John B. Sanfilippo & Son, Inc. Announces Fiscal 2025 Q2 Financial Results
John B. Sanfilippo & Son, Inc. (JBSS), a leading manufacturer of snack nuts and nut-related products, has reported its financial results for the second quarter of fiscal year 2025, which ended on December 26, 2024. The Company delivered impressive sales growth, with significant increases in both volume and revenue, despite facing challenges related to pricing pressures and higher commodity acquisition costs.
Second Quarter Highlights
- Net Sales: $301.1 million, an increase of $9.8 million, or 3.4%, compared to the same quarter last year.
- Sales Volume: Increased by 6.4 million pounds, or 7.1%, reaching a total of 96.3 million pounds sold.
- Gross Profit: Declined by 9.8%, totaling $52.3 million.
- Diluted Earnings Per Share (EPS): Dropped by 29.3%, to $1.16 per share.
CEO’s Comments
Jeffrey T. Sanfilippo, the CEO of the Company, expressed satisfaction with the strong growth in sales volume and revenue, which marked a new record for quarterly performance. He emphasized that the second quarter results represented the largest sales volume and net sales in the Company’s history, reflecting the successful execution of its Long-Range Plan. Sanfilippo also highlighted the robust performance of the Company’s bars division, which saw a significant 28% increase in sales volume compared to the previous year. Despite the challenges posed by competitive pricing pressures and higher costs, Sanfilippo conveyed optimism about the Company’s strategy for growth, operational efficiency, and profitability optimization.
Sales Performance by Distribution Channel
- Consumer Distribution Channel: Sales volume increased by 2.9%. This was primarily driven by a strong 27.6% growth in bar sales due to Announces mass merchandising retailers returning to normalized inventory levels. Despite this, sales volume was partially impacted by reduced demand for peanut butter and smaller pack sizes, especially at a major retailer.
- Private Brand: Saw a 4.0% increase in sales volume, attributed to growth in the sales of tree nuts, including pecans and walnuts, along with trail mixes. A decline in consumer demand and smaller pack sizes partially offset the gains.
- Branded Sales: Fisher recipe nuts experienced a 3.8% increase in sales volume, driven by increased merchandising activity. Southern Style Announces Nuts had a remarkable 11.8% sales volume increase, benefiting from improved sales velocity and return to normal inventory levels at certain retail customers.
- Commercial Ingredients Distribution Channel: This channel saw a more modest increase of 1.4%, driven mainly by higher sales of peanut crushing stock, which are used by peanut oil processors, and new distribution to a food service customer.
- Contract Manufacturing Distribution Channel: The contract manufacturing division saw the most substantial growth, increasing by 55.6%. This increase Announces was fueled by higher granola volumes processed at the Company’s Lakeville, Minnesota facility. However, this growth was partially offset by decreased sales volumes in peanuts and cashews due to lower consumer demand.
Impact on Gross Profit and Margin
While JBSS posted strong sales volume, the gross profit for the second quarter decreased by $5.7 million to $52.3 million. The decrease Announces in profitability was mainly attributed to lower selling prices due to competitive pressures, along with higher acquisition costs for most tree nuts. However, the improved profitability of bars, driven by the integration of snack bar assets acquired in the previous year, partially mitigated this decline.
As a result, the gross profit margin dropped from 19.9% to 17.4% of net sales, reflecting the combined effects of the pricing challenges and commodity cost increases.
Operating Expenses and Inventory Management
Total operating expenses for the second quarter increased by $2.5 million. This was primarily due to the non-recurrence of a $2.2 million Announces gain from Announces a bargain purchase during the Lakeville Acquisition in the prior year. The increase in operating expenses also reflected higher freight, rent, and compensation expenses, although these were largely offset by reductions in incentive compensation, consulting, and marketing expenditures.
In terms of inventory, the Company reported an $8.5 million increase in the value of total inventories, a 4.3% rise. This increase Announces was largely driven by higher Announces acquisition costs for tree nuts and chocolate and increased quantities of almonds and cashews. These increases were partially offset by a reduction in inventory related to bars.
The weighted average cost per pound of raw nut and dried fruit input stock on hand increased by 33.7% compared to the previous year, reflecting higher commodity acquisition costs, especially for tree nuts.
Six-Month Performance
For the first half of fiscal year 2025, JBSS saw net sales increase by 9.9%, totaling $577.3 million. Excluding the impact of the Lakeville Acquisition, net sales grew by 2.2%, reaching $536.8 million. The sales volume increased by 14.9% across all distribution channels, largely driven by the Lakeville Acquisition’s effect on the first quarter results.
However, gross profit margin for the first six months decreased by 4.8% to 17.1% of net sales, mainly due to lower selling prices and increased commodity costs, which were partially offset by improved profitability in the bars category.
Operating expenses remained largely unchanged, totaling $62.4 million, while diluted EPS for the first six months dropped by 31.4%, to $2.16 per share.
