J&J Snack Foods’ Q1 net sales rise 32% leading to EPS of $0.58

“Our first quarter fiscal 2022 results reflect a continuation of positive consumer trends and healthy demand for our products even as the spread and impact of COVID-19 accelerated throughout the quarter," said J&J Snack Foods Corp president and chief executive Dan Fachner.

J&J's sales increased 32% year-over-year and by 17% versus the same period in fiscal 2019, led by strong results from its core pretzel and churro frozen novelty products, for its first 2022 quarter, ended Dec. 25. In J&J's frozen beverage segment, sales in the first quarter exceed pre-pandemic level. 

 Key highlights

• Foodservice sales exceeded first quarter 2021 by 32%, and surpassed first quarter 2019 by 18%.
• Retail segment sales exceeded first quarter 2021 by 9% and surpassed first quarter 2019 by 36%.
• Frozen Beverage segment sales beat first quarter 2021 sales by 54%, led by frozen beverages growing over 113%; frozen beverage sales surpassed first quarter 2019 by 8% led by strong growth across restaurant, convenience and amusement channels, and an improving theater business that grew sequentially each month of the quarter.
• Gross profit as a percentage of sales was 25% in first quarter 2022, compared with 21% in first quarter 2021, reflecting the operating leverage benefit of increased sales, favorable product mix and corresponding margin efficiencies.

“As was the case last quarter, our industry continues to experience unprecedented inflationary pressures and higher-than-expected cost increases across many facets of the business, from raw materials and ingredients, to transportation, packaging and labor," Fachner cautioned.

"First quarter fiscal 2022 gross margin was 25%, favorably comparing to 21% for the prior year," he continued, "but below the 28% gross margin generated in the comparable 2019 period. Our organization continues to focus on specific actions to offset the short-term cost challenges and we have identified a number of opportunities to reduce expenses across our business, including procurement, R&D, production and distribution."

Pensauken, NJ-based J&J will be activating four new production lines this year to improve efficiencies. Additional price increases in all product categories are also expected this year.