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J & J Snack Foods (JJSF)
NASDAQ:JJSF

J & J Snack Foods (JJSF) AI Stock Analysis

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J & J Snack Foods

(NASDAQ:JJSF)

Rating:58Neutral
Price Target:
$121.00
▲(3.40%Upside)
J & J Snack Foods' stock is currently under pressure due to challenging financial performance, highlighted by declining profitability margins and unfavorable technical indicators. The stock's valuation appears stretched, though the dividend yield offers some compensation. While the company is optimistic about future improvements, the current earnings call highlights significant headwinds, particularly in specific segments and due to input cost inflation.
Positive Factors
Box Office Growth
A stronger movie release slate and good performance of the Minecraft movie have increased management's confidence in box office growth, impacting segment sales positively.
Management Confidence
Management reaffirmed the positive fundamentals discussed on the company’s fiscal second-quarter conference call.
Share Repurchase Program
JJSF announced a $50M 2-year share repurchase program, reflecting management's confidence in the company's current valuation and return potential for shareholders.
Negative Factors
Commodity Cost Inflation
Key commodities like flour, packaging, and chocolate are sources of inflationary pressure and could impact margins further.
Revenue Shortfall
Revenues of $226M were below consensus, impacting earnings and indicating weaker than expected performance.
Theatre Channel Weakness
The theatre channel weakness is a main driver of a $7M reduction in revenue estimates, contributing to expense deleverage and gross margin pressure.

J & J Snack Foods (JJSF) vs. SPDR S&P 500 ETF (SPY)

J & J Snack Foods Business Overview & Revenue Model

Company DescriptionJ&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 MoneyJ & J Snack Foods generates revenue through the manufacture and sale of its wide array of snack foods and beverages designed for both consumer and food service markets. The company's key revenue streams include the food service segment, where it provides products to restaurants, stadiums, schools, and other institutional clients, and the retail segment, which sells products directly to consumers through supermarkets and convenience stores. Additionally, the frozen beverage segment contributes significantly to its earnings, with ICEE and other branded frozen drinks being popular offerings. Strategic partnerships with large foodservice operators and retailers also play a crucial role in the company's distribution network, enhancing its market reach and contributing to sustained revenue growth.

J & J Snack Foods Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q2-2025)
|
% Change Since: -11.24%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Negative
The earnings call highlighted some positive developments such as retail sales growth, market share improvements, and new product innovations. However, these were overshadowed by significant challenges including a decline in overall revenue, gross margin reduction, and weaknesses in the theater and foodservice channels, notably in churro and pretzel sales. Input cost inflation, particularly chocolate, further strained profitability. Despite optimism for a stronger second half, the current quarter's performance reflects significant headwinds.
Q2-2025 Updates
Positive Updates
Retail Sales Growth
Retail sales grew 1.8% in the quarter, with a notable 14.7% growth in frozen novelties, led by the DOGSTERS brand and the successful launch of Dippin' Dots Sundaes.
Dippin' Dots Expansion
Dippin' Dots increased theater presence by over 30% since fiscal '24 and added a significant new customer, Urban Air, expected to become the largest single customer.
New Product Innovations
Introduction of a high-protein pretzel and enhancements to frozen novelties with better-for-you attributes like electrolytes, antioxidants, and probiotics.
Market Share Improvement
J&J Snack Foods improved market share by 1.4 points and by 4.4 points within Bavarian pretzels.
Negative Updates
Revenue Decline
Total net sales for the fiscal second quarter declined 1% to $356.1 million, primarily due to lower sales in Frozen Beverage and Foodservice segments.
Gross Margin Reduction
Gross margin declined by 320 basis points to 26.9% from 30.1% due to lower beverage volumes, foreign exchange impacts, and continued input cost inflation.
Theater Channel Weakness
North American box office sales declined by an estimated 10%, impacting the Frozen Beverage segment with a 7.1% decline in beverage sales.
Churro Sales Decrease
Foodservice sales declined 1.7%, driven by an 18.7% drop in churro sales due to the loss of a limited-time-offer with a major QSR.
Chocolate Cost Inflation
Continued input cost inflation, especially related to chocolate, impacted the bakery business and contributed to margin compression.
Pretzel Sales Decline
Pretzel sales decreased by 7.9%, partly due to theater channel weakness and general market softness in the pretzel category.
Company Guidance
During the J&J Snack Foods fiscal 2025 second quarter conference call, the company reported a 1% decline in total net sales to $356.1 million compared to the previous year. This was primarily due to decreased sales in the Frozen Beverage and Foodservice segments, which were offset slightly by a 1.8% increase in retail sales. Gross margin fell by 320 basis points to 26.9%, and the adjusted EBITDA was $26.2 million. The adjusted earnings per share (EPS) was $0.35. Key factors impacting performance included a 10% decline in North American box office sales, foreign exchange headwinds, and input cost inflation, particularly in chocolate. Despite these challenges, the company anticipates improvements in the second half of the year, driven by a projected 30% increase in theater industry sales, strategic pricing actions, and product innovations.

J & J Snack Foods Financial Statement Overview

Summary
J & J Snack Foods demonstrates solid financial performance with consistent revenue growth and strong balance sheet stability. The company maintains healthy cash flow generation, although profitability margins have slightly declined. Continued attention to margin preservation and cash flow management will be crucial.
Income Statement
78
Positive
J & J Snack Foods has shown a consistent increase in total revenue over the years, with a revenue growth rate of approximately 1% in TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin is solid at about 29.8% for TTM, indicating efficient cost management. However, the net profit margin has decreased from 5.5% in 2024 to 4.8% in TTM, highlighting a slight decline in profitability. EBIT and EBITDA margins have also seen a slight decrease, suggesting pressure on operating profitability.
Balance Sheet
75
Positive
The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.18 in TTM, indicating conservative leverage and financial stability. The equity ratio remains strong at around 68.9%, showcasing a robust asset base backed by equity. Return on equity (ROE) has decreased slightly to 8.1% in TTM from 9% in the previous year, reflecting a modest decline in profitability relative to equity.
Cash Flow
72
Positive
Cash flow from operations has remained relatively stable, supporting the company's liquidity position. The operating cash flow to net income ratio is strong at 2.1 in TTM, indicating effective cash generation relative to earnings. However, free cash flow has decreased by 16.2% in TTM due to increased capital expenditures, which could be a potential concern if it continues.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.59B1.57B1.56B1.38B1.14B1.02B
Gross Profit
472.90M486.13M469.87M369.64M298.93M238.43M
EBIT
102.22M117.55M109.52M61.80M71.22M23.58M
EBITDA
158.83M191.37M174.34M119.03M121.88M74.58M
Net Income Common Stockholders
75.91M86.55M78.91M47.23M55.61M18.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
233.92M73.39M49.58M39.19M291.17M246.96M
Total Assets
1.09B1.37B1.28B1.22B1.12B1.06B
Total Debt
68.03M160.50M121.91M111.56M60.53M61.58M
Net Debt
-102.30M87.11M72.33M76.38M-222.67M-134.23M
Total Liabilities
250.51M408.13M365.72M353.80M276.56M247.06M
Stockholders Equity
842.52M956.97M911.52M863.17M845.65M809.50M
Cash FlowFree Cash Flow
83.37M99.50M67.54M-61.23M47.92M34.33M
Operating Cash Flow
158.84M173.07M172.28M26.06M101.50M92.14M
Investing Cash Flow
-79.10M-77.67M-93.24M-296.17M9.94M-44.46M
Financing Cash Flow
-68.94M-68.37M-66.84M22.22M-24.67M-43.46M

J & J Snack Foods Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price117.02
Price Trends
50DMA
123.75
Negative
100DMA
127.68
Negative
200DMA
145.85
Negative
Market Momentum
MACD
-1.84
Negative
RSI
48.26
Neutral
STOCH
83.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JJSF, the sentiment is Neutral. The current price of 117.02 is above the 20-day moving average (MA) of 114.98, below the 50-day MA of 123.75, and below the 200-day MA of 145.85, indicating a neutral trend. The MACD of -1.84 indicates Negative momentum. The RSI at 48.26 is Neutral, neither overbought nor oversold. The STOCH value of 83.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JJSF.

J & J Snack Foods Risk Analysis

J & J Snack Foods disclosed 24 risk factors in its most recent earnings report. J & J Snack Foods reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

J & J Snack Foods Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$3.43B23.698.40%11.47%2.59%
66
Neutral
$2.66B11.448.59%3.68%-0.24%26.74%
FLFLO
65
Neutral
$3.53B15.5416.34%5.73%-1.02%81.53%
65
Neutral
$8.88B15.034.75%203.74%3.58%-2.49%
UTUTZ
61
Neutral
$1.92B42.423.93%1.72%-1.29%
58
Neutral
$2.28B30.068.20%2.59%0.49%-12.32%
KLKLG
52
Neutral
$1.38B24.8417.70%4.08%-3.13%-51.41%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JJSF
J & J Snack Foods
117.02
-47.43
-28.84%
FLO
Flowers Foods
16.79
-4.76
-22.09%
SMPL
The Simply Good Foods Company
33.97
-2.78
-7.56%
NOMD
Nomad Foods
17.34
0.79
4.77%
UTZ
UTZ Brands
13.55
-4.46
-24.76%
KLG
WK Kellogg Co
16.02
-1.36
-7.83%

J & J Snack Foods Corporate Events

Business Operations and Strategy
J & J Snack Foods Launches New Deferred Compensation Plan
Neutral
Nov 21, 2024

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.

Executive/Board Changes
J & J Snack Foods Appoints New CFO Shawn Munsell
Neutral
Nov 21, 2024

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.