Core Viewpoint - J&J Snack Foods (JJSF) is expected to experience bottom-line growth in 2026 due to ongoing stock buybacks and efficiency improvements through its Project Apollo initiative [1] Group 1: Company Initiatives - The company is currently implementing an efficiency program called Project Apollo aimed at improving operational efficiency [1] - JJSF is also shutting down excess operations as part of its strategy to enhance profitability [1] Group 2: Financial Outlook - The anticipated bottom-line growth in 2026 is linked to the financial strategies being executed, including stock buybacks [1]

Financial Performance - Net sales decreased by $18.8 million, or 5.2%, to $343.8 million for the three months ended December 27, 2025, primarily due to declines in the Food Service segment [134]. - Gross profit increased by $2.1 million, or 2.2%, to $96.0 million, with gross profit as a percentage of sales rising from 25.9% to 27.9% [135]. - Operating expenses increased by $7.7 million, or 8.8%, to $95.4 million, with a significant portion attributed to $6.1 million in plant closure expenses [137]. - Net earnings decreased by $4.3 million, or 82.8%, to $0.9 million for the three months ended December 27, 2025 [144]. - Investment income decreased by $0.3 million, or 31.3%, to $0.7 million due to lower interest rates on foreign cash balances [142]. Sales Performance - Net sales for the three months ended December 27, 2025, decreased by $18.8 million, or 5.2%, to $343.8 million compared to $362.6 million for the same period in 2024 [147]. - Food Service sales decreased by $19.7 million, or 8.3%, primarily due to a $18.2 million decline in bakery product sales, attributed to the Project Apollo initiative [148]. - Retail Supermarket sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a 35% increase in handheld sales [151]. - Frozen Beverages segment sales decreased by $0.3 million, or 0.3%, with operating income declining by $0.6 million, or 13.7%, to $4.0 million due to lower beverage sales volumes [153][154]. Operational Initiatives - The company expects Project Apollo to generate at least $20 million of run-rate operating income by the end of fiscal 2026 [127]. - The company has opened three regional distribution centers, projected to drive cost reductions in warehousing and distribution [130]. - Operating income in the Food Service segment increased by $1.3 million, or 14.6%, to $10.1 million, reflecting manufacturing efficiencies despite volume declines [150]. Cash Flow and Financial Position - Cash flows from operating activities for the three months ended December 27, 2025, increased to $35.9 million from $35.2 million in the prior year [156]. - As of December 27, 2025, the company had $66.8 million in cash and cash equivalents, with no outstanding balance under the Amended Credit Agreement [159][164]. - The company anticipates that future operating cash flow, along with its borrowing capacity, will be sufficient to meet cash requirements and fund growth [155]. Shareholder Actions - The company repurchased 458,467 shares of common stock at an average price of $91.61 per share during the quarter [162]. - The company is in compliance with all financial covenants of the Credit Agreement as of December 27, 2025 [163]. Taxation - The effective tax rate remained consistent at 27% for both the three months ended December 27, 2025, and December 28, 2024 [143]. Marketing Expenses - Selling and marketing expenses increased from 7.9% to 9.2% of net sales, driven by higher commission costs and promotional activities [138]. Plant Closure Costs - Plant closure costs recorded were approximately $24 million in Q4 fiscal 2025 and $6.1 million in Q1 fiscal 2026 [128].

A downtrend has been apparent in J&J Snack Foods (JJSF) lately with too much selling pressure. The stock has declined 11% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold ...

Net sales declined 5.2% year over year, which Fachner said was “mostly” tied to the bakery business as the company focused on higher-margin opportunities. He said about $18 million of the revenue decline came from bakery, including roughly $13 million related to SKU optimization efforts under Project Apollo. The remaining bakery declines were described as lower-margin products consistent with portfolio optimization.Management highlighted a 200 basis-point improvement in consolidated gross margin to 27.9% , ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $27 million on sales of $343.8 million for Q1 2026, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% year-over-year, driven by early savings from Project Apollo and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a $18 million revenue decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales decreased by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined by approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - The company experienced a dip in dollar sales in mid-November due to a pause in SNAP benefits, with the largest impact seen in frozen novelties [6] - Dippin' Dots sales increased by approximately 4% in Q1, supported by retail growth and expansion into theaters and amusement centers [9] - The company noted improved theater trends in January, primarily due to the success of the Avatar movie, with a promising movie slate for the remainder of the fiscal year [10] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its transformation initiatives under Project Apollo [5][41] - A new $50 million share repurchase authorization was announced, reflecting confidence in the business and commitment to returning cash to shareholders [7] - The company aims to achieve a $20 million run-rate operating income once all Project Apollo initiatives are fully activated [7][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early benefits of Project Apollo and the potential for low single-digit growth for the full year, despite a 3% headwind from SKU rationalization [25][26] - The company anticipates that commodity pricing will be more favorable this year compared to the previous year, which faced significant headwinds [32] - Management remains confident in the ability to deliver the full benefits of Project Apollo and drive long-term value creation [41] Other Important Information - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [17] - Operating expenses increased by $95.4 million, including $6.1 million in non-recurring plant closure costs [14] Q&A Session Summary Question: Sales and Project Apollo - Analyst inquired about the full-year sales expectations considering the SKU rationalization impact and the company's long-term growth objectives [19] - Management responded that they expect low single-digit growth for the year, despite the SKU rationalization headwind [25][26] Question: Cost Savings from Project Apollo - Analyst asked about the $20 million annual run rate for cost savings from Project Apollo and the timeline for achieving it [28] - Management indicated that they expect to reach the full run rate in Q2, with significant progress already made [29] Question: Commodity Environment and Gross Margin - Analyst requested an update on commodity costs and their impact on gross margin moving forward [31] - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [32]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the first quarter was $27 million on sales of $343.8 million, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% versus the prior year, driven by early savings from Project Apollo and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales declined by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - The company experienced a dip in dollar sales in mid-November coinciding with a pause in SNAP benefits, impacting frozen novelties the most [6] - Dippin' Dots sales were up approximately 4% in the first quarter, fueled by retail growth and theater expansion [9] - The company anticipates incremental distribution gains across regional and national customers in fiscal 2026 [9] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its strategic direction [41] - Project Apollo is expected to deliver $20 million in run-rate operating income once fully implemented, with significant progress already made [7][29] - The company is committed to returning cash to shareholders, having completed a $42 million share repurchase and announced a new $50 million repurchase authorization [7][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the theater performance for the balance of fiscal 2026, despite a disappointing box office performance in the first quarter [10] - The company expects to achieve low single-digit growth for the entire year, factoring in the impact of SKU rationalization [25][26] - Management believes commodity pricing will be more favorable this year compared to the previous year, which faced significant headwinds [32] Other Important Information - Operating expenses increased by $95.4 million, including non-recurring plant closure costs [14] - The effective tax rate was 27%, with reported earnings per diluted share at $0.05 compared to $0.26 last year [17] - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [17] Q&A Session Summary Question: Sales and SKU Rationalization Impact - Analyst inquired about the full-year sales expectations considering the SKU rationalization impact of about 3 percentage points [19] Response - Management indicated that despite the SKU rationalization, they expect low single-digit growth for the year, supported by new business and innovation [25][26] Question: Project Apollo Cost Savings - Analyst asked about the $20 million annual run rate for Project Apollo and what needs to happen to achieve it [28] Response - Management believes they will reach the $20 million run rate starting in Q2, with most of the work related to plant consolidation already completed [29] Question: Commodity Environment and Gross Margin - Analyst requested an update on commodity costs and their impact on gross margin moving forward [31] Response - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [32]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2026 was $27 million on sales of $343.8 million, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% versus the prior year, driven by early Apollo savings and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales declined by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - Sales in the quarter were impacted by the government shutdown and the pause in SNAP benefits, with a noted dip in dollar sales in mid-November [6] - Dippin' Dots sales increased approximately 4% in Q1, fueled by retail growth and theater expansion [9] - The company saw improved theater trends in January, primarily from the success of the Avatar movie [10] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its transformation initiatives under Project Apollo [5][38] - A new $50 million share repurchase authorization was announced, demonstrating confidence in the business and commitment to returning cash to shareholders [7] - The innovation pipeline remains robust, with several new products set to launch in Q2 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving low single-digit growth for the full year despite a 3% impact from SKU rationalization [22] - The company anticipates achieving a $20 million annual run rate in cost savings from Project Apollo by Q2 [25][26] - Commodity pricing is expected to be more favorable this year compared to the previous year, which faced significant headwinds [29] Other Important Information - The effective tax rate was 27%, and on a reported basis, earnings per diluted share was $0.05 compared to $0.26 last year [15] - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [15] Q&A Session Summary Question: Sales and Project Apollo - Inquiry about the full-year sales expectations considering SKU rationalization and underlying growth objectives [17] - Management indicated that they expect low single-digit growth for the year despite the SKU impact [22] Question: Cost Savings from Project Apollo - Follow-up on the $20 million annual run rate for cost savings and the timeline for achieving it [25] - Management confirmed that they expect to reach the full run rate in Q2 [26] Question: Commodity Environment and Gross Margin - Question regarding the current commodity environment and its impact on gross margin [27] - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [29]

The Zacks Food-Miscellaneous industry is operating in a challenging environment marked by cautious consumer spending and persistent cost pressures. While food demand remains relatively defensive, value-oriented purchasing behavior and uneven foodservice traffic have weighed on volume growth and pricing flexibility. At the same time, elevated input and operating costs continue to pressure margins. Despite these headwinds, health-focused innovation and portfolio modernization remain key bright spots, as consu ...

Core Insights - The company reported an earnings recovery with adjusted EBITDA of $27 million on sales of $343.8 million for Q1 2026, marking a 7% increase in adjusted EBITDA year-over-year [5][12] - Despite a 5.2% decline in net sales, the company is focusing on higher-margin opportunities, particularly through its Project Apollo transformation initiatives [6][31] - The gross margin improved by 200 basis points to 27.9%, driven by operational improvements and a better product mix [5][12] Financial Performance - Adjusted EBITDA for Q1 2026 was $27 million, up from $25.3 million in the previous year [15] - Net sales decreased to $343.8 million, primarily due to a $19.7 million decline in the foodservice segment, with $18 million attributed to the lower-margin bakery business [6][12] - The company incurred $1 million in product disposal costs during the quarter, which impacted gross profit [29] Project Apollo and Strategic Initiatives - Project Apollo is expected to yield $20 million in annual run rate operating income once fully implemented, with $3 million in net savings realized in Q1 [7][24] - The company is in the ramp-up phase of Project Apollo, with plant consolidations expected to be completed by the end of Q2 2026 [7][24] - SKU optimization efforts related to Project Apollo are anticipated to result in a 3% decline in sales for fiscal 2026 [6][19] Market and Product Performance - The company experienced a 6.9% increase in pretzel sales in the food service segment, reflecting strong demand for its Bavarian formulas [8][12] - Retail segment net sales increased by 2.6% to $45.9 million, driven by a $1.8 million increase in handheld volume [13] - Dippin' Dots sales grew approximately 4% in Q1, supported by retail growth and expansion into theaters and amusement centers [9][12] Shareholder Returns and Financial Health - The company completed a share repurchase authorization, buying back $42 million worth of stock, and announced a new $50 million repurchase authorization [8][18] - The balance sheet remains strong with approximately $67 million in cash and no long-term debt, alongside $210 million of borrowing capacity under its revolving credit facility [17]

J&J Snack Foods (JJSF) came out with quarterly earnings of $0.33 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +3.13%. A quarter ago, it was expected that this drink and snack maker would post earnings of $1.06 per share when it actually produced earnings of $1.58, delivering a surprise of +49.06%.Over the last four quarter ...