J & J Snack Foods (JJSF) AI Stock Analysis

• Market Cap: $2.62B
• Dividend Yield: 2.29%
• Average Volume (3M): 154.19K
• Price to Earnings (P/E): 31.0
• Beta (1Y): 0.27
• Revenue Growth: 2.14%
• EPS Growth: 5.38%
• Country: US
• Employees: 5,000
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Packaged Foods
• EPS (TTM): 4.33
• Shares Outstanding: 19,490,253
• 10 Day Avg. Volume: 165,581
• 30 Day Avg. Volume: 154,186
• PEG Ratio: 5.77
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.55
• Price to Cash Flow (P/CF): 17.60
• P/FCF Ratio: 17.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $175.00
• Price Target Upside: 30.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

J & J Snack Foods shows strong financial performance with robust revenue growth and cash flow generation, supported by a stable balance sheet with low leverage. However, the technical indicators highlight a bearish trend, suggesting caution. The valuation is on the higher side, but the dividend yield offers some compensation. The recent earnings call highlighted operational improvements but also noted challenges with declining margins and profitability pressures.

Positive Factors

New Product Launch

The most impactful new product launch of the year, Dippin’ Dots ice cream sundaes at retail, launched to strong customer acceptance in 1Q25.

Revenue Growth

Revenue growth of ~4% in FY25 is driven by new product introductions, increased cross-selling success across distribution channels, and a strong recovery in the theatre customer vertical.

Share Repurchase Program

Given the company’s healthy balance sheet, with $73.6M in cash and no debt, management announced a $50M 2-year share repurchase program.

Negative Factors

Commodity Inflation Impact

Commodity inflation, currency pressures from the Mexican Peso, and adverse product mix were key factors affecting gross margins negatively.

Gross Margin Miss

Gross margins of 25.9% missed consensus estimates by 150bps, accounting for ~85% of the adjusted EPS miss in F1Q.

J & J Snack Foods Business Overview & Revenue Model

Company Description

J&J Snack Foods Corp. manufactures, markets, and distributes nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates in three segments: Food Service, Retail Supermarkets, and Frozen Beverages. The company offers soft pretzels under the SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT'S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE'S, and LABRIOLA, as well as under the private labels. It also provides frozen novelty under the LUIGI'S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE, and MINUTE MAID brands; churros under the TIO PEPE'S and CALIFORNIA CHURROS brands; and handheld products under the SUPREME STUFFERS and SWEET STUFFERS brands. In addition, the company offers bakery products, including biscuits, fig and fruit bars, cookies, breads, rolls, crumbs, muffins, and donuts under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and HILL & VALLEY brands, as well as under private labels; and frozen beverages under the ICEE, SLUSH PUPPIE, and PARROT ICE brands. Further, it provides funnel cakes under the FUNNEL CAKE FACTORY brand, as well as various other food products; and sells machines and machine parts to other food and beverage companies. The company sells its products through a network of food brokers, independent sales distributors, and direct sales force. It serves snack bars and food stand locations in chain, department and mass merchandising stores, malls and shopping centers, fast food and casual dining restaurants, stadiums and sports arenas, leisure and theme parks, convenience stores, movie theatres, warehouse club stores, schools, colleges and other institutions, and independent retailers. The company was incorporated in 1971 and is headquartered in Pennsauken, New Jersey.

How the Company Makes Money

J & J Snack Foods generates revenue primarily through the sale of its diverse snack food and beverage offerings. The company operates through three main segments: Food Service, Retail Supermarkets, and Frozen Beverages. In the Food Service segment, J & J Snack Foods supplies snack items to various food service customers, including restaurants, stadiums, and theme parks. The Retail Supermarkets segment focuses on selling branded and private label products to grocery stores and mass merchandisers. The Frozen Beverages segment generates income through the sale of frozen beverage products and related equipment, servicing venues such as convenience stores, amusement parks, and theaters. Key partnerships with major retail chains and food service providers, along with a focus on innovation and expanding product lines, significantly contribute to the company's earnings.

J & J Snack Foods Financial Statement Overview

Summary

Overall, J & J Snack Foods displays robust financial health with consistent revenue growth and strong cash flow generation. The company maintains a solid balance sheet with low leverage, supporting financial stability. While profitability remains strong, there are minor concerns with the declining EBIT margin. The company's financials are well-positioned for continued growth in the consumer products sector.

Income Statement

J & J Snack Foods exhibits strong revenue growth with a Revenue Growth Rate of 15.1% TTM. The company maintains healthy profitability with a Gross Profit Margin of 30.4% and a Net Profit Margin of 5.3% TTM. However, there is a slight decline in the EBIT Margin to 7.2% TTM from 7.5% in the previous year.

Balance Sheet

The company has a moderate Debt-to-Equity Ratio of 0.17, indicating low leverage. The Equity Ratio is robust at 70.3%, reflecting a stable capital structure. Return on Equity is solid at 8.9% TTM, although it has seen a slight decline compared to the previous year.

Cash Flow

J & J Snack Foods demonstrates strong cash flow generation with a significant Free Cash Flow Growth Rate of 28.1% TTM. The Operating Cash Flow to Net Income Ratio is high at 1.89, indicating efficient cash conversion. The Free Cash Flow to Net Income Ratio is also strong at 1.03.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
1.59B	1.57B	1.56B	1.38B	1.14B	1.02B
	Gross Profit
483.84M	486.13M	469.87M	369.64M	298.93M	238.43M
	EBIT
114.10M	117.55M	109.52M	61.80M	71.22M	23.58M
	EBITDA
169.66M	191.37M	174.34M	119.03M	121.88M	74.58M
	Net Income Common Stockholders
84.41M	86.55M	78.91M	47.23M	55.61M	18.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.46M	73.39M	49.58M	39.19M	291.17M	246.96M
	Total Assets
444.22M	1.37B	1.28B	1.22B	1.12B	1.06B
	Total Debt
333.00K	160.50M	121.91M	111.56M	60.53M	61.58M
	Net Debt
-59.67M	87.11M	72.33M	76.38M	-222.67M	-134.23M
	Total Liabilities
93.19M	408.13M	365.72M	353.80M	276.56M	247.06M
	Stockholders Equity
351.04M	956.97M	911.52M	863.17M	845.65M	809.50M
Cash Flow		Free Cash Flow
86.57M	99.50M	67.54M	-61.23M	47.92M	34.33M
	Operating Cash Flow
159.28M	173.07M	172.28M	26.06M	101.50M	92.14M
	Investing Cash Flow
-76.75M	-77.67M	-93.24M	-296.17M	9.94M	-44.46M
	Financing Cash Flow
-52.40M	-68.37M	-66.84M	22.22M	-24.67M	-43.46M

J & J Snack Foods Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 134.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JJSF, the sentiment is Positive. The current price of 134.5 is above the 20-day moving average (MA) of 130.75, above the 50-day MA of 130.21, and below the 200-day MA of 154.49, indicating a neutral trend. The MACD of -0.70 indicates Negative momentum. The RSI at 53.66 is Neutral, neither overbought nor oversold. The STOCH value of 65.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JJSF.

J & J Snack Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMPL	78 Outperform	$3.84B	26.50	8.40%	―	11.47%	2.59%
NOMD	78 Outperform	$2.94B	12.59	8.75%	3.24%	1.88%	24.81%
KLG	68 Neutral	$1.68B	23.51	23.34%	3.31%	-1.99%	-33.52%
UTZ	67 Neutral	$1.87B	70.59	2.33%	1.80%	-2.01%	―
JJSF	64 Neutral	$2.62B	31.04	9.08%	2.29%	2.14%	5.38%
Sector *	63 Neutral	$20.84B	14.17	-16.36%	3.22%	1.30%	4.55%
FLO	59 Neutral	$3.90B	15.80	17.97%	5.19%	0.25%	101.63%

J & J Snack Foods Corporate Events

J & J Snack Foods Launches New Deferred Compensation Plan

J & J Snack Foods Corp. introduces a new Non-Qualified Deferred Compensation Plan (DCP) for management, directors, and contractors, effective January 2025. Participants can defer portions of their salary, bonuses, and commissions into notional investments, with the option to choose payment in lump sums or installments after separation from service. While the DCP offers investment flexibility, it remains an unfunded and unsecured plan, ensuring participants are general creditors of the company.

J & J Snack Foods Appoints New CFO Shawn Munsell

J & J Snack Foods Corp. has appointed Shawn Munsell as the new Senior Vice President and Chief Financial Officer, effective December 2, 2024, following the retirement of Ken Plunk. With a robust financial background including leadership roles at Calavo Growers and Tyson Foods, Munsell will oversee the company’s financial operations. His compensation package includes a $500,000 base salary, a 75% target bonus, and a $50,000 sign-on bonus, alongside long-term incentives.