J & J Snack Foods Reports Fiscal 2025 Second Quarter Results

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].