Financial Data and Key Metrics Changes - Net sales for Q3 FY2025 decreased by 4% to $260.9 million compared to $271.9 million in Q3 FY2024, driven by a 7.9% decrease in sales volume, partially offset by a 4.2% increase in the weighted average sales price per pound [12][17] - Gross profit increased by $6.7 million or 13.7% to $55.9 million, with gross profit margin as a percentage of net sales rising to 21.4% from 18.1% in the prior year [15][16] - Net income for Q3 FY2025 was $20.2 million or $1.72 per diluted share, compared to $13.5 million or $1.15 per diluted share in Q3 FY2024 [17] Business Line Data and Key Metrics Changes - Sales volume decreased by 9.2% in the consumer distribution channel, primarily due to an 8.3% decrease in private brand volume, with a significant decline in bars volume [13] - Sales volume for branded products decreased by 12.9%, mainly due to a 33.8% reduction in Orchard Valley Harvest sales [14] - Sales volume increased by 6% in the contract manufacturing distribution channel, driven by increased granola volume processed [14] Market Data and Key Metrics Changes - The snack, nut, and trail mix category saw a 2% decrease in pounds but a 2% increase in dollars, indicating rising prices [24] - Fisher snack and trail mix experienced a 17% decline in pound shipments, while Southern Style Nut Brand saw a 10% increase in pound shipments [24][25] - The recipe nut category was down 1% in pounds but up 10% in dollars, reflecting increased prices for walnuts and pecans [27] Company Strategy and Development Direction - The company plans to invest approximately $90 million in equipment to expand domestic production capabilities and improve infrastructure by the end of FY2026 [5][6] - The focus remains on adapting strategies to meet evolving customer needs and managing costs amid rising commodity prices and tariffs [5][10] - The company is committed to innovation and cost-saving opportunities to mitigate commodity pressures while expanding distribution and brand awareness [11][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macroeconomic environment impacting demand for nuts and snacks, emphasizing the need for strategic execution [5][6] - There is confidence in the investments made in production and infrastructure to drive efficiencies and deliver innovation [6][30] - The company anticipates potential declines in commodity prices due to demand destruction from high retail prices, which may stabilize costs in the future [55] Other Important Information - The total value of inventories increased by 22.4% year-over-year, primarily due to higher quantities and costs of finished goods and raw materials [18] - The weighted average cost per pound of raw nuts and dried fruit increased by 33.9% year-over-year, reflecting higher commodity acquisition costs [18] Q&A Session Summary Question: Tariff exposure and passing costs to customers - Management indicated that discussions are ongoing with key customers to pass on tariff costs, particularly for high-volume items [33][34] Question: Profitability of cashew and mixed nuts segment - The cashew and mixed nuts segment remains profitable, but higher tariffs could challenge price increases and consumer demand [38][39] Question: Inventory transition and gross margin expectations - Management expects gross margins to stabilize, with inventory valuation adjustments providing a clearer picture of future profitability [44][56] Question: Investment in bar business - The $90 million investment includes expanding bar infrastructure, indicating growth potential in the bar category [45][46] Question: Strategy for upcoming quarters - The company is focusing on promotional programs and pricing strategies to navigate market volatility and ensure the right product mix [62]

Financial Performance - Net sales for the third quarter of fiscal 2025 decreased by $11.0 million, or 4.0%, to $260.9 million compared to $271.9 million in the third quarter of fiscal 2024[76]. - Net sales for the first thirty-nine weeks of fiscal 2025 increased by $41.0 million, or 5.1%, to $838.2 million compared to the same period in fiscal 2024[76]. - For the third quarter of fiscal 2025, net sales decreased by $10.98 million, or 4.0%, to $260.91 million compared to $271.88 million in the same quarter of fiscal 2024[86]. - Consumer distribution channel sales decreased by $11.24 million, or 5.0%, in the third quarter of fiscal 2025, with a sales volume decrease of 9.2%[88]. - For the first thirty-nine weeks of fiscal 2025, net sales in the consumer distribution channel increased by $43.81 million, or 6.7%, to $695.5 million[87]. - The commercial ingredients distribution channel saw a decrease in net sales of $4.7 million, or 5.6%, for the first thirty-nine weeks of fiscal 2025[91]. - Contract manufacturing distribution channel net sales increased by $1.8 million, or 2.9%, for the first thirty-nine weeks of fiscal 2025, with a sales volume increase of 25.2%[93]. Profitability - Gross profit margin increased to 21.4% for the third quarter of fiscal 2025, up from 18.1% in the same quarter of fiscal 2024[78]. - Gross profit for the third quarter of fiscal 2025 increased by $6.7 million, or 13.7%, to $55.9 million, with a gross profit margin of 21.4% compared to 18.1% in the same quarter of fiscal 2024[94]. - Income from operations for the third quarter of fiscal 2025 was $28.2 million, or 10.8% of net sales, compared to $18.4 million, or 6.7% of net sales, in the same quarter of fiscal 2024[102]. - Net income for the third quarter of fiscal 2025 was $20.2 million, or $1.73 per share, compared to $13.5 million, or $1.16 per share, in the same quarter of fiscal 2024[108]. Expenses and Costs - Total operating expenses decreased by $3.1 million, or 10.2%, in the third quarter of fiscal 2025 compared to the same quarter in fiscal 2024[79]. - Total operating expenses for the third quarter of fiscal 2025 decreased by $3.1 million, or 10.2%, to $27.7 million, representing 10.6% of net sales[96]. - The weighted average cost per pound of raw nut input stocks increased by 33.9% at the end of the third quarter of fiscal 2025 compared to the end of the third quarter of fiscal 2024[115]. Inventory and Capital Expenditures - The total value of inventories on hand at the end of the third quarter of fiscal 2025 increased by $47.1 million, or 22.4%, compared to the end of the third quarter of fiscal 2024[80]. - Total inventories increased to $257.8 million at March 27, 2025, reflecting a rise of $61.2 million, or 31.2%, from June 27, 2024[114]. - Capital asset purchases amounted to $37.2 million during the first thirty-nine weeks of fiscal 2025, compared to $17.5 million for the same period in fiscal 2024[116]. - The company plans to invest approximately $90.0 million in capital expenditures to expand production capabilities and enhance product offerings starting in the second quarter of fiscal 2025[111]. Cash Flow and Financing - Cash used in operating activities was $6.0 million for the first thirty-nine weeks of fiscal 2025, a decrease of $72.4 million compared to $66.4 million provided in the same period of fiscal 2024[113]. - Cash used in investing activities was $37.3 million during the first thirty-nine weeks of fiscal 2025, down from $76.5 million in the same period last year[116]. - Cash provided by financing activities was $44.1 million during the first thirty-nine weeks of fiscal 2025, compared to $8.5 million for the same period last year[117]. - Net borrowings under the Credit Facility were $69.2 million during the first thirty-nine weeks of fiscal 2025, up from $32.1 million in the same period of fiscal 2024[117]. - The available credit under the Credit Facility increased to $150.0 million as of September 29, 2023, with a maturity date extended to September 29, 2028[123]. - As of March 27, 2025, the company had $55.7 million of available credit under the Credit Facility, maintaining compliance with all covenants[126]. Challenges and Strategic Plans - The company faces challenges from higher food prices, supply chain issues, and changing consumer preferences impacting sales volume[66][67]. - The company plans to invest significant additional capital in fiscal 2025 to purchase new equipment and improve infrastructure to expand production capabilities[63]. - The Lakeville Acquisition contributed to the increase in net sales for the first thirty-nine weeks of fiscal 2025[84]. - The weighted average sales price per pound increased by 4.2% primarily due to higher commodity acquisition costs for all major tree nuts[84].

Financial Performance - Net sales for Q3 fiscal 2025 decreased by $11.0 million, or 4.0%, to $260.9 million, attributed to a 7.9% decrease in sales volume [3] - Diluted EPS increased by 49.6% to $1.72 per share, reflecting improved gross profit despite a decline in sales volume [4] - Gross profit increased by $6.7 million to $55.9 million, with gross margin rising to 21.4% from 18.1% in the prior year [9] - Gross profit margin decreased from 20.6% to 18.5% for the nine-month period, mainly due to increased commodity acquisition costs [17] Inventory and Assets - The value of total inventories increased by $47.1 million, or 22.4%, primarily due to higher quantities and costs of finished goods [11] - Inventories increased to $257,798 million in March 2025, up from $196,563 million in June 2024, reflecting a rise of 31.1% [23] - Total assets increased to $589,976 million in March 2025, up from $515,575 million in June 2024, representing a growth of 14.5% [23] - Cash reserves rose significantly to $1,295 million in March 2025, compared to $484 million in June 2024, marking an increase of 168.6% [23] - Accounts receivable decreased to $74,538 million in March 2025 from $84,960 million in June 2024, a decline of 12.2% [23] - The company reported a significant increase in prepaid expenses and other current assets, rising to $15,565 million in March 2025 from $12,078 million in June 2024, a growth of 28.3% [23] - The operating lease right-of-use assets increased to $28,871 million in March 2025, compared to $27,404 million in June 2024, reflecting a rise of 5.3% [23] Liabilities and Equity - Current liabilities rose to $173,991 million in March 2025, compared to $125,940 million in June 2024, an increase of 38.1% [23] - Total stockholders' equity increased to $346,613 million in March 2025, up from $322,613 million in June 2024, a growth of 7.4% [23] - Long-term debt decreased slightly to $5,765 million in March 2025 from $6,365 million in June 2024, a reduction of 9.4% [23] - Retained earnings increased to $207,968 million in March 2025, compared to $186,965 million in June 2024, an increase of 11.2% [23] Operational Insights - Sales volume in the consumer distribution channel decreased by 9.2%, driven by a 16.0% reduction in bars volume [5] - The commercial ingredients distribution channel saw an 8.3% decrease in sales volume, mainly due to competitive pricing pressures [7] - The company plans to invest approximately $90 million in equipment to expand domestic production capabilities by the end of fiscal 2026 [2] - The company is monitoring the impact of import tariffs on 15-20% of raw material purchases and is working with suppliers to manage cost increases [14] - Operating expenses decreased by $3.5 million to $90.1 million, driven by reductions in incentive compensation and advertising expenses [17]

Company Overview - John B. Sanfilippo & Son, Inc. is a major processor and distributor of snack and recipe nut products, as well as a snack bar manufacturer [3] - The company is based in Elgin, Illinois and markets products under various brand names including Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Just the Cheese [3] Upcoming Financial Event - The company will hold its quarterly conference call to discuss its third quarter fiscal year 2025 operating results on May 1, 2025, at 10:00 a.m. Eastern Time [1] - Third quarter fiscal 2025 results are expected to be released after the market closes on April 30, 2025 [1] Conference Call Details - Dial-in numbers for the call are 1-888-596-4144 from the U.S. and 1-646-968-2525 internationally, with a participant pass code of 9901839 [2] - The call will be webcast and accessible via the company's website at www.jbssinc.com [2]

Company Overview - John B. Sanfilippo & Son, Inc. is a major processor and distributor of snack and recipe nut products, as well as a snack bar manufacturer [3] - The company is based in Elgin, Illinois and markets products under several brand names including Fisher®, Orchard Valley Harvest®, Squirrel Brand®, Southern Style Nuts®, and Just the Cheese® [3] Upcoming Financial Events - The company will hold its quarterly conference call to discuss its third quarter fiscal year 2025 operating results on May 1, 2025, at 10:00 a.m. Eastern Time [1] - Third quarter fiscal 2025 results are expected to be released after the market closes on April 30, 2025 [1] Conference Call Details - Dial-in numbers for the call are 1-888-596-4144 from the U.S. and 1-646-968-2525 internationally, with a participant pass code of 9901839 [2] - The call will be webcast and accessible via the company's website at www.jbssinc.com [2] Investor Relations Contacts - Frank Pellegrino serves as the Chief Financial Officer and can be contacted at 847-214-4138 [4] - Investor relations can also be reached through John Beisler or Steven Hooser at Three Part Advisors, LLC, phone number 817-310-8776 [4]

Group 1 - Daniel Mellado is an economist with a Master's Degree in Statistics, experienced in analyzing agricultural commodities and financial investment portfolios [1] - He has managed trading and data analysis teams, focusing on investments in bonds, equities, and ETFs [1] - Mellado has transitioned to freelance work, developing and implementing algorithmic trading strategies [1] Group 2 - The analysis and valuation provided by Mellado will cover sectors including commodities, banking, technology, and pharmaceuticals [1] - Recommendations for buying and selling will be based on financial statements, regulations, and macroeconomic variables [1]

Financial Performance - Net sales for the second quarter of fiscal 2025 increased by $9.8 million, or 3.4%, to $301.1 million compared to $291.2 million in the second quarter of fiscal 2024[74]. - Gross profit margin decreased to 17.4% for the second quarter of fiscal 2025 from 19.9% in the same quarter of fiscal 2024, with a total gross profit decrease of $5.7 million[76]. - Net income for the second quarter of fiscal 2025 was $13.6 million, or $1.17 per common share, down from $19.2 million, or $1.65 per common share, in the same quarter of fiscal 2024[107]. - Cash flows from operating activities decreased to $19.9 million for the first twenty-six weeks of fiscal 2025, down from $61.2 million in the same period of fiscal 2024, primarily due to changes in working capital and lower net income[112]. - Interest expense decreased to $0.8 million for the second quarter of fiscal 2025, down from $1.1 million in the same quarter of fiscal 2024[102]. - The effective tax rate decreased to 24.0% for the second quarter of fiscal 2025, down from 26.1% in the same quarter of fiscal 2024, due to a larger than anticipated research and development credit[105]. Sales and Volume - Sales volume, measured as pounds sold to customers, increased by 7.1% in the second quarter of fiscal 2025 and by 14.9% for the first twenty-six weeks of fiscal 2025 compared to the same periods in fiscal 2024[75]. - Net sales in the consumer distribution channel increased by $55.0 million, or 12.9%, for the first twenty-six weeks of fiscal 2025 compared to the same period in fiscal 2024, driven by the Lakeville Acquisition[88]. - Sales of branded products accounted for approximately 21% of total consumer sales during the second quarter of fiscal 2025, with Fisher branded products representing about 72% of branded sales[84]. - Sales volume in the consumer distribution channel increased by 15.0% for the first twenty-six weeks of fiscal 2025, with private brand sales volume up 18.0% largely due to the Lakeville Acquisition[88]. Operating Expenses and Inventory - Total operating expenses for the second quarter of fiscal 2025 increased by $2.5 million, or 8.4%, compared to the second quarter of fiscal 2024, rising to 10.9% of net sales[77]. - Total inventories increased by $9.3 million, or 4.7%, to $205.8 million at December 26, 2024, primarily due to higher commodity acquisition costs for major tree nuts and chocolate[113]. - The total value of inventories on hand at the end of the second quarter of fiscal 2025 increased by $8.5 million, or 4.3%, compared to the same period in fiscal 2024[78]. Capital Expenditures and Investments - The company plans to allocate significant additional capital to purchase new equipment to expand production capabilities and enhance product offerings[65]. - The company plans to invest approximately $90.0 million in capital expenditures to expand production capabilities and enhance product offerings[110]. - Total capital expenditures for fiscal 2025 are expected to be approximately $65.0 million, primarily for equipment purchases to expand production capabilities[115]. Market Conditions and Challenges - The company anticipates ongoing challenges from higher food prices, supply chain disruptions, and potential economic downturns affecting consumer purchasing behavior[67]. - Cocoa market prices have reached new highs due to a third consecutive short crop, impacting ingredient costs and financial performance[72]. Financing Activities - Cash used in investing activities was $25.6 million during the first twenty-six weeks of fiscal 2025, a decrease from $69.9 million in the same period last year[115]. - Cash provided by financing activities was $5.6 million during the first twenty-six weeks of fiscal 2025, down from $8.8 million in the same period last year[116]. - Net borrowings under the Credit Facility were $29.3 million during the first twenty-six weeks of fiscal 2025, compared to $32.1 million in the same period last year[116]. - As of December 26, 2024, the weighted average interest rate for the Credit Facility was 6.7%[125]. - The Company had $95.6 million of available credit under the Credit Facility as of December 26, 2024[125]. Real Estate and Leasing - Approximately 68% of the rentable area in the office building at the Elgin Site is currently vacant, with 29% of the rentable area not built-out[117]. - The Company executed a 7.5-year lease for approximately 445,000 square feet of warehouse space in April 2024, utilized for finished goods inventory and distribution[118].

Financial Performance - Net sales for Q2 fiscal 2025 increased by $9.8 million, or 3.4%, to $301.1 million, driven by a 7.1% increase in sales volume [3] - Sales volume increased by 6.4 million pounds, or 7.1%, totaling 96.3 million pounds, with bars sales volume up approximately 28% year-over-year [4] - Gross profit decreased by $5.7 million to $52.3 million, resulting in a gross profit margin decline to 17.4% from 19.9% in the prior year [8] - Diluted EPS decreased by 29.3% to $1.16 per share [4] - Total operating expenses increased by $2.5 million, with operating expenses as a percentage of net sales rising to 10.9% from 10.4% [9] Inventory and Costs - The value of total inventories increased by $8.5 million, or 4.3%, primarily due to higher commodity acquisition costs [10] - The weighted average cost per pound of raw nut and dried fruit input stock increased by 33.7% year-over-year [10] - Inventories increased to $205.842 million in December 2024, compared to $196.563 million in June 2024, representing a rise of 4.1% [22] Operational Changes - The company plans to consolidate distribution operations into a new location in Huntley, Illinois, and add manufacturing equipment to increase production capabilities [13] - The company remains focused on enhancing profitability through operational efficiencies and optimized pricing strategies [2] Sales Growth - The company reported a 14.9% increase in sales volume for the first six months of fiscal 2025, attributed mainly to the impact of the Lakeville Acquisition [16] Assets and Liabilities - Total assets increased to $545.253 billion in December 2024, up from $515.575 billion in June 2024, representing a growth of 5.3% [22] - Cash decreased significantly to $336 million in December 2024 from $1.975 billion in December 2023, indicating a decline of 83.0% [22] - Accounts receivable increased to $81.2 million in December 2024, compared to $77.416 million in December 2023, reflecting a growth of 4.6% [22] - Current liabilities rose to $150.062 million in December 2024, up from $125.940 million in June 2024, marking an increase of 19.2% [22] - Long-term debt, less current maturities, decreased slightly to $5.969 million in December 2024 from $6.365 million in June 2024, a reduction of 6.2% [22] - Stockholders' equity increased to $325.631 million in December 2024, up from $322.613 million in June 2024, showing a growth of 0.6% [22] - Accrued expenses decreased to $32.937 million in December 2024 from $50.802 million in June 2024, a decline of 35.2% [22] - The company reported a total of $64.426 million in other long-term assets in December 2024, up from $56.396 million in June 2024, indicating a growth of 14.4% [22] - The company maintained its Class A Common Stock at 26 million shares, unchanged from previous periods [22]

Core Viewpoint - John B. Sanfilippo & Son, Inc. is set to discuss its second quarter fiscal year 2025 operating results in a conference call scheduled for January 30, 2025, following the release of results on January 29, 2025 [1]. Company Overview - John B. Sanfilippo & Son, Inc. is based in Elgin, Illinois, and operates as a processor, packager, marketer, and distributor of nut and dried-fruit products, snack bars, and dried cheese [3]. - The company markets its products under several brand names, including Fisher, Orchard Valley Harvest, Squirrel Brand, Southern Style Nuts, and Just the Cheese, as well as various private brands [3].

Core Insights - Daniel Mellado is an economist with a Master's Degree in Statistics, specializing in agricultural commodities and financial investment portfolios [1] - He has experience managing trading and data analysis teams, focusing on investments in bonds, equities, and ETFs [1] - Mellado will provide analysis and valuation for companies in commodities, banking, technology, and pharmaceuticals sectors [1] - The investment recommendations will be based on financial statements, regulations, and macroeconomic variables [1]