JJSF - Earnings call transcript Q2 2024

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Operator

Welcome to the J&J Snack Foods' Fiscal 2024 Second Quarter Conference Call. [Operation Instructions]. Please be advised that today's conference is being recorded.I would now like to hand the conference over to your first speaker today, Norberto Aja, Investor Relations. Please go ahead.

Norberto Aja

Thank you, operator, and good morning, everyone. in Foods' joining Quarter XXXX for Call. Conference you J&J Fiscal Snack Second Thank

in minute of me just and start statements of harbor will We a XXXX. contains call Securities But to the forward-looking doing Litigation language. minute Act This your the with before so, Private a let meaning take within read safe the questions. comments management's Reform

to subsequent even we the as future, so, disclaim expectations Xth, Form statements today.As may date on represent forward-looking from and we other not statements, statements do statements May anticipated the made ended neither Exchange statements September some and or cause Securities and while objectives other cause should future actual the on XX-K forward-looking this from on estimates the relate factors known any do could if in factors point to and all involve or of year statements and implied and obligation statements. that performance Risk cause facts and to matters or materially the with by risks, elect such, promises that results forward-looking plans, indicated As be financial management's And achievements to Commission or annual call by different other differ filings those results, forward-looking results may XXXX. such, our considered including regarding the expectations call, are XXth, this at expressed to materially update important events forward-looking strategies, many achievement unknown items historical uncertainties of this made call guarantees performance.These performance goals, XXXX, to change. in for to management's report statements our in discussed be

certain our press website. near or which can reference measure release, on share, be in found adjusted adjusted including EBITDA, earnings Investor may call measures earnings Relations adjusted GAAP of are our operating In addition, reconciled of income in the the today, also per non-GAAP we all which section

call along with Ken Dan on our me Financial is Chief the Fachner, Joining today Plunk, Chief Officer. our Executive Officer,

remarks, turn now will over call answers.With call Chief the open Dan to and to Food would like please that, J&J Mr. Following go Officer. ahead we the I for Executive ahead. Snack go management's prepared and Dan, questions Fachner,

Ken Plunk

Thank you, growth last sales, ability profits This, results sales. margins net increase I and our for pleased highest combined to quarter, the Dan, with gross contributed year. prior good than quarter record $XXX and totaled growing previous Net including versus morning, everyone. year. sales faster over our for of significant profit deliver strong the with second the an to achieved fiscal am quarter XX% topping the X.X% million,

was added in of handheld the driven by offset X% decrease totaled million, X.X% increased $XX.X customers products soft soft growth increase in prior largest This gross did to the Churroâ€™s consumer increase venue new Churro trends. line our a continued handheld year strong performance X%, XX.X% and Dippinâ€™ the and of Dots note quarter As over volumes segment Growth of income our to Dan across increase and primarily respectively, performance Churros the for Bakery respectively, major and X.X% of by increasing by It reflecting sales. to higher new in sales Novelties top by segment XX.X% placement by was mentioned, customers. than X.X% cookies a the driven operating our increased second an $XXX to growth the of margins. $X.X growth led $XX.X customer sales presold is major Frozen volume addition quarter. the new of to business with important unit that improved addition, Foodservice, million, also period, our volume and million. line to versus top for primarily and a quarter.In approximately driven million as sales momentum, the driven X.X%, a in

XX increase sales sales growth retail of with totaled million segment. to by Moving product as handheld an a mass driven or merchant. $XX.X XX.X% Retail of expanded we major our QX placement XX.X%

Pretzel In inventory increased XX%, addition, of seasons.Biscuit Superpretzel as by Frozen increased the products X.X%, X% our the Dogsters and of for continued by sales retail. summer in Novelties customers as as sales the sales led and Novelties seen higher led well quarter growth Icee shipments peak expansion in saw increased build

the income and Bavarian segment of sticks in gross led introduction prior versus We quarter. reflecting product also an retail of into $X.X This this margin. of benefited in improved the innovation sales, $X largely to of approximately segment. operating or million the million an the $X.X mix new was increase million the result period, the year Superpretzel from product of This

of sales saw growth relates operating maintenance sales growth driven sales sales rollout it lacked of performance. margin million from down reflecting $X.X led trends were to significant beat of by X.X% This maintenance year. volumes. most relatively income channels.Repair segment, consistent by â€™XX a flat, Machine last and customer As customer compared strong led consumer to beverage income Beverages our to and and $X.X by third increased also we across gross call were XX% as QX million, we a Frozen QX, $XX.X consistent X.X%, operating X%, as revenues million sales QX

years efficiency to Our proving margins enhance across last few business our investments and and over are profit successful. initiatives drive be to the

to overall in basis some now or mid-single-digit favorably and like chocolates We year.As and expect relates â€˜XX. in XX.X%, we impact For inflation double-digit gross profit better deflation margins QX to in increases XX.X% improve meats. to from improvement This oils, XXX margins a the however, gross profit totaled in XX% achieve sweeteners, margin materials is gross for to our to plans and in compared in and full confident was stabilized, $XXX.X QX comparing this offset the quarter, XX.X% remain million, and mixers it by to point are led dairy, 'XX. increase to experiencing raw inflation, flower, the sugar of a

costs, team managing and effectively and positioned to well to respond supply is impacts. are Our procurement any we

Looking $XX.X It of operating important in in million the at to distribution opening expenses, of period, cost transition for previously quarter expected the in Total XXXX. the sales to XX.X% related reflecting savings expenses representing by year primarily third QX the the the of costs incurred increased XX.X%, note of driven prior initiative.Distribution is planned distribution of XX.X% our to our costs. complete drive that in we XX.X% $X.X sales million to compared the is onetime we and network expenses. transition recent or Arizona. of quarter, during onetime meaningful Glendale, to the mentioned in cost strategy center This XX.X% quarter compared once costs

chain. and to compared was in XX% to QX.Adjusted increased expect XX% distribution we to net quarter. the million or of efficiency X.X% payroll share for the or XX.X% X.X% compared million expenses on the $XX.X 'XX, and new to supply $XX.X to impact period. network and XX.X% million Administrative effective $X.X in â€˜XX and to licensing an million tax $XX.X fiscal increase by period. primarily income resulting and reported and of $XX.X in operating year per compared of the sales of were an QX management to further QX driven from of QX expenses X.X% across of QX rate the a in This taxes discretionary of $XX.X of period, of brands core led and million $X.XX increased promotional and Adjusted compared compared in fees forward, earnings 'XX. Going earnings in spending. in compared in were increase expenses million earnings income EBITDA benefit in to to from diluted $X.XX increase prior $XX.X tight 'XX operating year share income After in and marketing was were $X.X $X.XX per of to products. million QX prior distribution the Adjusted management X.X% incremental X.X% year sales prior prior our second by initiatives the selling logistics our period, $X.XX improve our Marketing driven to versus quarter support million,

continue liquidity cash stronger and and liquidity position profitability $XX $XX.X down in and million to improve our more initiatives to we our strong dividends working raise business. investing balance debt.Our million a is approximately pay healthy at with and cash, continue sheet ability in cash capital have through in overall position, generating Looking flow debt,

position, continue leverage value to on sheet prudent continue the to investing our shareholders. growth us a and returning will of which and focus Our to enables healthy maintaining our business balance be in

expanding and executing approximately opportunities In profit In addition, $XXX under improving summary, operational and margins efficiencies have in revolver our customers. ample million channels capacity. across borrowing additional are of we strategy, our we availability and growth

our and our channels. performance, second liquidity portfolio position continue position has growth sheet quarter with a Our across and to brand together customer balance robust driving

We you. are shareholders.I plans and over growth to the operator to executing continue to remain now strategy confident in questions the our for answers. our driving would turn to call value and profitable like and our Thank

Operator

[Operator Thank Instructions]. you.

Shakno Blair. question first Our from comes from William David

David Shakno

guys. Anderson. Congrats Two for Shakno on David questions for you quick a nice quarter, is now stepping in guys. This John

First running? you in with center achieved quantify be and that's off, third that now may can the us up help distribution savings Arizona the

Daniel Fachner

third that savings got one to towards David, don't you what if I But Again, want know look place. forward that be. just into might

they're pretty said we consistently of in get or distribution percentage place. the drive believe sales into that those of we've is networks range. XX% And the that so once getting And place, down can we what into X we lower not just distribution

yet, is we next order X to in haven't a the but savings seen to think savings short year. We over come that months that yet

Ken Plunk

and X need You made and collectively at look we've the the those do change of savings RDCs together. work all to

Dan add to what said. to Just

a in I think case out range, in We're give it's take. said this, and and $X as really or integrated together, The think have that. us save next working previous that quarter come will meetings. it see all year confident And that the start about really mentioned. for come million we year business think will percent to Dan QX range all down XX% of under that this that be sales seamless, next starts to when a and more I of be really we'll into bit we

Daniel Fachner

savings customer is network that at helping performing it's how already distribution us then though, that know what about the love excited I the and right Really corner. better around that, serve and it's

David Shakno

you can plans whether that to I something Thinsters But of? I if you or any distribution mentioned know that new you then prepared I'm just wanted acquiring thinking else about to for Thinsters, talk if slip flavors, the know have remarks, one anyway. in other, could you in what And attracted it's that the you produced brand? just not

Daniel Fachner

right? that to brain, really, just have we opportunity us, the already nice tasted honestly, what label, our opportunity about was not did we've much and grow if right, smaller the food brand. the it's really looking And that What a is in today, it, it had bit you it, but been tuck-in be products the it's like just I like, as small. good. attract been so looking there's said and little lot look we're what than acquire, in the like able at, I larger product mentioned retail product a is clean that's really to the but It's out make love for a in a to it, it's I've for But organization. you we've the it's of service well. making. than like And product I just that And something for this general, enjoy that. we it

Operator

from Our Company. Benchmark next Todd Brooks from comes the question

Todd Brooks

Congrats you're quarter and one. eye-opening one softer seasonally typically when to on a everybody really which

So very impressive.

margin second I think seasonality the the to like but to and the margins know, performance in Ken, anchored historical saying is quarter basis clear. XXX improvement? that's me, do were of just pattern we we for you're year. for the and a see seasonal in this that gross based points my on be seems half mind gross the the question XX%, would stronger the First How the bar would normal that around about low

gross second seasonal do half So us in of thinking want the the how performance margin year? the about you

Ken Plunk

facility of production improved costs the and exceptional a where that things, really selling performance year-over-year, our significantly job the We're to Yes, of a Margin efficiencies really are in mix the well. pricing the It's leveraging better across think, quarter. capacity of an got we're gaining calibrated Todd, of Gross I starting work we're categories. was together. it and each lot doing facilities. margin with really product much what

stretches expect or to So go XX I QX, in we to the up all together or that company. really best say XX where full I and led one given better, better. the be years expect working the XX% second margins. the expect really nicely I it of It year. last for the the QX into quarters certainly when margin for We

strong. last to on for If year XX% scale a to QX, year, our translate comparability is than to year remember a execute you to they be this was QX. QX probably I in different last potentially it the were up ought that. can ago this of we QX of doing kind That sales very similar us year, expect year the because

Daniel Fachner

this working, Todd, of organization finance, what we've of model. had operations, keenly see that's and we're the conversations we've quarter. those And from transforming here areas to and saw a margin that sales the gross nice it's it been we is really focused lot what about to and really at doing one on

Todd Brooks

basis, lines that producing horizon operating on that of cross-selling. kind the invested products with gross success is are you as you longer-term the the this the Dan, new X-year vision of of that X- in guys profile last What thinking longer-term in for the business higher-margin year about margin guys a On to model? with you're kind of

Daniel Fachner

to said, believe Well, that at see we've mid-XXs we I And would grow to absolutely point that margin, right? that can love range. continue some as us in we somewhere

the right? working. are The think we're all things, the pieces new doing plant. lines focused right The on I in are teams

face Our understanding than teams and have they pricing well. come that finance alongside as before. sales group better is help ever The

to knew to and get XX we as the hopeful, over it in I milestone next next X And could we years. so is, what love the said, that that to be we've X mid-XXs would we're

Ken Plunk

that spread be seasonality Dots. Todd, for I the think, wins a we mentioned, script, towards Dan can will to down margins that spread big the gross yearly in in Dippinâ€™ keys one coming out of to of we basis. number that sells a on in his and QX that the even to mentioned out are road then X starts that our business build year, theaters. of If in fiscal stronger And

Todd Brooks

And quarter I here. that loosely and about been the you But talked were can about in performance when through through what the may in the spike you costs we overall quarter? the last Ken, can was you in terms commodities wins living the talk have you hedged basket us, of think losses year quarter. sugar in late remind second

and outlook commodities in So just wondering for that half of then back you forward the the second have quarter reality the the commodity-wise year?

Ken Plunk

of things say to Yes, of is I doing couldn't enough organization It's positive around in good place, it's was some few about what our managed well. ahead think down, with I position double those a we X%, leverage procurement in things X.X% were to months contracts X we come ago. other a next these digits get and months are but us, prices that against are the in where for as

So we're into to react able we're prices, locked that. and not to old

chocolate. done commodity We've in challenge and chocolate, which supply ingredient good The is biggest cost increases, many But on good is about half us of that position probably we about job good well where others decreases our and use it contracts we there. that the So is a built managed. to that lock customer. there the for feel into pass on news of have

and deflation. slightly on a inflate in of terms you If probably QX, net were basis, favorable at we look

focusing look we As what do. inflation outward, on minus in it's really

little the $X.X numbers on I than that, that bit don't latest CPI more put anytime down sees total in I We'll inflation the think probably anybody million. you know soon. better X saw to about X.X%. getting are a

net-net, -- we project as shape but good X% and forward, to in see I X.X% ourselves. we of need out, we're lock the may inflation if look where to to for be around So, to we say, had protect in

Daniel Fachner

I'm really team that doing. of what is proud

and leading company. We a better. that it's better lead to job Another little area in needed tremendous get over get group ways us helping or procurement we where we're that ago, about really the just transforming a a a doing in year brought and

Operator

comes Connor Our Rattigan Consumer edge. from next from question

Connor Rattigan

on a Congrats great quarter.

top X just the that guess mid-single-digit how line? in about about we there inventory thinking these maybe total, And line business items details any And much pull all to guess also just maybe on new of I onetime drive runs build? that was called Ken, or that maybe I was were thinking much So that sale quarter. you to a out, I that back referring to forward should inventory in curious start with the top the build like guys how turning growth. maybe and other

Ken Plunk

Novelties months particularly I benefited and in being saw areas think of the about this forward up, kind back think Frozen second where of inventory. a effect, look us. of in the we people winter dialing lot QX, in to of summer, during Connor, which bit we as like talked that little spring the And thereâ€™s opposite quarter, trued I

We also the really, growth improving and in our metrics benefits saw done, like those nice in [Indiscernible] with well. that we've of Novelties, Dogsters some about as and in were of talked Novelties, paying. all this, time work were Dan and some changes the full Frozen stocking on And and Icee we reduce really

because that those benefited in as that were year. that the So were prior we taking deductions number sales well

areas there's as quarter. customers think kind combination and and and consumer some but improvement lot have of in working mean improve. it's the retailers been a that things signal I some there. summer out stretched, And worked anticipation of hopefully, are that a is that and a what see spring that bit an I they'll getting and of I may in know many QX QX of then outlook and buying for entertainment that the of it's kind So relates to people well a the it well see our the

travel the on pretty I based something strong is I fact, outlook read this morning. on know In

So things it's quarter. us a of combination in benefited the those that

Connor Rattigan

of it I if other pretty And down? of the do that heard same changed. guys called be end? you know some commentary. seeing a traffic what also quarter, reports this substantially numerous you guess are sort was And I in We've that on sort vein. the your widespread you So what X the appears slowdown but in think to And last absence out still traffic. foodservice in is in guess quarter's not, I there

Daniel Fachner

with nearly call right? that see as over environment we're closely. was quarter, great consumers, we in years, it of We really as or us, the customers. past One, we've we tickle strong of and an product. as waters QX didn't much experiential had we're QX. that is interesting right? like But a did X in quarter have a We kind I product we toppy certainly an a it, kind said almost think watching that for

a of to the watch to when you so And or consumer on might ordinary. cut or of basket, it the I'd And buy comes bit to back the churro closely. treat a often, you might a if reward get it consumer. the still out our keenly We some store but aware. or a way something at teams going call of you softy again, react We'll might waters get little [Indiscernible] had downturn, you grocery it We're home might are good a in a just really the quarter. kind Pretzel but see ice or we

Connor Rattigan

all accomplishment. long-running RBC, assets, of congrats getting the and X a up they on have those So, on running

growing that remaining little that mentioned guess, on only X noticed get the excess you product get of distilling margin system. kind is second that that bit to of distribution I just maybe So that to guess you the a that is number? kind sustaining are fast kind to just that through toggle you so take through down of I going guyâ€™s about capacity? XX%. you Or longer one to and of I XX%

Daniel Fachner

next we're shut done, will other RDCs, to Florida the need we that an our Well, see that fine-tuned the down, job. said is down still when but you right than get The one own, have now. And But we to use to that some try need we'll numbers has the team some a we board. of done one it's one that continue working additional XPLs more use in step those not and of we capacity down X we just months. on those X to things market. that over in the almost tremendous we RBC X it can all But probably across

Ken Plunk

X The move still use kind with regionally of just be we'll located. a XPL, whether it's even product this new structure, reminder, facilities and to there'll out, that X maybe in a to

not move little probably from were few other that X. necessarily still facilities we going bit build just just we also. will There it's as well. where need But a higher a So XX% as forward

Operator

from Our Wolf comes next question from Andrew King. CL

Andrew Paul Wolf

impressive has as mix, mix, us communicated how everyone pointing price, did you out also gross which listed much and to Congratulations about But how net margin. often wanted either Could or release you revisit first on Quite think price of there to the don't ask if the been in out. contributor. everything. price tell gross in was the that. on it I it's -- guys means biggest you I I call know was

a volume. So sense get just like I'd of that versus to maybe

Ken Plunk

clear, positive can One, each Well, of segments few had see I the be if a I want in volume to that let ways. X me answer growth.

with X taking Dots, took the with So more And the of exception in we've Dippinâ€™ up IC. business the is take all Pricing January other of one the units were that in we been areas. January think pricing with pricing we in surgical. I

We've surgical with a chocolate. we're to some having wholesale. sugars So few nothing and done do things with

probably a as really much through combination a of for So it, is tell in really about in production the we've can margins quarter, think of drive just bakery of it we when this. is is kind business margin with Churro the out, improve also as really don't Andrew, I starting put on done lot efficiencies driving bakery you that facilities of I that have benefits say as to all kind the to improving I new items.Some our you broken of or We've way. could margins it's have automation The as when much above. really walk that we good in the us. for

So sales grow, we're working it's reported whether operations, all would we and the whether products is it's finally nicely quarter. really together us where we initiatives procurement, how we've that to just management to margins margin manage to this it's and point that these getting the had, whether and get the mix

Andrew Paul Wolf

I us you mid it a to subway. because kind started I about rate How started, do should should think looks to there million like how understated of at rate? just in about is wanted bunch a we a we heavy And just of subway ask can run as guess, the number sort so $X for sales trial? run was Or on, January. going It you -- or called out quarter. that And gave maybe how -- late think that like, forward? they observation, in advertising announced of the least pretty later from think you my

Daniel Fachner

sure. it's Well, for piece great of new a us, for business Andrew,

dialing out what in ways. kind be positioning X to other for tiers to that they're been able and the We've in And that struggled in even areas of new turn a some we've them we've the in of couple keep tier an the of we're at with Churro foreseeing Churro of think bottom foot-long with the at and There's great. us that, which opportunity where able The need to, them. is had. might I to stock of lines pricing, means that that. still the because on been where we're even to

we in. with them positioning exact opportunities I customer, So still don't you number be with that I they're that know love think particular and have but that able that even. internationally we an we dialing some to the we'd believe have guide

Andrew Paul Wolf

Congrats again.

Operator

Our next from Dickerson Jefferies. from question Robert comes

Robert Dickerson

a said lot doing you is Dan, today, great. business our

merchant food indulgent of I lot So of about restaurants, some at has the have, brought congrats about like positioning products you're time, I lot same said. still subway are comments charts like talking business that was kind runway lot on Dots off everyone remarks remarks, & pressure affordable, your saying like this prepared treat mass right? that, et you sounds you Busters, spoken before, the comes Like portfolio of new made even a of Dave to like and it service heard before of But in as a a up these new question half little growth through frankly, guess Handheld, prepared else kind I've cetera. with, year. you've say of has in are the there the business, the up, companies frankly, a to the the Dippin' nice back we

I'm a you clearly other new business. And then as the we're haven't the could business would demand to wins also, â€œYes, in like in your like, curious, yes, just product like that portfolio little better. given seen as you I'm characterize talk and this a self doing So retailers, retailers curious, But in market our parts. broadly be softer different saying, like these really we

of to also all to absolutely, of then potential. I'm better and business in navigate kind So kind combine why like that new upside doing our it's with this blast out trying C-stores.â€ going we're just it

Daniel Fachner

is enough indulgent diversified that, we're and an you nose, a business our and think on treat one, are we reward. do the though, I hit

it's I'm And really that the the which well. innovation the kind we've X to of and then come business, so, really bring that here new products to proud that team selling releasing new And that that have and really work years so of the I the the of products we're to into are I hear the with team. all consumer an are got don't things we products several a is the to that I'm We're of of as I is happen that deal in are opportunities on. sitting and on. way that marketing team And with at working and even fortunate today, that not think easy as concern. sites, innovation. be within The with even soft some sales it growing team love strategy out some bringing driving think happening questions, we and is not can is they able our is We're and thing that's ways. other our naive out the have we Ken sales seeing the those leg proud It's to or one play. would But sales we been having working here because part are been times make you new impacted experiential the people if of for hard brought drive together. what areas and the what And last cross-selling you really it and happen, it's about something indulgent more at it. there not is get are excuse I are us there. J&J. treats talked it's into that that's really could continue back of to stable customers soft but that doing make are organization. And that being cutting I that really another third they're laying over to going out

Robert Dickerson

around guess I a the landscape. demand question of then just follow-up And kind

the normally entering, what year. of part let's consider are You kind say, we your of almost entered best

traffic opened. the seems of amusement still It movie a bit little Some have light. parts like may already be

you respect same I kind we with say got as dynamics good. like the Seems pretty few sit that ask and that think of like of of year? I every business? set, Would guess, fairly you like months April. to Can the ask next kind be to every amusement year, I you parts So today, other to where the I in landscape kind as question forward

Daniel Fachner

well, these plays big of of months I part get weather course, it. think into we're X and really positioned a you

expecting are talked about to that overall, released. But in now. soft our XXXX. us, we be shine quarter fourth that of I and the and more as so. start We're there can get come to that on the mean or people gods year you affect quarter hadn't the expect in But and forecasting of of we good or long little kind to later-half they're movies that parks, movie new first back builds movie the bit, park season. time the investing as have back right it XX% down right weather group. us to been of movies saw fiscal did is that we strike, the strike year. and place, have the before people you get in We're it a on if industry that industry done kind in to we're willing kind out a So to because the the The amusement the has softer out movies in last like come when investing the pretty year movie a But industry industry the Barbenheimer

a some And Dots there so I But with months. position as growth the good go think our we're good summer Dippinâ€™ we're in into core brand. seeing we

Operator

will Dan I it now this am further at remarks. turn time. questions for to I over showing no Fachner closing

Daniel Fachner

I that, everybody's much. Great. very appreciate appreciate I you and questions Thank today.

operations. to remain we focused average improve our grow ahead, to core looking So opportunities overall and brands investing further capabilities our on strategy, business our maximizing our resources executing including in and while our new sale

to partners to us Investor value very second the monitoring any please closely the are to firm, to us, build Relations excited inflationary of expect XXXX XXX-XXXX. trends, questions remain we Thank consumer long-term fiscal While employees, (XXX) you contact speak you we and about and wish opportunities should JCIR, our ahead of deliver many our at In interim, half momentum through much. to shareholders. and the have or

Operator

participation for does your conference. conclude you This the program. today's Thank in

You may now disconnect.

J&J Snack Foods (JJSF) 7 May 242024 Q2 Earnings call transcript