John B. Sanfilippo & Son Reports 3.8% Sales Increase but Declining Gross Profit for Fiscal Year 2025

John B. Sanfilippo & Son, Inc. reported a net sales increase of 3.8% for the fiscal year ending June 26, 2025, reaching $1.107 billion, compared to $1.067 billion in the previous year. The company's gross profit, however, decreased by 5.0% to $203.5 million, resulting in a gross profit margin decline from 20.1% to 18.4%. This decline was attributed to rising commodity acquisition costs for tree nuts and competitive pricing pressures, despite increased production volume and improved manufacturing efficiencies. Net income for the year was $58.9 million, or $5.06 per share, down from $60.2 million, or $5.19 per share, in fiscal 2024.

The company experienced significant operational changes, including the acquisition of snack bar assets from TreeHouse Foods, which was completed in September 2023. This acquisition, valued at approximately $59 million, was aimed at expanding the company’s capabilities in the growing bar category and diversifying its product offerings. The Lakeville Acquisition contributed to a 3.4% increase in sales volume, although excluding this impact, sales volume decreased by 1.7%. The company also reported a 29.5% increase in total inventories, reflecting higher acquisition costs for walnuts and other tree nuts.

In terms of customer engagement, Sanfilippo & Son serves approximately 210 customers across three primary distribution channels: consumer, commercial ingredients, and contract manufacturing. Notably, sales to Walmart accounted for about 40% of total net sales, while sales to Target represented approximately 11%. The consumer channel remains the largest, contributing 82% of total sales, with branded products making up 16% of consumer channel sales. The company continues to focus on expanding its private brand business and enhancing its branded product offerings through innovative marketing strategies.

Looking ahead, the company plans to invest approximately $90 million in capital expenditures to enhance production capabilities and efficiency. This includes the purchase of new equipment and infrastructure improvements. However, the company faces challenges such as rising commodity prices, inflation, and changing consumer preferences, which may impact future sales and profitability. The management remains optimistic about leveraging its operational strengths and strategic acquisitions to navigate these challenges and drive growth in the coming fiscal year.