JJSF - J&J Snack Foods gains after margins soar in FQ3

2023-08-01 11:41:40 ET

J&J Snack Foods Corp. ( NASDAQ: JJSF ) rallied on Tuesday after beating FQ3 profit estimates by a wide margin.

Revenue was up 12.0% during the quarter to $425.8M, but fell $17M short of the consensus estimate. However, adjusted EPS soared 102% during the quarter to $1.92 and easily topped the consensus mark of $1.53. Adjusted operating income rose 104.8% to $51.1M during the quarter and adjusted EBITDA was 73.3% higher to $66.6M. Gross profit as a percentage of sales was 33.6% vs. 28.7% a year ago. Notably, JJSF said it saw low single digit inflation in the quarter.

J&J Snack Foods ( JJSF ) noted that gross margin initiatives and strategies are starting to gain momentum and are helping the New Jersey-based company see 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, including Dippin’ Dots ICEE Cherry ‘n Blue Razz and gaining placement in new channels."

Looking ahead, JJSF will be launching SuperPretzel Bavarian sticks, SuperPretzel mini-dogs and Hola! Churro’s into retail in FQ4 and leveraging cross-selling opportunities to grow Dippin’ Dots into theaters JJSF management said it improving gross margin trends combined with a strong sales plan across the three business segments has the company well positioned for continued growth.

Shares of J&J Snack Foods Corp. ( JJSF ) were up 4.39% to $167.36 at 11:38 a.m. on Tuesday after carving out a new 52-week high of $176.94 earlier in the session.

More on J&J Snack Foods:

• Growth metrics on J&J Snack Foods Corp.
• Recent option trades on J&J Snack Foods Corp.
• Seeking Alpha's Quant Rating for J&J Snack Foods Corp.

For further details see: