of our business and outlook for fiscal 2026 including the benefits we expect to realize from Project Apollo. We expect to increase our focus on share repurchase activity as we see compelling value in our shares. Share repurchases totaled $3 million in the quarter, and we intend to accelerate our pace significantly during the current quarter.
I'll now turn the call over to Sean to discuss the quarter and full year results in a little more detail. Shawn?
Thanks, Dan, and good morning, everyone.
Before I discuss our results, I'd like to share a change in our presentation of financial results. Starting with the fourth quarter, we no longer allocate all corporate expenses to segment results, with some expenses now captured as unallocated corporate expenses. This methodology change has been applied to our historical results. As Dan indicated, we are pleased with our Q4 performance and believe we are well positioned early in fiscal 2026. Foodservice segment net sales declined 1.1% to $259.3 million as volume softness more than offset price increases. Soft pretzel sales increased 3.6%, marking consecutive quarters of year-over-year sales growth. The Varian pretzel sales continue to lead the growth. Pretzel dollar share increased 1% in the quarter. Frozen novelties declined 5.1%, driven primarily by a transition between the LUIGI's and ICEE branded products. We expect volumes to normalize over time. Churro volume declines primarily reflect the wind down of last year's LTO with a major QSR customer. Retail segment net sales declined 8.1%, primarily driven by lower frozen novelty volumes, partly offset by higher pretzel volume. We are taking action to support our frozen novelty business with shopper marketing and trade spend, and we see improving trends in the recent 4-week data.
Dogsters continues to stand out of the portfolio with sales and units up in the quarter, and we anticipate additional distribution in 2026. Handheld sales declines reflect the temporary capacity constraints from the fire in our North Carolina facility last year. Soft pretzel sales increased 9%, continuing the momentum from the third quarter. Frozen Beverage segment sales declined 8.3%, attributed to lower beverage volume in the quarter. Foreign exchange translation did not have a significant impact on segment results in Q4. Beverage volume declined primarily due to lower theater sales as we lapped the success of the Inside Out 2 movie last year. Box office sales for our fiscal fourth quarter are estimated to have declined approximately 11%. As I mentioned earlier, we expect the theater industry to continue its rebound in 2026, and we're encouraged by the solid lineup of movies that we expect will be popular with our target consumers.
Consolidated gross profit was $130.2 million compared to $135.5 million last year, while gross margin was 31.7% compared to 31.8% last year. Gross margin in Frozen Beverage declined given the lower mix of Beverage revenue in the quarter. Tariff costs added approximately 35 basis points to cost of goods. These unfavorable impacts were partly offset by insurance proceeds for business interruption costs related to our handheld capacity constraints and early plant consolidation savings in the quarter. Operating expenses increased 24% to $118.8 million or 29% of sales, which included $24.8 million of nonrecurring charges, primarily related to Project Apollo plant closures. Plant closure charges predominantly reflect noncash asset write-downs and write-offs totaling approximately $21 million. We expect additional plant closure and other nonrecurring costs associated with our business transformation project of $3 million to $5 million in fiscal 2026. Marketing expenses were $32.6 million or 4.8% higher than in the prior year, driven by increased spending on new sponsorships and other promotional activities.
Distribution expenses for the quarter declined 8.3% on lower volume and steady efficiency gains. The efficiency gains were driven by fewer internal transfers and better truck utilization. Distribution as a percentage of sales declined to 10.3% compared to 10.8% in the prior year. Administrative expenses were $19.1 million, an increase of 5.1% from the prior year primarily associated with higher compensation expenses. Adjusted operating income was $37.7 million as compared to $42 million in the prior year. Adjusted EBITDA for the fourth quarter was $57.4 million versus $59.7 million last year. The effective tax rate for the quarter was 4.8% compared to 26.8% in the prior year. adjusted earnings per diluted share were $1.58 versus $1.60 last year.
The significantly lower effective tax rate in the quarter primarily reflects a change in estimate on our blended state tax rate and the corresponding impact on the valuation of our net deferred tax liabilities. Our balance sheet and liquidity position remains strong with approximately $106 million in cash and no long-term debt as of quarter end. We had approximately $210 million of borrowing capacity under our revolving credit agreement.
Let me briefly touch on full year results. Sales increased 0.5% to $1.58 billion as price increases helped to offset lower volume. Growth in Foodservice, which was up 1.6%, was partially offset by declines in retail, including from lower handheld sales related to the capacity constraints, while Frozen Beverage was essentially flat. Unfavorable foreign exchange rates for fiscal 2025 reduced the top line by approximately 40 basis points. Adjusted operating income was $108.2 million as compared to $130.4 million in the prior year. Adjusted EBITDA for the fiscal year was $180.9 million versus $200.1 million last year. Adjusted earnings per diluted share were $4.27 versus $4.93 last year. That concludes our prepared remarks, and we are now ready to take your questions. Operator?
[Operator Instructions] Our first question comes from Jon Anderson with William Blair.
2. Question Answer
Dan, Shawn, I wanted to start by -- you mentioned some portfolio optimization work that is going on and that's 1 of the reasons why the closure of the 3 facilities you were able to do that while kind of moving production -- on production that you're going to keep. Can you talk about the impact of that portfolio optimization on sales, both kind of in the quarter, but then how to think about that perhaps going forward as we look to kind of 2026 and what impact that might have on the top line. Start there.
Sure, Jon. Thank you. That's a continuation of the things that we've been talking about for a while, especially as it relates to our bakery group of optimizing that portfolio. And then as you look at our plans and the consolidation that we've been working on with the plants. It just made sense that during this timing that we'd be able to optimize the portfolio that we have and be able to consolidate some of these plants. The total impact of that, if you think about our business growing in that mid-single-digit rate year-over-year, might be a 1%, 1.5% impact on that overall sales. But we're kind of bullish. It's the play that we called a couple of years ago as we continue to build efficiencies inside our system and put in some new plants or new lines within our plants and then rebuild the distribution system now allows us to be able to go back and optimize, and we're really excited about that work that's being done.
And in terms of timing, Jon, you don't think about that as we kind of near that full run rate sometime in Q2.
Okay. Helpful. And maybe stepping back even a little bit more, but I know you don't -- haven't provided or don't provide specific guidance. But as we exit '25 and think about '26 at this point, there are quite a few moving parts, some of which should be tailwinds and some of which might be a bit of a headwind, but headwinds for the right reason in terms of the portfolio work. Can you talk at all about just kind of the macro environment and kind of try and combine that to the extent you can with some of the internal initiatives to give us some sense of how you're thinking about '26, both from maybe a top line perspective, but also a margin standpoint because with the transformation work that's happening, I think some of the pricing that you've been able to implement and may implement to offset commodity costs, there's a lot of -- there a lot of different ways that we could go with this. So just want to get your any commentary you could provide forward-looking around that.
The macro environment, if I start there first, we still think that there's a consumer sentiment that is cautious, right? And so we're going to continue to watch that, especially as it relates to our retail side of our business. But we're really feeling some good momentum as we exit '25 and enter into '26 with some of the great things that we have going on, the plant closure benefits that we already talked about, some tremendous innovation. The teams are doing a really, really good job with that. And we feel positive as we move into 2026 and some even early results in Q1.
And we think the theater industry is bouncing back some. So we feel good about the overall business as we move into it. We think back at '25 and we think of some of the challenges that we face there, and you can kind of tally it up to just a few primary factors. We had that big Turo LTO that we're not facing anymore. We had some unfavorable foreign exchange impact. We had the chocolate cost inflation. Most of that hit us in the first half of the year. But when you really look at the second half of the year, the second half EBITDA was just shy of what we delivered in the second half of '24. So for all those reasons and the Apollo that we're doing, we're really -- we're a little bullish on 2026 as we turn that page.
You'll see those closure benefits relatively quickly in the P&L. We just announced the closure of that third facility. So consider by the time you get to the second quarter, we should be at or very near that full run rate.
And Shanw, on that, you mentioned the full run rate. Do you mean on the plant closures or the kind of the...
Yes, that's right. So on the plant closure component of $15 million, we should be very near that full annualized run rate come in the second quarter. And then the rest of those savings, think about that sort of layering in, in the third and the fourth quarter for the balance of the year.
Excellent. Super helpful. Just 1 more question. You talked about maybe a little bit of a near-term or short midterm adjustment to your capital allocation approach with a greater focus on share repurchase. Can you talk about -- just kind of ongoing how you kind of evaluate that? And what kind of acceleration or step up, we might anticipate there to the extent that you can comment on it.
Yes. So yes, for sure. And we said in the prepared remarks that we intend to accelerate our stock buybacks here in the quarter when the window opens. Just for context, and I'm not implying that this is the amount by which we're going to execute. But we've got about $42 million remaining on the authorization that we implemented earlier this year. We did buy back about $3 million worth of stock in the quarter. But notably, we pulled back a little bit on that. There was some M&A in the pipeline and we thought that it would be a prudent thing for us to do. But we'll be buying back some stock this quarter.
Maybe I have to follow up on that one. You just mentioned M&A in the pipeline. Can you comment at all on that? Should we be thinking about some near-term actions there?
I wouldn't go that far, Jon. We were looking at a couple of different things that just caught our attention. And -- and so at the period of time where we had the window open to be able to buy some stock back, we were just trying to take a conservative approach there. But I would not go as far as to see anything imminent on the M&A front.
Okay. And looking forward to a strong '26 behind these initiatives.
Our next question comes from Scott Marks with Jeffries.
I wanted to ask first about this efficiency initiatives. You mentioned Project Apollo, and then you mentioned kind of a second phase, where you're looking at some more automation and efficiencies within the existing or remaining facilities. Just wondering if you can share some more color on that and how we should be thinking about the time line for that maybe expected benefits?
Yes, sure. So the way I think about that is probably going to be later '26, but more likely 2027. And I'd say that, that's going to be a combination of just automation and process improvement. once we get the consolidation work behind us, you think about it as just making those plants more efficient. You've got some plants that are going to be taking on new production. So for 2027, it's -- for '26, it's optimize the network and then 2027 kind of optimize further within the 4 walls of each of those plants.
That's helpful. Appreciate that. And then next question for me. touched on some challenges in the frozen novelty business within retail. Wondering if you can kind of share any color on what's been happening there and how we should be thinking about the stabilization of some of those?
We touched on that at the end of last quarter. That's just a segment where the consumer probably has hit the hardest and really saw those -- most of that impact in July of this quarter. The teams have been working really hard at greater marketing and trade spend within that category. And we're starting to see it come back, and we think that will continue to come back over this next year.
We actually feel like we've corrected the things that we needed to correct, and I'm really pleased. I met with that retail team this last week, and they're doing a nice job. And I think we'll see that come back over this next year. But it is an area where I think just as consumer sentiment where you'll see the biggest challenges. So don't forget that it's frozen novelties, it's summertime. So if you this July, it's hard to make those back up in the back half of the quarter. But the teams are working hard at getting the right trade spend as it relates to those.
And again, we -- it was in the prepared remarks, but we've got a great pipeline of frozen novelty innovation planned for 26 that's just around the car. So we're excited about that. And going back to your prior question, Scott, I feel to mention that I didn't want to imply that sort of like all the additional automation is going to be in '27. If you look at closure of the Colton plant and the consolidation into a nearby plant in California, that was taking what was basically production through manual process and converting it to almost fully automated process at the plant that is being shifted to
[Operator Instructions] Our next question comes from the line of Todd Brooks with the Benchmark Company.
To talk to you about few questions kind of feeding off some of the things that you've heard earlier. Shawn, can we talk about -- I think we were talking about the consolidation or the rationalization of some of the bakery products and dinging a revenue algorithm by maybe 100 to 150 basis points in fiscal '26. So can you walk us through like where does the algorithm stand now for a baseline level? Does it still start in that mid-single-digit place and we back off to...
Yes, that's right. That's exactly right, Todd.
Okay. Great. And then the rationalization in bakery, when -- like how does that fall during the year? When should we see kind of the biggest drag from the the 100 to 150 basis points.
You'll start seeing it in the second quarter.
Okay. All right. Secondly, Dan, you've ripped through a list of exciting commercial opportunities for fiscal '26. Can you maybe drill down a little bit on the 2 or 3 that you think are the biggest needle movers and maybe status and timing? .
SP1 Yes. We're really pleased just in total with the pipeline that we
Yes. We're really pleased just in total with the pipeline that we have going through the system and have some really nice opportunities. We have the the LTO with the churros with a big customer that ran an LTO last year, and it's a perfect fit with this customer that we know is going to do well, and we have anticipations that it does so well that maybe it sticks also. So really excited about that particular one. On the frozen beverage side, we're in the midst of rolling out a large C-store in the Southwest that has the potential to continue to grow that they're striving to be the third largest C-store in the country. Also have talked a few times about a test that we have with the QSR in the frozen beverage in the West Coast. That just continues to do really, really well. We're in the third phase of testing now kind of bringing that to an end and having live conversations about how we might roll that out in this year. So I'm really encouraged by the things that we have going on.
The last thing I touched on was just that handheld that we were up against with the fire last year in August. And now are just about as we hit the second quarter should have that capacity caught up and see the benefits from that in 2026 as well. teams are doing a great job, a lot of really good opportunities and pipeline is as strong as I've seen in a while.
Okay. Great. And then a final one for me. Sean, is there a way to kind of frame up and I ask about kind of gross margin potential for the business. But obviously, you've identified savings from Apollo 1, you've identified a framework what would have Apollo 2 will consist of from maybe a plant efficiency and automation standpoint kind of post Apollo maybe, can you talk to you think the gross margin potential for the businesses?
Yes. I'd say that we're still committed to improving the gross margin, getting up above 30% on an annualized basis toward the mid-30s, let's call it. And you can do the math and see that just the $15 million of plant consolidation savings, all that's going to roll through your gross margin. Obviously, there's some OpEx savings associated with this leg of Apollo. But that's not going to get you all the way there, obviously, but it's going to help to close the gap. And I would think that we're just going to keep kind of chunking away at that over the next few years through Project Apollo and frankly, growing the business. The one thing we didn't talk about is the extent to which we can continue to grow the top line as we have historically and start seeing some leveraging impacts as we -- both at the plant level and with respect to OpEx.
Okay. And just a follow-up on that thoughts on CapEx in '26 based on the work that you're doing? .
SI would say about in line with fiscal '25, but we're working to trim that. .
That concludes today's question-and-answer session. I'd like to turn the call back to Dan Fachner for closing remarks.
Thank you, operator. In closing, I want to emphasize that while fiscal 2025 presented its challenges, we built significant momentum in early fiscal 2026 through our strategic initiatives and operational improvements. Our innovation pipeline is robust and should drive sustainable growth in key categories while Project Apollo enables meaningful efficiency improvements. With a strong balance sheet, including $106 million in cash and no debt, we're well positioned to invest in growth opportunities, while returning capital to shareholders through share repurchases.
Thank you for your continued support, and we look forward to updating you on our progress throughout fiscal 2026. Thank you very much.
This concludes today's conference call. Thank you for participating. You may now disconnect.
Financial data from J & J Snack Foods Corp.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 1,525 1,525 |
5%
5%
100%
|
|
| - Direct Costs | 1,048 1,048 |
7%
7%
69%
|
|
| Gross Profit | 477 477 |
0%
0%
31%
|
|
| - Selling and Administrative Expenses | 381 381 |
3%
3%
25%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 171 171 |
3%
3%
11%
|
|
| - Depreciation and Amortization | 76 76 |
4%
4%
5%
|
|
| EBIT (Operating Income) EBIT | 96 96 |
8%
8%
6%
|
|
| Net Profit | 49 49 |
41%
41%
3%
|
|
In millions USD.
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J & J Snack Foods Corp. Stock News
Company Profile
J&J Snack Foods Corp. manufactures nutritional snack foods and distribution of frozen beverages to the food service and retail supermarket industries. It operates through the following segments: Food Service, Retail Supermarkets, and Frozen Beverages. The Food Service segment includes soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products, and baked goods. The Retail Supermarkets segment offers soft pretzel products including Superpretzel, frozen juice treats and desserts, including Luigi's real Italian ice, Minute Maid juice bars and soft frozen lemonade, Whole Fruit frozen fruit bars and sorbet, Philly Swirl cups and sticks, ICEE Squeeze-Up Tubes and dough enrobed handheld products including Patio burritos. The Frozen Beverages segment provides frozen beverages to the food service industry primarily under the names ICEE, SLUSH PUPPIE, and PARROT ICE in the United States, Mexico, and Canada; as well as repair and maintenance service. The company was founded by Gerald B. Shreiber on September 27, 1971 and is headquartered in Pennsauken, NJ.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Fachner |
| Employees | 4,600 |
| Founded | 1971 |
| Website | jjsnack.com |


