J&J Snack Foods Reports Decline in Net Sales and Profitability for Q2 Fiscal 2025

J&J Snack Foods Corp. reported a decline in net sales and profitability for the second quarter of fiscal 2025, as detailed in its latest 10-Q filing. For the three months ending March 29, 2025, net sales decreased by $3.6 million, or 1.0%, to $356.1 million, while net earnings fell by $8.5 million, or 63.8%, to $4.8 million. The company attributed the decline in earnings to rising raw material costs, particularly cocoa, and the loss of sales from limited-time churro promotions that were not repeated in the current quarter. Gross profit for the quarter was $95.7 million, down 11.6% from the previous year, reflecting a gross margin decrease from 30.1% to 26.9%.

In contrast, the six-month period ending March 29, 2025, saw a slight increase in net sales, which rose by $10.7 million, or 1.5%, to $718.7 million. However, net earnings for the same period decreased by $10.6 million, or 51.6%, to $10.0 million. The company noted that organic sales growth was driven by all three business segments, although the second quarter experienced slight declines in foodservice and frozen beverages. Operating income for the six months was $12.3 million, down from $27.6 million in the prior year.

Strategically, J&J Snack Foods has been active in expanding its product portfolio and operational capabilities. The company completed the acquisition of the Thinsters cookie business from Hain Celestial Group for approximately $7.0 million in cash, which is expected to enhance its offerings in the snack food segment. Additionally, the company has opened three new regional distribution centers aimed at improving logistics and reducing costs, and has added six new production lines to increase capacity for core products like pretzels and churros.

Operationally, the company reported a decrease in customer counts and engagement metrics, particularly in the foodservice segment, where sales of soft pretzels and churros declined significantly. The retail supermarket segment saw a mixed performance, with frozen novelties experiencing growth, while sales of soft pretzels and handheld products fell. The company’s employee headcount remained stable, and it continues to focus on improving operational efficiencies to counteract inflationary pressures and rising raw material costs.

Looking ahead, J&J Snack Foods remains cautious about the economic environment, which has been characterized by volatility and inflation. The company plans to continue leveraging its strategic initiatives to enhance operational efficiencies and expand its market presence. Management expressed optimism about future growth opportunities, particularly through new product launches and the integration of recent acquisitions, while also acknowledging the challenges posed by fluctuating consumer demand and rising costs.