J+J Snack Foods: Reports Q3 Fiscal 2023 Results

Pennsauken / NJ. (jj) J+J Snack Foods Corporation reported financial results for the second quarter ended March 25, 2023. President and CEO Dan Fachner: «I would like to thank our employees for delivering a record third quarter as our business continues to build sales and profit momentum across all three of our business segments. Our results showcase the positive impact of the various operational and strategic initiatives undertaken over the past two years combined with an improving inflationary environment. Net sales grew by double digits to USD 425.8 million driven by Food Services sales growth of 11.9 percent and Frozen Beverages sales growth of 20.0 percent. Our Frozen Beverages business delivered record sales and profits for the quarter led by a recovering theater industry and strong gross margin performance. Company operating income grew 127.2 percent in the quarter, led by an improvement in gross margins to 33.6 percent and lower distribution expenses.»

«Our gross margin initiatives and strategies are starting to gain momentum helping us to drive improved profitability. Like most of our industry, we are beginning to see cost inflation stabilize for most ingredients, except for sugar/sweeteners and mixes. In addition, we are seeing margin mix improvement led by our investments and focus on growing core products, including churro’s, pretzels, frozen beverages, and frozen novelties. Pricing actions are now better aligned with cost, and we are achieving added efficiency across our manufacturing plants. The team is successfully executing on cross-selling opportunities and gaining placement in new channels. We believe these improving gross margin trends combined with a strong sales plan across our three business segments has us well positioned for continued growth.»

«Operationally, our teams have been diligently working to improve performance across all facets of our business. As previously mentioned, we are transforming how we manage product through our warehouses and ship to customers. A key strategy in this transformation is the build-out of three geographically positioned regional distribution centers. The first of these RDCs recently opened in Terrell, Texas in June and the other two locations are scheduled to open later this calendar year and in early 2024. These initiatives will simplify our logistics network by moving from over thirty warehouse locations to less than 10, resulting in improved customer service and lower distribution cost. We have fully transitioned management of shipping and distribution logistics to a third party who specializes in distribution and logistics, helping us more efficiently and effectively operate our logistics network. In addition, we have fully rolled out six state-of-the-art production lines adding capacity to support growth in key core product categories such as pretzels, churros and frozen novelties.»

«Looking forward, we are excited about the opportunities in front of us and confident in our ability to create added value for shareholders. We have a strong leadership team and benefit from the tremendous commitment and talent of our people. We have the right strategy to grow this business supported by aligned initiatives across sales, marketing, operations, and supply chain. We believe our initiatives are working and positioning us for continued growth. This momentum, along with the health of our business, balance sheet and liquidity position, gives us confidence that we are on the right path to continue to deliver strong results.» For additional information please read the PDF file below (97 KB):

20230801-JJ-Q3-2023.