Profits of J&J Snack Foods soar in the fiscal year 2021.
Increasing sales of staple items including churros, soft pretzels, baked goods, and frozen drinks contributed to J&J Snack Foods Corp.’s 28% increase in fourth-quarter sales. Sales and earnings for the year ended September 25, which was a considerable increase from the previous year, indicated a return from the severe decline the company saw in fiscal 2020.
Dan Fachner, president and chief executive officer, stated, “We are pleased with the strong finish to the year and the positive trends we see across our business, including exceeding pre-Covid sales levels in the fourth quarter despite an incredibly challenging operating environment.” Even though fiscal 2019 was one of our best years, our net sales for Q4 of 2021 climbed by 4% when compared to the same period in 2019. This growth was primarily due to a 6% increase in our Food Service segment and a 29% increase in our Retail segment as demand continues to rise at many of our customers’ locations. With sales down 12% in the fourth quarter from fiscal 2019, our Frozen Beverages category is also improving. This is evident from the segment’s quarterly sequential momentum when comparing Q3 ’21 and Q3 ’19. The team is doing an excellent job of striking a balance between efforts to spur growth and develop more effective and efficient operational procedures, even in light of the notable differences between channels that are recovering quickly, like theaters, and channels that are recovering more slowly, like restaurants, entertainment, retail, and convenience stores.
The net income of J&J Snack Foods increased by 204% to $55.607 million, or $2.91 per share, for the fiscal year that ended on September 25, from $18.305 million, or 97¢ per share, for the previous year. $1.145 billion in net sales, up 12% from $1.022 billion, were recorded.
The company’s net income increased by 187% to $18.875 million, or 99¢ per share, in the fourth quarter from $6.584 million, or 35¢, in the previous quarter. $323 million was the net sales amount, up 28% from $253 million.
Impairment costs of $6.4 million for the year and $1.315 million for the fourth quarter were included in the fiscal 2020 results.
The company reported that robust sales of its core goods have been driven by a jump in post-pandemic demand at consumer venues such as sports, amusement parks, schools, convenience stores, and restaurants, which has fueled the fourth-quarter growth in the Food Service division. Sales of soft pretzels increased by 62% to $54.6 million, while sales of churros increased by 121% to $18.6 million. Growing menu penetration and consumer expansion were credited for the latter jump. Sales at bakeries increased by 10% to $85 million. In comparison to the same period last year, when there was a $1.3 million deficit, operating income was $9.3 million.
“The launch of chicken bake items and, to a lesser extent, a new cookie product under the Honolulu Cookie Company brand led to an increase in sales of new products to $5.5 million,” the business reported.
During a call with investment analysts on November 15, Mr. Fachner provided information regarding the recovery of business channels that were severely impacted by the epidemic.
“Many of our customers are seeing higher food and beverage spending per person, which would lead to higher average transactions or an even stronger appeal for many of our portable products that are easy to enjoy on the go,” he said, adding that foot traffic is still recovering to pre-pandemic levels. Overall, a lot of our important client segments ought to continue to gain from robust consumer purchasing in 2022. We are pleased with our current position and our future plans in the food service industry as a result, and we anticipate that these encouraging trends will last into the new year.
The company’s Retail business had a 9% decline in sales during the fourth quarter, in contrast to Food Service. Sales of soft pretzels decreased by 1% from the fourth quarter of 2020, but increased by over 100% from the last quarter of the previous fiscal year. Operating income decreased to $5.7 million from $8.7 million in the previous year.
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During the call, Mr. Fachner mentioned that margins have been negatively impacted by growing supply chain costs, which include increased labor costs, logistics, and commodity pricing.
“Specifically, we are witnessing double-digit price rises for ingredients like oils, sweeteners, and flour, and shipping expenses are continuing to rise at an unprecedented rate due to rising diesel prices, carrier fees, and an increasingly severe driver shortage,” Mr. Fachner stated.
In addition to cost-cutting measures, he stated that the company has implemented a number of pricing strategies that “will help drive margins improvement as the effects of these functional challenges and the advantages of our actions align.”