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Mar 26, 2022
J&J Snack Foods Q2 2022 Earnings Report
J&J Snack Foods' second quarter net sales increased due to growth in core products, overcoming ERP implementation challenges and inflationary pressures.
Key Takeaways
J&J Snack Foods reported a 10% increase in net sales to $281.5 million for the second quarter of fiscal 2022. Sales were driven by growth in core products including pretzels, churros and frozen beverages. The company faced challenges related to the implementation of a new ERP system and significant inflationary pressures, which impacted operating income.
Net sales increased 10% to $281.5 million compared to Q2 of fiscal 2021.
Frozen Beverage segment sales increased 50% year-over-year.
Gross profit as a percentage of sales was 23.2%, compared to 23.8% in Q2 2021, reflecting cost headwinds.
Operating income was $4.1 million, compared to $7.2 million in the prior year period, impacted by ERP conversion and inflation.
Revenue by Segment
Forward Guidance
The company expects the operating and financial benefits of recent initiatives to become more visible in the second half of fiscal 2022, with a strong overall industry environment and consumer spending despite rising prices.
Positive Outlook
- Consumer spending remains healthy.
- Strong demand for products as consumers return to amusement parks, restaurants, retailers, and outdoor venues.
- Frozen Beverages segment sales increased 50% year-over-year.
- Aggressive measures to offset cost challenges, including strategic cost reduction initiatives.
- Recent price increases effective in early April will help offset the impact of cost increases.
Challenges Ahead
- Unexpected challenges related to the early-February implementation of a new enterprise resource planning system.
- ERP implementation had a negative, one-time impact on fiscal second quarter sales of approximately $20 million and on fiscal second quarter operating income of approximately $4.5 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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