An increase in moviegoers is beneficial to J&J Snack Foods
NJ PENNSAUKEN — A new logistics system and a spike in movie theater attendance drove J&J Snack Foods’ third-quarter earnings, which concluded on June 24. The company’s introduction of the Hola! Churro line last winter and its acquisition of Dippin’ Dots little over a year ago have both shown to be key growth drivers in a shifting retail environment.
Daniel Fachner, president and CEO of J&J Snack Foods, stated during a conference call with analysts on August 1st, “We have really built a business balanced across multiple products, channels, and customer segments, which together helps us adapt to changing consumer and snacking occasions.” “We manage this portfolio to take full advantage of our possibilities for growth in the retail, frozen beverage, and food service sectors. This quarter’s results are a fantastic illustration of our adaptable business plan and our capacity to keep boosting sales and profits.
J&J Snacks had a 125% increase in net income from $15.56 million, or 81¢ per share, in the same time last year to $34.98 million, or $1.82 per share on common stock, in the third quarter that ended on June 24. From $380.23 million to $425.77 million, net sales grew by 12%.
Mr. Fachner reported that the company’s transportation network is now managed entirely by NFI Logistics, which has improved truck capacity, minimized kilometers driven, decreased stops, and improved customer service. Furthermore, the organization has initiated preparations to establish three strategically located regional distribution centers (RDCs), following the completion of its initial RDC in Terrell, Texas, towards the end of July. Near the end of this year, two more RDCs are scheduled to open, and
Ken Allen Plunk, senior vice president, chief financial officer, and treasurer of J&J Snack Foods, stated, “Our supply chain transformation initiatives, along with declining diesel prices and carrier costs, are starting to drive improvements in shipping efficiency, cost per truck, and cost per pound.” Expenses for selling and marketing made up 7.4% of sales, up from 6.3% during the same time last year. And 74% in Q2 ’23, which were mostly influenced by when money was spent on sponsorships and trade exhibits.
Mr. Plunk stated that the company noticed a minor shift in traffic in the amusement park segment because of the intense heat that was seen throughout the United States this summer, despite the fact other categories like movie theaters and indoor entertainment centers had gained popularity during the pandemic.
At J&J Snack Foods, operating income from foodservice increased to $20.79 million from $2.64 million. From $227.84 million to $254.98 million, sales grew by 12%. Churros had a roughly 18% increase in sales to $30.47 million from $25.61 million in the foodservice division, while bakery items saw an 8% decrease in sales to $87.58 million from $95.5 million in the same period last year. Soft pretzel sales rose from $55.95 million to $63.53 million, a 13% increase. Meanwhile, handheld sales dropped sharply to $17 million from
Operating income in the retail supermarket segment increased by 56% to $4.17 million in the third quarter of this year from $2.34 million in the same period the previous year. From $61.01 million to $61.15 million, sales grew somewhat. Soft pretzel sales in the retail supermarket segment decreased by 13% to $10.27 million. Sales of biscuits decreased somewhat to $5.14 million from $6.07 million during the same time last year, while sales of frozen novelties remained essentially steady at $41.68 million from $41.87 million. Handheld item sales increased significantly from $1.59 million to $4.45 million.
As per our earlier conversation, we are presently introducing Superpretzel Bavarian sticks, nibbles, and mini dogs into the retail market, bolstered by robust sales strategies and marketing campaigns, stated Mr. Fachner. Luigi’s, Dogsters, and Icee sticks continue to lead the way in Frozen novelty sales, with each product’s success above that of the category. Hello! As we launch this expanding brand into retail, churros will start delivering this month in the Northeast.
“Going to our third business category, frozen beverages, we witnessed record Q3 sales of $109.6 million, which is indicative of both the continued performance at our Mexico operations and the robust resurgence in the theater channel. Following more successful film releases and larger box office receipts, there is a lot of excitement in the theater sector.
J&J Snack reported operating income of $23.34 million in the frozen beverages division, a 36% increase from $16.28 million during the same time last year. Sales reached $72.88 million, a 23% increase.
Drink sales are up 26%, Mr. Plunk stated, “and we’re really excited about what we saw there in terms of frozen beverages.” 20% of volume overall is up more than 9% for the quarter. We discussed how the theater industry is rebounding, and in the last few weeks, people have been going to the movies more than they have in a very long time.
The nine months ending June 24th saw an overall increase in net earnings of $48.49 million, or $2.52 per share, compared to $29.93 million, or $1.56 per share, during the same period last year, a 62% increase. From $980.23 million to $1.11 billion, net sales increased by 14%.