Core Viewpoint - J&J Snack Foods reported quarterly earnings of $2 per share, exceeding the Zacks Consensus Estimate of $1.74 per share, but down from $1.98 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company achieved revenues of $454.29 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.51% and showing an increase from $439.96 million year-over-year [2]. - Over the last four quarters, J&J Snack Foods has exceeded consensus EPS estimates only once, indicating inconsistent performance [2]. Stock Performance - J&J Snack Foods shares have declined approximately 25.7% since the beginning of the year, contrasting with the S&P 500's gain of 7.6%, highlighting underperformance relative to the broader market [3]. - The stock currently holds a Zacks Rank 4 (Sell), suggesting expectations of continued underperformance in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.61 on revenues of $439.15 million, while for the current fiscal year, the estimate is $4.04 on revenues of $1.61 billion [7]. - The trend of estimate revisions for J&J Snack Foods was unfavorable prior to the earnings release, which may impact future stock movements [6]. Industry Context - The Food - Miscellaneous industry, to which J&J Snack Foods belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting a challenging environment for the company [8]. - Another company in the same industry, Hain Celestial, is expected to report a significant decline in earnings, with a consensus EPS estimate of $0.04, reflecting a year-over-year change of -69.2% [9].

[Executive Summary & Business Overview](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Overview) This section summarizes J&J Snack Foods Corp.'s Q3 2025 financial performance and strategic business outlook [Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) J & J Snack Foods Corp. reported strong financial results for the third quarter ended June 28, 2025, achieving record performance across key metrics including net sales of $454.3 million and adjusted EBITDA of $72.0 million, reflecting resilience despite a cautious consumer environment and weather-related headwinds Third Quarter 2025 Financial Highlights | Metric | Actuals (Q3 2025) | $ vs. LY | % vs. LY | | :--- | :--- | :--- | :--- | | Net Sales | $454.3M | $14.3M | 3% | | Gross Profit | $150.0M | $2.3M | 2% | | Operating Income | $60.6M | $10.5M | 21% | | Net Earnings | $44.2M | $7.9M | 22% | | Earnings per Diluted Share | $2.26 | $0.39 | 21% | | Adjusted Operating Income | $53.4M | $0.4M | 1% | | Adjusted EBITDA | $72.0M | $1.2M | 2% | | Adjusted Earnings per Diluted Share | $2.00 | $0.02 | 1% | [CEO Commentary & Business Outlook](index=1&type=section&id=CEO%20Commentary%20%26%20Business%20Outlook) CEO Dan Fachner reported record Q3 performance driven by Food Service and Frozen Beverage, despite retail declines, with sequential margin expansion and a cautious Q4 outlook focusing on fiscal 2026 innovation - Q3 performance was led by sales growth in Food Service and Frozen Beverage segments, with meaningful growth in core soft pretzel, bakery, and Dippin' Dots businesses[4](index=4&type=chunk) - Retail sales declined due to reduced promotional activity for frozen novelties and capacity constraints in handheld sales from a prior year facility fire, with a solution for restoration expected by calendar year-end[4](index=4&type=chunk) - Sequential margin expansion was supported by a seasonal mix shift towards higher-margin products and recent pricing initiatives to offset input cost inflation[4](index=4&type=chunk) - Outlook for fiscal Q4 remains cautious due to consumer backdrop, tariff-related risks, and projected lower box office sales. For fiscal 2026, the focus is on execution and innovation, including new product launches (pretzels, churros, frozen beverages) and 'better-for-you' options (high protein pretzels, clean-label novelties)[5](index=5&type=chunk) [Detailed Third Quarter 2025 Performance](index=2&type=section&id=Detailed%20Third%20Quarter%202025%20Performance) This section details the company's consolidated and segment-specific financial performance for the third quarter of 2025 [Consolidated Financial Highlights](index=2&type=section&id=Consolidated%20Financial%20Highlights) Consolidated net sales increased 3.3% to $454.3 million, with gross margin slightly declining and operating income significantly increasing due to non-recurring items - Net sales increased **3.3% to $454.3 million**, primarily driven by higher Food Service and Frozen Beverage sales[6](index=6&type=chunk) - Gross profit increased to **$150.0 million** (from $147.8 million YoY), but gross margin declined from **33.6% to 33.0%**, mainly due to a higher proportion of lower-margin machine sales in the Frozen Beverage segment and increased ingredient costs (especially chocolates), partially offset by price increases[6](index=6&type=chunk) - Total operating expenses were **$89.4 million** (**19.7% of sales**), down from 22.2% in the prior year, including a **$10.6 million** insurance gain and a **$1.5 million** intangible asset impairment charge. Excluding these, operating expenses increased less than 1%[7](index=7&type=chunk) Key Consolidated Financial Metrics (Q3 2025 vs Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Income | $60.6M | $50.1M | $10.5M | 21% | | Adjusted Operating Income | $53.4M | $53.1M | $0.3M | 1% | | Earnings per Diluted Share | $2.26 | $1.87 | $0.39 | 21% | | Adjusted Earnings per Diluted Share | $2.00 | $1.98 | $0.02 | 1% | | Effective Tax Rate | 27.2% | 27.9% | -0.7% | - | [Segment Performance](index=2&type=section&id=Segment%20Performance) Food Service saw robust sales and operating income growth, while Retail Supermarket declined, and Frozen Beverages grew from machine sales Segment Sales Growth (Q3 2025 vs Q3 2024) | Segment | Sales Change (%) | | :--- | :--- | | Food Service | +4.8% | | Retail Supermarket | -7.1% | | Frozen Beverage | +6.1% | [Food Service Segment](index=2&type=section&id=Food%20Service%20Segment) Food Service sales increased 4.8% to $277.2 million, driven by pretzels, with operating income surging 55.7% to $31.5 million, significantly benefiting from an insurance gain - Food Service sales increased **4.8% to $277.2 million**[11](index=11&type=chunk) - Pretzel sales increased **12.8%**, largely due to Bavarian varieties, while Churro sales declined **13.2%** due to the wind-down of a prior-year limited-time offer[11](index=11&type=chunk) - New products and added placement contributed approximately **$8.4 million** in sales, driven by frozen novelties, churro products, and new cookie distribution[11](index=11&type=chunk) - Operating income increased by **$11.3 million** (**55.7%**) to **$31.5 million**, including a net **$9.1 million** benefit from non-recurring insurance gain on property, plant, and equipment[12](index=12&type=chunk) [Retail Supermarket Segment](index=3&type=section&id=Retail%20Supermarket%20Segment) Retail Supermarket sales decreased 7.1% to $63.9 million due to lower promotions and capacity constraints, leading to a 26.3% decline in operating income - Retail sales decreased **7.1% to $63.9 million**[17](index=17&type=chunk) - Frozen novelties sales decreased **8.5%** due to lower promotional activity, though Dogsters and Dippin' Dots Sundaes showed growth. Retail handheld sales declined **21%** due to capacity constraints from a prior year facility fire[17](index=17&type=chunk) - Soft pretzel sales increased **3.3%**. New products and added placement contributed approximately **$3.3 million**, driven by Dippin' Dots Sundaes and pretzel dogs[17](index=17&type=chunk) - Operating income decreased **26.3% to $5.8 million**[17](index=17&type=chunk) [Frozen Beverages Segment](index=3&type=section&id=Frozen%20Beverages%20Segment) Frozen Beverage sales increased 6.1% to $113.3 million, driven by a 73.4% surge in machine sales, resulting in a 5.8% increase in operating income - Frozen beverage segment sales increased **6.1% to $113.3 million**[17](index=17&type=chunk) - Beverage sales declined **1.5%**, impacted by unfavorable foreign exchange rates. Machine Service revenues increased **2.7%** on higher call volumes[17](index=17&type=chunk) - Machine sales increased **73.4%**, primarily due to a major convenience customer upgrading its equipment across its store network[17](index=17&type=chunk) - Operating income increased **5.8% to $23.3 million**, driven by increased equipment sales and focused expense management[17](index=17&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of J&J Snack Foods Corp. and details regarding its upcoming conference call [About J & J Snack Foods Corp.](index=3&type=section&id=About%20J%20%26%20J%20Snack%20Foods%20Corp.) J & J Snack Foods Corp. is a leading innovator in the snack food industry, offering a diverse portfolio of branded snack foods and beverages to foodservice and retail supermarket outlets nationwide. Their principal products include well-known brands like SUPERPRETZEL, ICEE, SLUSH PUPPIE, DIPPIN' DOTS, and various bakery items - J & J Snack Foods Corp. is a leader and innovator in the snack food industry, providing innovative, niche, and affordable branded snack foods and beverages[15](index=15&type=chunk) - The company's principal products include SUPERPRETZEL, ICEE, SLUSH PUPPIE, DIPPIN' DOTS, LUIGI'S Real Italian Ice, MINUTE MAID frozen ices, WHOLE FRUIT sorbet, HOLA! CHURROS, THE FUNNEL CAKE FACTORY, and several bakery brands[15](index=15&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) J&J Snack Foods Corp. will host a conference call on August 5, 2025, at 10:00 a.m. Eastern Time to discuss its third-quarter results and business outlook. Participants are required to register to receive dial-in information, and a live audio webcast will also be available - A conference call to discuss results and business outlook will be held on August 5, 2025, at 10:00 a.m. Eastern Time[14](index=14&type=chunk) - Participants must register via a provided link to receive dial-in numbers and a personal PIN. A live audio webcast will also be available on the Investors homepage[14](index=14&type=chunk) [Financial Disclosures & Non-GAAP Measures](index=4&type=section&id=Financial%20Disclosures%20%26%20Non-GAAP%20Measures) This section outlines cautionary statements regarding forward-looking information and defines the company's non-GAAP financial measures [Cautionary Statement Regarding Forward-Looking Information](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Information) This section provides a cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially from expectations due to inherent uncertainties and various risk factors, including consumer spending, price competition, raw material availability, and market changes. The company does not undertake to update such statements - The press release contains forward-looking statements regarding future financial position, results, strategy, and objectives[18](index=18&type=chunk) - Such statements are inherently uncertain, and actual results may differ materially from expectations due to factors like consumer spending, price competition, raw material availability, transportation costs, and market changes[18](index=18&type=chunk) - The Company does not undertake a duty to update forward-looking statements[18](index=18&type=chunk) [Non-GAAP Financial Measures Definitions](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines the non-GAAP financial measures used by the company: Adjusted EBITDA, Adjusted Operating Income, and Adjusted Earnings per Diluted Share. It clarifies that these measures are supplementary to GAAP results, used by management to evaluate core business performance by excluding certain non-recurring or non-indicative items, and should not be considered in isolation - Adjusted EBITDA consists of net earnings adjusted for income taxes, investment income, interest expense, depreciation and amortization, share-based compensation, net gain/loss on asset disposal, impairment charges, restructuring costs, M&A costs, strategic business transformation costs, integration costs, non-recurring legal fees, and gain on insurance proceeds[19](index=19&type=chunk) - Adjusted Operating Income consists of operating income adjusted for impairment charges, restructuring costs, M&A costs, acquisition-related amortization and inventory adjustments, strategic business transformation costs, integration costs, non-recurring legal fees, and gain on insurance proceeds[20](index=20&type=chunk) - Adjusted Earnings per Diluted Share consists of net earnings adjusted for similar items as Adjusted Operating Income, with the income tax effect of pre-tax adjustments determined using statutory tax rates[21](index=21&type=chunk) - These non-GAAP measures are not indicators of financial performance under GAAP and should not be considered alternatives to GAAP measures. They are used by management to evaluate business performance by excluding items not indicative of recurring core business results, providing additional clarity for investors[23](index=23&type=chunk)[24](index=24&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated statements of earnings, balance sheets, and cash flows for the reported periods [Consolidated Statements of Earnings](index=6&type=section&id=Consolidated%20Statements%20of%20Earnings) The Consolidated Statements of Earnings present the company's financial performance for the three and nine months ended June 28, 2025, and June 29, 2024, detailing net sales, cost of goods sold, gross profit, operating expenses, and net earnings Consolidated Statements of Earnings (Selected Data, in thousands) | Metric | Three months ended June 28, 2025 | Three months ended June 29, 2024 | Nine months ended June 28, 2025 | Nine months ended June 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $454,293 | $439,957 | $1,172,990 | $1,147,999 | | Cost of goods sold | $304,248 | $292,191 | $833,341 | $797,405 | | Gross profit | $150,045 | $147,766 | $339,649 | $350,594 | | Total operating expenses | $89,448 | $97,650 | $266,790 | $272,891 | | Operating income | $60,597 | $50,116 | $72,859 | $77,703 | | Net earnings | $44,247 | $36,299 | $54,214 | $56,910 | | Earnings per diluted share | $2.26 | $1.87 | $2.77 | $2.93 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity as of June 28, 2025, compared to September 28, 2024 Consolidated Balance Sheets (Selected Data, in thousands) | Metric | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Total current assets | $488,449 | $450,414 | | Property, plant and equipment, net | $404,983 | $391,185 | | Total other assets | $520,497 | $523,502 | | Total Assets | $1,413,929 | $1,365,101 | | Total current liabilities | $204,822 | $174,073 | | Total stockholders' equity | $969,925 | $956,970 | | Total Liabilities and Stockholders' Equity | $1,413,929 | $1,365,101 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows illustrate the sources and uses of cash for the nine months ended June 28, 2025, and June 29, 2024, categorized into operating, investing, and financing activities Consolidated Statements of Cash Flows (Selected Data, in thousands) | Metric | Nine months ended June 28, 2025 | Nine months ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $98,697 | $126,746 | | Net cash (used in) investing activities | $(48,430) | $(62,901) | | Net cash (used in) financing activities | $(47,653) | $(48,156) | | Net increase in cash and cash equivalents | $3,983 | $14,466 | | Cash and cash equivalents at end of period | $77,377 | $64,047 | [Notes to Consolidated Financial Statements & Non-GAAP Reconciliations](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%26%20Non-GAAP%20Reconciliations) This section provides detailed segment reporting and reconciliations of GAAP to non-GAAP financial measures [Segment Reporting Details](index=9&type=section&id=Segment%20Reporting%20Details) This section provides a detailed breakdown of sales, operating income, capital expenditures, and assets by the company's three operating segments: Food Service, Retail Supermarket, and Frozen Beverages, for both the three and nine months ended June 28, 2025, and June 29, 2024 Sales to External Customers by Segment (Three months ended, in thousands) | Segment | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Food Service | $277,170 | $264,446 | | Retail Supermarket | $63,860 | $68,723 | | Frozen Beverages | $113,263 | $106,788 | | Consolidated sales | $454,293 | $439,957 | Operating Income by Segment (Three months ended, in thousands) | Segment | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Food Service | $31,515 | $20,247 | | Retail Supermarket | $5,755 | $7,812 | | Frozen Beverages | $23,327 | $22,057 | | Total operating income | $60,597 | $50,116 | Capital Expenditures by Segment (Three months ended, in thousands) | Segment | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Food Service | $16,764 | $12,717 | | Retail Supermarket | $44 | $0 | | Frozen Beverages | $5,926 | $7,028 | | Total capital expenditures | $22,734 | $19,745 | [Non-GAAP Financial Measures Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) This section provides detailed reconciliations of GAAP financial measures (Net Earnings, Operating Income, and Earnings per Diluted Share) to their corresponding non-GAAP adjusted measures (Adjusted EBITDA, Adjusted Operating Income, and Adjusted Earnings per Diluted Share) for the three and nine months ended June 28, 2025, and June 29, 2024 Reconciliation of GAAP Net Earnings to Adjusted EBITDA (Three months ended, in thousands) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net Earnings | $44,247 | $36,299 | | Income Taxes | $16,531 | $14,057 | | Depreciation and Amortization | $18,657 | $18,193 | | Gain on insurance proceeds received for damage to property, plant, and equipment | $(10,622) | $0 | | Impairment Costs | $1,500 | $0 | | Adjusted EBITDA | $72,032 | $70,870 | Reconciliation of GAAP Operating Income to Adjusted Operating Income (Three months ended, in thousands) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Operating Income | $60,597 | $50,116 | | Strategic Business Transformation Costs | $0 | $295 | | Gain on insurance proceeds received for damage to property, plant, and equipment | $(10,622) | $0 | | Acquisition Related Amortization Expenses | $1,946 | $2,012 | | Impairment Costs | $1,500 | $0 | | Adjusted Operating Income | $53,421 | $53,061 | Reconciliation of GAAP Earnings per Diluted Share to Adjusted Earnings per Diluted Share (Three months ended) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Earnings per Diluted Share | $2.26 | $1.87 | | Strategic Business Transformation Costs | $0 | $0.02 | | Gain on insurance proceeds received for damage to property, plant, and equipment | $(0.54) | $0 | | Acquisition Related Amortization Expenses | $0.10 | $0.10 | | Impairment Costs | $0.08 | $0 | | Tax Effect of Non-GAAP Adjustments | $0.10 | $(0.04) | | Adjusted Earnings per Diluted Share | $2.00 | $1.98 |

Core Insights - J & J Snack Foods Corp. reported strong third-quarter results for the period ending June 28, 2025, with record performance in key financial metrics, including net sales of $454.3 million and adjusted EBITDA of $72.0 million, reflecting the resilience of the business and the strength of its diversified portfolio [3][6]. Financial Performance - Net sales increased by 3.3% year-over-year to $454.3 million, driven primarily by higher sales in the Food Service and Frozen Beverage segments [6]. - Gross profit rose to $150.0 million, up from $147.8 million in the prior year, although gross margin slightly declined from 33.6% to 33.0% due to lower margins in the Frozen Beverage segment [6][9]. - Operating income increased by 21% to $60.6 million, compared to $50.1 million in the prior year quarter, while adjusted operating income was $53.4 million, a slight increase from $53.1 million [9][36]. - Net earnings reached $44.2 million, a 22% increase from $36.3 million in the prior year, with earnings per diluted share at $2.26, up from $1.87 [9][27]. Segment Performance - Food Service segment sales increased by 4.8% to $277.2 million, with pretzel sales growing by 12.8% [7][15]. - Retail Supermarket segment sales decreased by 7.1% to $63.9 million, impacted by reduced promotional activity and capacity constraints due to a facility fire [4][15]. - Frozen Beverage segment sales rose by 6.1% to $113.3 million, with machine sales increasing significantly by 73.4% [7][15]. Cost Management - Total operating expenses were $89.4 million, representing 19.7% of sales, down from 22.2% in the prior year quarter, aided by a $10.6 million gain on insurance proceeds [8][9]. - Marketing and selling expenses increased slightly to $33.8 million, while distribution expenses decreased to $44.7 million due to cost optimization initiatives [14]. Future Outlook - The company remains cautious about the consumer environment and potential tariff-related risks, while focusing on execution and innovation with several key product launches planned for fiscal 2026 [5][6]. - The company is also making progress on healthier product innovations, including high-protein pretzels and clean-label novelties [5].

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Wall Street expects a year-over-year decline in earnings on higher revenues when J&J Snack Foods (JJSF) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 5. ...

Company Announcement - J & J Snack Foods Corp. has scheduled a conference call and webcast to discuss its fiscal 2025 third quarter financial results on August 5, 2025, at 10:00 am Eastern time [1] - The company expects to release its fiscal third quarter results for the period ended June 28, 2025, in the morning on the same day [2] Conference Call Details - Participants must pre-register to receive the dial-in number and personal PIN required for accessing the conference call [2] - A live webcast of the call will be available on the company's investor relations website, with a recommendation to allow 15 minutes for registration and software installation [3] Company Overview - J & J Snack Foods Corp. is a leader and innovator in the snack food and frozen beverage industry, with over fifty years of experience [4] - The company specializes in various snack and beverage brands, including SUPERPRETZEL, ICEE, SLUSH PUPPIE, and Dippin' Dots, among others [4] - The brand portfolio also features LUIGI'S Real Italian Ice, MINUTE MAID frozen ices, WHOLE FRUIT frozen fruit bars, and several bakery brands [4]

Financial Performance - Net sales decreased by $3.6 million, or 1.0%, to $356.1 million for the three months ended March 29, 2025, while increasing by $10.7 million, or 1.5%, to $718.7 million for the six months ended March 29, 2025[118][122]. - Gross profit decreased by $12.5 million, or 11.6%, to $95.7 million for the three months ended March 29, 2025, and by $13.2 million, or 6.5%, to $189.6 million for the six months ended March 29, 2025[118][123][124]. - Operating income decreased by $11.9 million, or 66.4%, to $6.0 million for the three months ended March 29, 2025, and by $15.3 million, or 55.6%, to $12.3 million for the six months ended March 29, 2025[118][130][131]. - Net earnings decreased by $8.5 million, or 63.8%, for the three months ended March 29, 2025, and by $10.6 million, or 51.6%, for the six months ended March 29, 2025[130][131]. - Operating expenses decreased by $0.7 million, or 0.7%, to $89.7 million for the three months ended March 29, 2025, while increasing by $2.1 million, or 1.2%, to $177.3 million for the six months ended March 29, 2025[125][126]. - Investment income increased by $0.2 million to $1.7 million for the six months ended March 29, 2025[127]. - Operating income for the Food Service segment decreased by 84.3% to $1.2 million for the three months ended March 29, 2025, down from $7.9 million in the prior year[134]. - Operating income for the Retail Supermarket segment decreased by 45.8% to $2.8 million for the three months ended March 29, 2025[141]. - Operating income for the Food Service segment decreased by 79.1% to $2.9 million for the six months ended March 29, 2025[140]. - Operating income in the Frozen Beverage segment decreased by $2.9 million to $2.0 million in the quarter, primarily due to weak beverage sales and foreign exchange headwinds[148]. - Operating income for the six months ended March 29, 2025, decreased by $1.9 million to $6.2 million, impacted by headwinds in the fiscal second quarter[150]. Sales Performance - Total sales for the three months ended March 29, 2025, were $359.7 million, a decrease of 1.0% compared to $356.1 million in the same period of 2024[134]. - Sales of soft pretzels in the Food Service segment decreased by 7.9% to $50.0 million for the three months ended March 29, 2025[135]. - Retail Supermarket sales increased by 1.8% to $53.8 million for the three months ended March 29, 2025, compared to $52.9 million in the same period of 2024[141]. - Sales of new products in the Food Service segment were approximately $2.8 million for the three months ended March 29, 2025, primarily driven by churros[136]. - Total sales for the six months ended March 29, 2025, were $718.7 million, an increase of 1.5% compared to $708.0 million in the same period of 2024[134]. - Frozen novelties sales in the Retail Supermarket segment increased by 14.7% to $27.1 million for the three months ended March 29, 2025[143]. - Sales of new products in retail supermarkets were approximately $1.5 million for the three months ended March 29, 2025, driven primarily by the launch of Dippin' Dots sundaes[143]. - Frozen Beverages sales to external customers decreased by $0.7 million, or 0.9%, in the three months ended March 29, 2025, with beverage-related sales down 7.1% to $41.5 million[147]. - For the six months ended March 29, 2025, Frozen beverage and related product sales increased by $2.4 million, or 1.6%, while beverage-related sales decreased by 0.5% to $86.2 million[149]. Tax and Compliance - The effective tax rate was 27.2% for both the three and six months ended March 29, 2025, compared to 26.6% in the prior year period[129]. - The company is in compliance with all financial covenants of the Credit Agreement as of March 29, 2025[159]. Investments and Cash Flow - Net cash provided by operating activities was $47.5 million for the six months ended March 29, 2025, compared to $61.7 million in the prior year[152]. - Cash flows from investing activities showed a net cash outflow of $37.9 million, primarily due to purchases of property, plant, and equipment totaling $38.5 million[153]. - The company repurchased 39,061 shares of common stock at an average price of $128.00 per share during the six months ended March 29, 2025[154]. - As of March 29, 2025, the company had $48.5 million in cash and cash equivalents and no long-term debt outstanding[156]. - The amount available under the Amended Credit Agreement was $212.7 million as of March 29, 2025, after accounting for $12.3 million in letters of credit outstanding[160]. Operational Developments - The company opened three regional distribution centers, projected to drive significant cost reductions in warehousing and distribution[119]. - Six new production lines were added, significantly expanding capacity for core products such as pretzels and churros[119]. - The company launched the Hola! Churros brand in fiscal year 2023 and expanded the SuperPretzel brand with Bavarian Sticks[119].

Financial Data and Key Metrics Changes - Total net sales for the fiscal second quarter declined 1% to $356.1 million compared to the prior year quarter, primarily due to lower sales in the frozen beverage and foodservice segments, partially offset by growth in the retail business [5][22] - Adjusted EBITDA for the quarter was $26.2 million, and adjusted EPS was $0.35 per share, down from $39.3 million and $0.84 respectively in the prior year [26] - Gross margin decreased by 320 basis points to 26.9% from 30.1% in the prior year [6][22] Business Line Data and Key Metrics Changes - Frozen beverage sales declined by less than 1%, primarily due to weakness in the theater channel and unfavorable foreign exchange impacts [9][10] - Foodservice sales decreased by 1.7%, significantly impacted by the loss of limited-time offer churro volumes from the previous year [11][12] - Retail sales grew by 1.8%, with frozen novelties showing a 4.1% increase, driven by the success of the Dippin' Dots brand [14][15] Market Data and Key Metrics Changes - North American box office sales in fiscal Q2 declined an estimated 10% compared to the prior year, affecting beverage volumes in the frozen beverage segment [9] - The convenience channel has been down for about 18 months, with a reported decline of approximately 7% in the quarter [75] Company Strategy and Development Direction - The company is focused on capturing additional price increases and growing volume, with expectations for earnings improvement in the second half of fiscal 2025 [8][22] - Innovations and marketing efforts are being directed towards the pretzel business, particularly Bavarian pretzels, which are experiencing growth [12][68] - The company is adapting its portfolio to meet consumer trends, including developing high-protein pretzels and better-for-you frozen novelties [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a rebound in theater attendance and the impact of pricing actions, expecting a stronger second half of the year [22][52] - The company acknowledges challenges from macroeconomic factors affecting consumer sentiment but believes its products are relatively insulated during economic uncertainty [18][49] Other Important Information - The company has a healthy balance sheet with $48.5 million in cash and no long-term debt, along with approximately $213 million of borrowing capacity under its revolving credit agreement [26] - The company is actively seeking options to mitigate potential impacts from tariff changes that could increase input costs by $4 million to $6 million annually [23] Q&A Session Summary Question: Clarification on gross margin decline - Management indicated that the remaining balance of the gross margin decline was primarily due to chocolate cost inflation, which accounted for about 60 basis points [28] Question: Expectations for gross margins - Management confirmed that they still expect gross margins to return to the low 30s in the second half of the year [30] Question: Impact of theater attendance on business segments - Management stated that theater attendance remains a significant driver, with approximately 25% of frozen beverage business linked to this channel [36] Question: Price realization and inflation impact - Management expressed confidence in achieving price realization, expecting an additional 80 basis points to a full percentage point improvement in the third quarter [55] Question: Trends in the convenience channel - Management noted that the convenience channel has been down for an extended period, but they are seeing some growth in equipment sales within this channel [74] Question: Regulatory changes and product reformulation - Management confirmed that they have removed red dye number three from all products and are actively monitoring regulatory changes [78]

Core Insights - J&J Snack Foods reported revenue of $356.1 million for the quarter ended March 2025, a decrease of 1% year-over-year, and EPS of $0.35, down from $0.84 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $366.7 million, resulting in a surprise of -2.89%, while the EPS also missed the consensus estimate of $0.69, leading to an EPS surprise of -49.28% [1] Financial Performance Metrics - Total Food Service net sales were reported at $226.05 million, below the two-analyst average estimate of $235.52 million, reflecting a year-over-year decline of -1.7% [4] - Total Frozen Beverages net sales reached $76.20 million, compared to the average estimate of $81.10 million, marking a year-over-year change of -0.9% [4] - Total Retail Supermarket net sales were $53.85 million, exceeding the average estimate of $51.43 million, indicating a year-over-year increase of +1.8% [4] Stock Performance - J&J Snack Foods shares have returned -0.9% over the past month, contrasting with the Zacks S&P 500 composite's increase of +11.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total net sales for Q2 2025 declined 1% to $356.1 million compared to the prior year quarter, primarily due to lower sales in frozen beverage and foodservice segments, partially offset by growth in retail business [5][22] - Gross margin decreased by 320 basis points to 26.9% [6][22] - Adjusted EBITDA for the quarter was $26.2 million, down from $39.3 million in the prior year [26] - Net earnings totaled $4.8 million compared to $13.3 million in the prior year quarter, with earnings per diluted share falling to $0.25 from $0.69 [26] Business Line Data and Key Metrics Changes - Frozen beverage sales declined by less than 1%, impacted by theater channel weakness and unfavorable foreign exchange [9][22] - Foodservice sales decreased by 1.7%, primarily due to the loss of limited-time offer churro volumes, with churro sales down 18.7% [11][12] - Retail sales grew by 1.8%, with frozen novelties up 4.1%, driven by the success of the Dippin' Dots brand [14][22] Market Data and Key Metrics Changes - North America box office sales in Q2 declined an estimated 10% compared to the prior year, affecting beverage volumes [9] - The convenience channel has been down for about 18 months, with a reported decline of approximately 7% in the quarter [72][73] Company Strategy and Development Direction - The company is focused on capturing additional price increases and growing volume, with expectations for earnings improvement in the second half of fiscal 2025 [7][21] - Innovations and marketing efforts are being emphasized, particularly in the pretzel business, to leverage market share growth [12][68] - The company is adapting its portfolio to meet consumer trends, including developing high-protein pretzels and better-for-you frozen novelties [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a rebound in theater attendance and the impact of pricing actions in the second half of the year [21][52] - The company acknowledges challenges from consumer sentiment and input cost inflation but believes its product portfolio is relatively insulated during economic uncertainty [17][50] Other Important Information - The company has a healthy balance sheet with $48.5 million in cash and no long-term debt, along with approximately $213 million of borrowing capacity under its revolving credit agreement [26] - The company repurchased approximately 39,000 shares for $5 million at an average price of about $128 per share [26] Q&A Session Summary Question: Clarification on gross margin decline - Management indicated that the remaining balance of the gross margin decline was primarily due to chocolate cost inflation, accounting for about 60 basis points [28] Question: Expectations for gross margins - Management confirmed that expectations for gross margins to return to the low 30s remain unchanged as they enter the second half of the year [30] Question: Impact of theater attendance on business segments - Management stated that theater attendance remains about 25% of the frozen beverage business and has a significant impact on Dippin' Dots and foodservice [38] Question: Trends in convenience channel - The convenience channel continues to be down, with efforts ongoing to grow equipment sales within that segment [72] Question: Regulatory changes and reformulations - Management is actively monitoring regulatory changes regarding artificial ingredients and has already removed certain dyes from their products [76]