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Company Overview - J&J Snack Foods (JJSF) is expected to report a year-over-year decline in earnings despite higher revenues for the quarter ended June 2025, with earnings projected at $1.74 per share, reflecting a -12.1% change, while revenues are anticipated to be $447.55 million, up 1.7% from the previous year [3][12]. Earnings Expectations - The consensus EPS estimate has been revised 0.63% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4]. - The Most Accurate Estimate for J&J Snack Foods is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.87%, although the stock carries a Zacks Rank of 5, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, J&J Snack Foods was expected to post earnings of $0.69 per share but only achieved $0.35, resulting in a surprise of -49.28% [13]. - The company has not surpassed consensus EPS estimates in any of the last four quarters, indicating a trend of underperformance [14]. Market Reaction - The stock price may increase if the upcoming earnings report exceeds expectations, while a miss could lead to a decline [2]. - Management's discussion of business conditions during the earnings call will significantly influence the sustainability of any immediate price changes and future earnings expectations [2]. Industry Context - Comparatively, BellRing Brands (BRBR), another player in the Zacks Food - Miscellaneous industry, is expected to post earnings of $0.49 per share, reflecting a -9.3% year-over-year change, with revenues projected at $531.85 million, up 3.2% [18][19]. - BellRing Brands has an Earnings ESP of +2.06% and a Zacks Rank of 3, suggesting a higher likelihood of beating the consensus EPS estimate [20].

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]

Company Performance - J&J Snack Foods reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.69 per share, and down from $0.84 per share a year ago, representing an earnings surprise of -49.28% [1] - The company posted revenues of $356.1 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.89%, and down from $359.73 million year-over-year [2] - Over the last four quarters, J&J Snack Foods has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - J&J Snack Foods shares have lost about 15% since the beginning of the year, while the S&P 500 has declined by -3.9% [3] - The current status of estimate revisions is unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.96 on revenues of $455.81 million, and for the current fiscal year, it is $4.68 on revenues of $1.63 billion [7] - The outlook for the industry can significantly impact the stock's performance, with the Food - Miscellaneous industry currently in the top 31% of Zacks industries [8]

Financial Performance - Net sales for the second quarter decreased by 1.0% to $356.1 million compared to the prior year quarter, primarily due to lower sales in the Frozen Beverage and Food Service segments [3]. - Gross profit fell from $108.2 million in the prior year quarter to $95.7 million, with gross margin declining from 30.1% to 26.9% [7]. - Operating income was $6.0 million, a decrease of 66% from $17.9 million in the prior year period [9]. - Net earnings dropped 64% to $4.8 million compared to $13.3 million in the prior year period [9]. - Adjusted EBITDA decreased by 33% to $26.2 million, down from $39.3 million in the prior year quarter [2]. - Net Earnings for Q2 2025 reached $4,824 million, compared to $13,329 million in Q2 2024, reflecting a decrease of approximately 64.2% [33]. - Adjusted EBITDA for the six months ended March 29, 2025, was $51,452 million, down from $69,523 million in the same period last year, a decline of about 26% [33]. - Adjusted Operating Income for Q2 2025 was $8,869 million, compared to $21,827 million in Q2 2024, representing a decrease of approximately 59.5% [33]. - Earnings per Diluted Share for Q2 2025 was $0.25, down from $0.69 in Q2 2024, a decline of about 63.8% [33]. - Adjusted Earnings per Diluted Share for the six months ended March 29, 2025, was $0.68, compared to $1.35 in the same period last year, a decrease of approximately 50.4% [33]. Segment Performance - Food Service segment sales decreased by 1.7% to $226.1 million, with churro sales declining by 18.7% due to the loss of limited-time-offer volumes [11]. - Retail Supermarket segment sales increased by 1.8% to $53.8 million, while Frozen Beverage segment sales decreased by 0.9% to $76.2 million [11]. - Sales of new products and added placements with new customers were approximately $6.5 million in the quarter, driven by churro-related products and new cookie distributions [15]. Cash Flow and Assets - Cash and cash equivalents at the end of the period were $48,514 thousand, a decrease of 33.8% from $73,394 thousand at the beginning of the period [29]. - The company reported a net cash provided by operating activities of $47,472 thousand, down 23% from $61,698 thousand in the same period last year [29]. - Total assets decreased slightly to $1,357,597 thousand from $1,365,101 thousand, a decline of approximately 0.3% [27]. Liabilities and Equity - The company’s total current liabilities increased to $182,192 thousand from $174,073 thousand, an increase of approximately 4.8% [27]. - The company’s retained earnings decreased to $815,323 thousand from $835,753 thousand, a decline of approximately 2.4% [27]. - The company reported a decrease in accounts receivable by $15,794 thousand, compared to a decrease of $20,110 thousand in the same period last year [29]. Capital Expenditures and Costs - Capital expenditures for the six months ended March 29, 2025, totaled $38,530 thousand, an increase of 5.1% compared to $36,626 thousand for the same period in 2024 [31]. - Strategic Business Transformation Costs incurred in Q2 2025 amounted to $2,307 million, while no such costs were reported in Q2 2024 [33]. - Restructuring Costs for the six months ended March 29, 2025, totaled $260 million, with no costs reported in the same period last year [33]. - Non-recurring Legal Expenses for Q2 2025 were $591 million, with no such expenses reported in Q2 2024 [33]. Depreciation and Interest - Depreciation and Amortization for the six months ended March 29, 2025, was $35,510 million, compared to $34,192 million in the same period last year, an increase of approximately 3.9% [33]. - Interest Expense for Q2 2025 was $85 million, down from $429 million in Q2 2024, a decrease of about 80.2% [33]. Market Outlook - North American box office sales are projected to rebound by 30% or more during the fiscal third quarter, following a 10% decline in the second quarter [5]. - The company repurchased approximately 39,000 shares for about $5.0 million, reflecting confidence in long-term business value [6].

Core Insights - J & J Snack Foods Corp. reported a 1% decline in net sales for the second quarter of fiscal 2025, totaling $356.1 million, primarily due to lower sales in the Frozen Beverage and Food Service segments, partially offset by growth in the Retail business [3][6][7]. Financial Performance - Net sales decreased by $3.6 million compared to the prior year, with gross profit falling by 12% to $95.7 million and operating income down 66% to $6.0 million [2][9]. - Net earnings were $4.8 million, a 64% decrease from the previous year, resulting in earnings per diluted share of $0.25, down from $0.69 [2][9]. - Adjusted operating income was $8.9 million, a 59% decline, while adjusted EBITDA decreased by 33% to $26.2 million [2][9]. Segment Performance - The Food Service segment saw a 1.7% decline in sales to $226.1 million, with churro sales down 18.7% due to the loss of limited-time offer volumes from the previous year [7][10]. - Retail Supermarket segment sales increased by 1.8% to $53.8 million, driven by a 14.7% increase in frozen novelties sales [7][11]. - Frozen Beverage segment sales decreased by 0.9% to $76.2 million, attributed to weakness in the theater channel and foreign exchange headwinds [7][12]. Cost and Expenses - Total operating expenses were $89.7 million, representing 25.2% of sales, slightly up from 25.1% in the prior year [8][9]. - Marketing expenses increased to $28.5 million, or 8.0% of sales, reflecting higher brand amortization costs [8][14]. - Distribution costs decreased to $41.8 million, or 11.7% of sales, down from 12.3% in the prior year [8][14]. Future Outlook - The company anticipates earnings improvement in the second half of fiscal 2025, driven by a rebound in theater traffic and selective price increases [5][6]. - North American box office sales are projected to rebound by 30% or more in the fiscal third quarter, following a 10% decline in the second quarter [5][6]. Shareholder Actions - The company repurchased approximately 39,000 shares for about $5.0 million, demonstrating confidence in long-term business value and commitment to enhancing shareholder value [6][9].