John B. Sanfilippo & Son(US:JBSS)2026-01-29 21:27Financial Performance - Net sales for the second quarter of fiscal 2026 increased by 4.6% to $314.8 million, compared to $301.1 million in the same quarter of fiscal 2025[80]. - Gross profit increased by $6.9 million, or 13.2%, to $59.2 million for the second quarter of fiscal 2026, with a gross profit margin of 18.8%[99]. - Net income for the second quarter of fiscal 2026 was $18.0 million, or $1.54 per common share basic, compared to $13.6 million, or $1.17 per common share basic, for the second quarter of fiscal 2025[113]. - Income from operations was $53.0 million, or 8.6% of net sales, for the first twenty-six weeks of fiscal 2026, compared to $36.4 million, or 6.3% of net sales, for the same period in fiscal 2025[107]. Sales and Volume - Sales volume decreased by 9.7% in the second quarter of fiscal 2026, with a significant decline attributed to granola sold in the contract manufacturing channel[88]. - Sales volume for the first twenty-six weeks of fiscal 2026 decreased by 5.3%, with declines in bars, granola, trail mix, and cashews, while walnuts, peanuts, pecans, and almonds saw increases[89]. - Net sales in the consumer distribution channel increased by $24.5 million, or 5.1%, while sales volume decreased by 6.8% in the first twenty-six weeks of fiscal 2026 compared to the same period in fiscal 2025[94]. Expenses and Margins - Total operating expenses for the second quarter of fiscal 2026 increased by 0.9%, but as a percentage of net sales, they decreased to 10.5% from 10.9%[83]. - Operating expenses as a percentage of net sales decreased to 9.8% for the first twenty-six weeks of fiscal 2026, down from 10.8% in the same period of fiscal 2025[104]. - Interest expense decreased to $0.5 million for the second quarter of fiscal 2026, down from $0.8 million in the same quarter of fiscal 2025 due to lower average debt levels[108]. Inventory and Costs - The total value of inventories on hand at the end of the second quarter of fiscal 2026 increased by 14.4% to $29.6 million compared to the same period in fiscal 2025[84]. - Total inventories decreased by $19.2 million, or 7.5%, from the inventory balance at June 26, 2025, but increased by $29.6 million, or 14.4%, from the balance at December 26, 2024[119]. - Raw nut and dried fruit input stocks decreased by 2.7 million pounds, or 4.5%, at December 25, 2025, while the weighted average cost per pound of raw nut input stocks increased by 11.8% compared to the end of the second quarter of fiscal 2025[120]. Capital Expenditures and Investments - The company plans significant capital investments in equipment and infrastructure improvements starting in the second quarter of fiscal 2025 to expand production capabilities[69]. - Cash used in investing activities was $46.3 million during the first twenty-six weeks of fiscal 2026, up from $25.6 million in the same period last year[121]. - Capital asset purchases totaled $47.3 million in the first twenty-six weeks of fiscal 2026, compared to $25.5 million in the prior year[121]. - Total capital expenditures for fiscal 2026 are expected to be approximately $112.0 million, including equipment purchases and upgrades[121]. Financing and Debt - Cash used in financing activities was $46.5 million during the first twenty-six weeks of fiscal 2026, compared to cash provided of $5.6 million in the same period last year[122]. - Net repayments under the Credit Facility were $47.6 million in the first twenty-six weeks of fiscal 2026, compared to net borrowings of $29.3 million in the prior year[122]. - As of December 25, 2025, the weighted average interest rate for the Credit Facility was 6.7%[128]. - The Company had $134.7 million of available credit under the Credit Facility as of December 25, 2025[128]. - The Equipment Loan allows financing of up to $50.0 million for equipment purchases, with an interest rate of SOFR plus an applicable margin of 1.49%[130]. - As of December 25, 2025, $26.2 million of the debt obligation under the Equipment Loan was outstanding[132]. Market and Consumer Trends - The company continues to face challenges from higher food and input costs, ongoing supply chain volatility, and macroeconomic uncertainties impacting consumer demand[71]. - Branded products accounted for approximately 20% of total consumer sales during the second quarter of fiscal 2026, with Fisher branded products making up 78% of branded sales[91]. - Branded products accounted for approximately 17% of total consumer sales in the first twenty-six weeks of fiscal 2026, down from 19% in fiscal 2025[93].