J & J Snack Foods Reports Fiscal 2025 Second Quarter Results

MOUNT LAUREL, N.J., May 06, 2025 (GLOBE NEWSWIRE) — J & J Snack Foods Corp. (NASDAQ: JJSF) (the “Company”) today reported financial results for the second quarter ended March 29, 2025.

This press release contains non-GAAP financial measures. Please refer to the Non-GAAP Financial Measures section below for reconciliations to the most comparable GAAP measures.

Dan Fachner, J&J Snack Foods Chairman, President, and CEO stated, “J & J Snack Foods total net sales for our fiscal second quarter declined 1.0% to $356.1 million as compared to the prior year quarter, which primarily was driven by lower sales in our Frozen Beverage and Food Service segments, partly offset by growth in our Retail business.  

“Our second quarter performance was primarily impacted by three factors. First, theater channel weakness impacted volumes in our Frozen Beverage business and, to a lesser extent, our Food Service business. The Frozen Beverage segment also was impacted by foreign exchange headwinds. Second, Food Service sales declined primarily due to the conclusion of limited-time-offer churro volumes from a year ago. Third, we experienced continued cost inflation, which was mostly chocolate in our bakery business.

“Despite the challenges in the quarter, we expect earnings to improve in the second half, driven by a rebound in theater traffic, as well as actions we are taking to implement additional price increases and to grow volume. North American box office sales, which are estimated to have declined by about 10% in our fiscal second quarter, are projected to rebound over the previous year by 30% or more during our fiscal third quarter. We have been pleased with the success of the Minecraft movie in April, which is evident in our U.S. Frozen Beverage volumes. Although we achieved price increases in the second quarter, the pace was slower than anticipated as we balanced price and volume considerations. We are implementing selective price increases in the third quarter.

“Underscoring our confidence in the long-term value of the business and our commitment to enhance shareholder value, we repurchased about thirty-nine thousand shares for approximately $5.0 million. We look forward to delivering a strong second half of fiscal 2025 and continuing to drive durable value creation for our shareholders.”

Second Quarter Highlights

Net sales declined 1.0% from the prior year quarter to $356.1 million due primarily to lower Frozen Beverage and Food Service sales.

Key highlights include:

• Food Service segment sales decreased 1.7%
• Retail Supermarket segment sales increased 1.8%
• Frozen Beverage segment sales decreased 0.9%

Gross profit decreased from $108.2 million in the prior year quarter to $95.7 million, while gross margin declined from 30.1% to 26.9%. The softness in our Frozen Beverage segment was primarily caused by lower volumes and foreign exchange headwinds, which contributed to approximately 60 basis points of gross margin compression. The loss of churro and pretzel volumes in Food Service together contributed to approximately 190 basis points of gross margin compression.

Total operating expenses of $89.7 million represented 25.2% of sales for the quarter, compared to 25.1% in Q2 ’24.

• Marketing and selling expenses were $28.5 million or 8.0% of sales, up from 7.7% last year, and increased 3.1% versus the prior year quarter. Just over half of the increase was related to higher brand amortization expenses associated with a legacy churro brand that is being phased out for the Hola churro brand.
• Distribution costs were $41.8 million or 11.7% of sales, down from 12.3% in the prior year. Costs declined by 5.5%, which primarily reflects the impact of start-up costs at our regional distribution centers last year.
• Administrative expenses were $19.8 million or 5.5% of sales in the current quarter, versus 5.1% in the prior year period. Costs increased by 6.7%, reflecting higher compensation costs as well as higher non-recurring legal expenses. 

Operating income was $6.0 million in the second quarter, compared to $17.9 million in the prior year period. Net earnings were $4.8 million, compared to $13.3 million in the prior year period. The effective tax rate was 27.2%, compared to 26.6% in the prior year.

Food Service Segment Second Quarter Highlights

• Food Service sales decreased 1.7% to $226.1 million  
• Churro sales declined 18.7% due to the loss of strong limited time offer volumes in the prior year.   Pretzel sales declined 7.9% due to weakness in theaters as well as general category softness.   Handheld sales increased 14.7%.
• Sales of new products and added placement with new customers were approximately $6.5 million in the quarter, driven primarily by the addition of churro related products and new distribution of cookies.
• Operating income decreased 84.3% to $1.2 million driven primarily by volume declines.

Retail Supermarket Segment Second Quarter Highlights

• Retail sales increased 1.8% to $53.8 million
• Frozen novelties sales increased 14.7% on continued volume growth and mix improvements. Handheld sales declined 28.4% due to capacity constraints caused by a fire at a facility last year.
• Sales of new products and added placement with new customers were approximately $2.9 million in the quarter driven by the recent launch of our Dippin’ Dots Sundaes as well as additional distribution of pretzel dogs.
• Operating income decreased 45.8% to $2.8 million.

Frozen Beverages Segment Second Quarter Highlights  

• Frozen beverage segment sales decreased 0.9% to $76.2 million
• Beverage sales declined 7.1% attributed to weakness in the theater channel caused by underperforming movie releases.
• Machine Service revenues increased 4.2% on higher call volumes, while equipment sales increased 17.0%, primarily attributed to growth for convenience customers.
• Operating income decreased 58.7% to $2.0 million driven primarily by weak frozen beverage volumes and foreign exchange related headwinds.

Conference Call
J&J Snack Foods Corp. will host a conference call to discuss results and business outlook on May 6, 2025, at 10:00 a.m. Eastern Time. Conference call participants should register by clicking on this Registration Link to receive the dial-in number and a personal PIN, which are required to access the conference call. A live audio webcast of the conference call will also be available on the Investors homepage at investors.jjsnack.com.

About J & J Snack Foods Corp.
J & J Snack Foods Corp. (NASDAQ: JJSF) is a leader and innovator in the snack food industry, providing innovative, niche, and affordable branded snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, the #1 soft pretzel brand in the world, as well as internationally known ICEE and SLUSH PUPPIE frozen beverages, DIPPIN’ DOTS ice cream, LUIGI’S Real Italian Ice, MINUTE MAID* frozen ices, WHOLE FRUIT sorbet and frozen fruit bars, HOLA! CHURROS, and THE FUNNEL CAKE FACTORY funnel cakes and several bakery brands within DADDY RAY’S, COUNTRY HOME BAKERS and HILL & VALLEY. For more information, please visit http://www.jjsnack.com.

*MINUTE MAID is a registered trademark of The Coca-Cola Company.

Cautionary Statement Regarding Forward-Looking Information
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s expected future financial position, results of operations, revenue growth and profit levels, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “goals,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. This includes, without limitation, our statements, and expectations regarding any current or future recovery in our industry and the future impact of our operational efficiency projects. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of management. We do not undertake a duty to update such forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include consumer spending, price competition, acceptance of new products, the pricing and availability of raw materials, transportation costs, changes in the competitive marketplace the uncertainty and ultimate economic impact of the COVID-19 pandemic or similar health outbreaks, and other risks identified in our annual report on Form 10-K, and our other filings with the Securities and Exchange Commission. Many of these factors are outside of the Company’s control.

Non-GAAP Financial Measures
Adjusted EBITDA consists of net earnings adjusted to exclude: income taxes (benefit); investment income; interest expense; depreciation and amortization; share-based compensation expense; net (gain) loss on sale or disposal of assets; impairment charges, restructuring costs, merger and acquisition costs, acquisition related inventory adjustments, strategic business transformation costs, integration costs, and non-recurring legal expenses.

Adjusted Operating Income consists of operating income adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustments, strategic business transformation costs, integration costs and non-recurring legal expenses.

Adjusted Earnings per Diluted Share consists of net earnings adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustment, strategic business transformation costs, integration costs, and non-recurring legal expenses. For purposes of comparability, the income tax effect of pre-tax adjustments is determined using statutory tax rates.

This press release contains certain non-GAAP financial measures; Adjusted EBITDA, Adjusted Operating Income, and Adjusted Earnings per Diluted Share. A “non-GAAP financial measure” is a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) in the statements of income, balance sheets, or statements of cash flow of the company. Pursuant to applicable reporting requirements, the company has provided reconciliations below of non-GAAP financial measures to the most directly comparable GAAP measure.

The non-GAAP financial measures presented within the Company’s earnings release are not indicators of our financial performance under GAAP and should not be considered as an alternative to the applicable GAAP measure. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating these non-GAAP measures, you should be aware that in the future we may incur income, expenses, gains and losses, similar to the adjustments in this press release. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence to our GAAP results and using non-GAAP measures only as supplemental presentations.

The non-GAAP measures presented are utilized by management to evaluate the Company’s business performance and profitability by excluding certain items that may not be indicative of our recurring core business operating results. The Company believes that these measures provide additional clarity for investors by excluding specific income, expenses, gains, and losses, in an effort to show comparable business operating results for the periods presented. Similarly, Management believes these adjusted measures are useful performance measures because certain items included in the calculations may either mask or exaggerate trends in the Company’s ongoing operating performance. See the reconciliation of Non-GAAP Financial Measures below.

Investor Contact:

Joseph Jaffoni, Norberto Aja, or Jennifer Neuman
JCIR
(212) 835-8500
jjsf@jcir.com