Pennsauken / NJ. (jj) J+J Snack Foods Corporation reported financial results for the third quarter, that ended in Camden County on June 25, 2022.
President and CEO Dan Fachner commented, «J+J Snack Foods delivered strong results in fiscal third quarter, including record quarterly sales and significant improvements in gross margin at 28.7 percent. This performance reflects a number of positive trends across all three of our business segments, including strong demand for our higher-margin core products, continued strength in our key sales channels and expanding penetration of our products with new and existing customers. I am very proud of the J+J team as they worked tirelessly to help us rebound from the ERP implementation challenges in Q2 and deliver our best sales quarter in the history of the company.»
«We delivered wide-spread strength across all three of our business segments. Frozen Beverages segment sales grew 23.5 percent compared to the same quarter last year, led by a 36.7 percent increase in beverages. Food Services segment sales increased 16.0 percent year-over-year, driven by exceptional growth in our handheld, churros and frozen novelty offerings, as well as double-digit growth in bakery and 9.9 percent growth in pretzels. Retail sales grew 13.3 percent in the quarter and 46.1 percent above pre-Covid 2019 third quarter led by frozen novelties.» «I am excited about the opportunities ahead for our Company and confident that our portfolio of brands, investments in our business and targeted strategic initiatives will help us to continue to grow, and to do so more efficiently. We are focused on strengthening our operating infrastructure and improving efficiencies in order to become a more resilient and faster growing organization and deliver added value to our customers and shareholders. We believe the recent acquisition of Dippin’ Dots fits perfectly in our brand portfolio and customer strategy and will play a pivotal role in accelerating our growth. We are leveraging a strong balance sheet and healthy liquidity position to acquire a profitable and scalable business that complements our long-term growth strategy and is expected to be accretive to EPS. We have already identified a number of synergies and revenue growth opportunities that we expect to realize over time as we grow the value of the Dippin’ Dots brand. In the coming quarters, we will continue to work with the Dippin’ Dots team to ensure a smooth integration and to deliver incremental value to our shareholders.»
«As was the case in prior quarters, we experienced significant inflationary pressures, including raw materials and packaging, that continue to impact profit margins. We also continue to face historic cost pressures in our supply chain where we saw both sequential and year-over- year increases driven by higher truck driver wages, and rising carrier, storage and fuel costs. In order to offset these pressures, we have a number of cost reduction initiatives underway in R+D, procurement, plant operations and distribution that we expect to see added contribution from in the latter part of the year. In addition, we instituted two price increases over the last nine months to further help offset the inflationary pressures and have already started to see improved gross margins as our most recent price increase took effect in April. Going forward, we are in the process of executing a third price increase, which along with our focus on improved manufacturing efficiencies, cost reduction initiatives, and improved product mix should improve our operating profit margins. As the inflationary environment stabilizes and we execute these initiatives, we are confident that our business will deliver higher margins along with our strong sales trends.»
«In summary, we are pleased with our results for the fiscal third quarter as our business momentum continued despite the ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets. Despite these challenges, our long-term vision has never been clearer. We have the right team, brand portfolio, and strategy to win in the marketplace.»
For additional information please refer to the company’s news release (PDF | 116 KB):20220802-JJ-SNACK-FOOD-Q3-2022