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Dec 24, 2022
J&J Snack Foods Q1 2023 Earnings Report
Reported a revenue increase of 10.3% with significant growth in Food Service sales and Frozen Beverage segment.
Key Takeaways
J&J Snack Foods Corp. reported a 10.3% increase in net sales to $351.3 million for the first quarter of fiscal 2023. The company experienced growth across all three business segments, driven by core products like pretzels, churros, frozen novelties, and frozen beverages. However, inflationary pressures and a softening consumer environment impacted bottom-line results, leading to a decrease in net earnings and operating income compared to the prior year period.
Net sales increased by 10.3% to $351.3 million, driven by growth across all business segments.
Food Service sales increased by 12.5%, Retail segment sales increased by 0.9%, and Frozen Beverage segment sales increased by 9.2%.
Gross profit as a percentage of sales was 25.9%, compared to 24.9% in the prior year period.
Operating income decreased by 37.2% to $9.3 million due to inflationary pressures and increased operating expenses.
J&J Snack Foods
J&J Snack Foods
J&J Snack Foods Revenue by Segment
Revenue by Segment
Food Service Revenue
CapyFin.comFrozen Beverages Revenue
CapyFin.com Forward Guidance
The company expects to continue growing its top line and sees benefits from various initiatives throughout the balance of fiscal 2023. They anticipate improved gross margins due to pricing actions and improved mix, and expect strategic and operational initiatives to improve logistics management and increase efficiency across the distribution network and supply chain.
Positive Outlook
- Momentum remains strong as core brands and new products continue to resonate with consumers.
- Strategic initiatives are expected to drive improved gross margins.
- Operational efficiencies and capacity improvements are being implemented through new production lines and optimized distribution networks.
- Price increases are expected to continue to drive improved gross margins.
- Dippin' Dots business is expected to drive the majority of its profitability in the second half of the year.
Challenges Ahead
- Ongoing inflationary pressures and the softening consumer environment impacted year-over-year bottom-line results.
- The industry experienced some declines in traffic and volume in the first quarter.
- Distribution expenses continue to be a cost pressure.
- Dippin' Dots negatively impacts results in the first quarter due to its seasonality.
- The company is managing through cost pressures on the expense side, most notably distribution expenses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income