J&J Snack Foods Corp. 2QFY24: Record Quarterly Revenue!

May 29, 2024 | Corporate Insights, No Bull Economics

J&J Snack Foods characterized the consumer environment as “toppy waters” or “ticklish customers”. The company attributes its strong results to offering affordable, experiential products (icees, churros, or pretzels) that may be cut back during a trip to the grocery store but purchased as an affordable treat/reward on the way home from work. Notably, the company expects a -15% decline in its movie industry channel sales because of the 2023 actor strike which weakened the production pipeline (with a rebound expected in ~2 quarters).

Revenue Trends

Category2QFY24 Sales GrowthComments
Enterprise+6.5%Primarily driven by higher volume in all 3 segments.
Food Service+5.4%+29% growth in churros (Subway partnership), +7.7% bakery, and +4.2% frozen novelties. Unit volume growth was reported in cookies & a +5% increase in Dippin’ Dots. A -3% to -4% sales decline in soft pretzels reflected a -15% decline in movie industry channel sales.
Retail Sales+14.1%Growth across all product categories, including +75% growth in handhelds (expanded product placement with a major mass merchant) & +14% in frozen novelties (led by growth of Dogsters & Icee Novelties). Superpretzel branded products (including Bavarian sticks, mini dogs, and bites) continued to perform well with progress reported in expanding its Hola! Churros brand in Retail. Biscuit sales increased +6% & Pretzel sales increased +2.7% (led by a continued expansion of its Superpretzel products in retail).
Frozen Beverage+5%Results reflected beverage sales growth of +6.9%, consistent with consumer trends across most customer channels.

Margin Trends

  • 1Q24 adjusted EBITDA increased +43.1% y/y, reflecting: top-line growth; and a +3.3% y/y increase in gross margin (improved product mix & production efficiencies).  
  • Input cost inflation, which declined from double digits a few months ago to +6% to +6.5% currently, is expected to settle around +2% to +2.5%.

J&J 2Q24 Financials

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