JJSF - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the J&J Snack Foods fiscal 2024 Fourth Quarter Conference Call. [Operator Instructions].

As a reminder, this call may be I would now like to turn the call over to Norberto Aja, Investor Relations. Please go ahead.

Norberto Aja

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

let a me the started, getting Before take language. safe minute harbor read to

This neither are of made other statements statements or These strategies, on may statements. of performance. any financial call that anticipated performance achievements statements the unknown Reform statements to and our involve including future relate and regarding uncertainties of cause achievements should this call or goals, to be forward-looking and from not objectives expressed Securities important forward-looking matters promises Act statements known plans, materially or Private as facts as guarantees that different expectations or be results, Litigation the meaning All XXXX. results, implied risks, do contains forward-looking historical performance management's well the factors and within by considered

our statements the and on to filings could forward-looking factors discussed report those XXXX. date management's and the Exchange Form and cause XXXX, as the materially XX, annual on the September Commission, actual for in XX-K our such from the statements indicated estimates ended Securities of items other by with today. Risk other represent November today, differ XX, call of forward-looking call results Any made year

expectations any elect update change. disclaim so may to obligation point events to we forward-looking to future, do cause we if in While statements at the some even subsequent

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

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

Please go the over management's like ahead, now session. Fachner. a the to to that, call turn will remarks, we question-and-answer for Following I Mr. prepared call open With would Dan.

Daniel Fachner

year Good and J&J Thank line for record not in thank and us set also growth Norberto. financial highs of fiscal metrics margin Adjusted achieved faster in profit gross top everyone, And improved morning, and than We gross of you delivering rates, joining and another bottom only XXXX. our we sales annual today. you, goals EBITDA achieved chain Foods Snack improving increased achieved supply growing new for EBITDA. XXXX. but profits fiscal adjusted sales. XX.X%

and and in including More and results consumer economic importantly, traffic a channels, these achieved retail. that key were restaurant theaters, convenience, spending during impacted dynamic environment amusement,

continue I'm execute to by our growth. profitable product a Despite new proud grow on of a strategy consumer and continued customer positions core long-term well-aligned basis, on J&J so we to for year-over-year sales that led employees who of brands, spending, pressures incremental wins. placements innovation products, continue

As to we and important performance, an XXXX. XXXX had we fiscal that in of one This remember discussed compared it fourth by fiscal quarter our week impacted sales $XX million. estimated days less is selling to

apples-to-apples to discussions as comparison. explain a we what We is to normalized accurate sales refer it feel today more our will in better

adjusted full XXX in results year, led EBITDA, X% in year. the normalized an sales improvement X.X% and the a I'm margins basis For by basis. with a point we XX proud basis growth adjusted our EBITDA comparing XX.X%, on grew points basis. double-digit for reported margins of on especially improvement to along in a gross

sales fourth Reported decreased our quarter results. at Looking X.X%.

X.X%. sales normalized However, on a basis, increased

inefficiencies and we across plants soft the gross consumer margin quarter, frozen days and including distribution Softer centers. our levels a sales pretzels, higher-margin novelties adjusted with Dots. as Dippin' impacted favorable resulted our selling production products created fewer in trends, and beverages, during and frozen mix along churros, This of inventory less

and XX.X% as with importance will the consistent decreased Despite I'd these XXX margin quarter respectively. net to well, with of detail a fourth our achieving quarter year. decreased performance the XXXX, few to it basis of strategy record sales fourth X%, a points to operating while X.X% and the over fiscal compared operating financial our improving and emphasize we percentage expenses year review aligns challenges our a As last the results EBITDA and of gross and X.X% income and points earnings by XXX just the adjusted year. our in and Ken result, in in for more fourth fiscal how like quarter previous basis quarter, the minutes. for of managed

segments key profitability. and on focused a cross-selling short-term positioned remains core as and critical we our as growing even relentlessly is and channels. as during placement of expanded consumer incremental element of in softness quarter, traffic Each brands of attendance layers in of drive sales Our to products This incremental growth driving trends J&J executing our sales. our decline creating many continue challenged strategy our team growth that opportunities it strategy and periods improve, we well on across are consumer new

on consider ability channels We both that expect frozen growth. three quarter, results reported sales bakery in term Foodservice, In key churros, This they we continue will into a reported experience are and X.X% in grew novelties, to a do on normalized basis. fiscal why included fourth the to year challenges softness our growth the X.X% confident driving focus on review and in with Let's and for and did not a be basis. continue segments year's of fiscal but in these nature XXXX. the normalized short and consumer handhelds our

Dippin' theater sales business. novelty our stronger was the normalized performance in basis sales traffic in in amusement convenience frozen for are the channel were on as a attendance prior in and a fourth third quarter despite delivering after normalized for the our year more Dots and grew by locations Dippin' channels. in which amusement offset for new low digits on and and key year sales core Dots. convenience, declines with grew venues This pronounced start Frozen the quarter. basis both reported novelty sales me Let single

placements driven to in theaters together it relates core and in remain indoor expectations our Dippin' channels. improve added growth optimistic the with As Dots, will amusement that our we business by with opportunities,

is XXX under in in add we expect the XXX in fiscal just second of and theaters our and Dots XXXX, to of the as another currently locations locations end fiscal Dippin' quarter XXX quarter. first

our in and Dippin' will We of available is Marcus Dots sales have Dots partners some then Regal that is theater Dippin' and exceeding chains, AMC, feedback theater novelties. X Cinemark, the of early from the frozen other largest

Dippin' and Dave-&-Buster's We all Dots event locations. are out made in rolling

fiscal rollout XXX roughly We expect within first locations. this across to be quarter our completed

in We add Dots leverage growth. and Dippin' new business continue we'll packaging expand placement significant the and opportunities and drive have flavors to to innovation to

to a in customer the our earlier continue growth opportunities. and addition customer. major business be for for Taking launched a at look the this Sales long-term the in full year. year QSR growth opportunities by Churos, of confident performance other with provides was we This led growth

about Looking opportunity we chain. Fries successfully Churo national are expectations. forward, launch LTO, leading a it hamburger with new to exceeded This excited and recent a a was introduced in product

business us the grow a confidence continue our provides steps with two customers. We're on this business. with LTOs working lot working major There's next opportunities. with Churo are additional our to QSR added in that and on new on ability We customer going also with to

in both expanded of had bakery Moving the business, led with cookies We and new a year by growth to strong current bakery. customers.

consumer the team for Our Shifting in that pretzels. the production market share expanded improve declined plan was new these theaters, convenience, year, softness soft channels. key as However, the industry. within Sales incremental entire to well our restaurant well-thought-out for throughout contract in XXXX continue channels. to positioned opportunities. has and products growth by amusement in bakery grow We growth continue we a pronounced to This includes driving remain and the trends capacity, manufacturing market driven

sectors placements Recently, bites Bavarian we incremental all gained the service of pretzel industry. of food across

opportunities to new with continue Soft of core innovations like improving Pretzel channel Bavarian Pretzel pretzels, incremental Browhouse business. will performance and sticks our along Bites through We for expectations and the drive

was and expand across year. customer segment. primarily This as their growth reported our dogs, the by Moving pretzel to portfolio. mini X.X% our X.X% fiscal retail Bavarian sales continued sales of and a continues We to normalized SUPERPRETZEL placements grew expansion driven for major

before about great leveraging as cross-selling across creates being channels our customer incremental have business a and example great opportunities. this of where brands We talked

we'll We have growth building invested this marketing and across dollars continue brand retail this in XXXX. and trade to funds drive

ACV over pretzel Soft by mini of sticks. Bavarian super pretzel grew X expansion and points, pretzel driven dogs

in softness are despite Our short-term the quarter. retail soft the recent pretzel positioned fourth products well in sector,

into enter expect distribution expansion segment and brands Browhouse Super forward, as our launch will the retail. premium we across Amiens pretzel and we Looking pretzel brand our

Let's talk novelty in about retail. Frozen sales

by driven both on normalized overall and category. in was declining quarter, and year primarily Luigi softer decline the declined the basis. both sales For Italianized the an This reported in sales

enhanced are teams and product on Our sales in marketing marketing XXXX improving and performance through programs, focused consumer Louise's incremental opportunities. and customer positioning improved

Our Dogsters points in continues quarter over almost ACV perform brand growing X the to of well, adding and XX% expansion.

growing to products. continue We for this the opportunities demand brand, leveraging build see pet to

in excited bringing grow fiscal handheld a confident remain continue and new in we're Dots the product to about we business retail Also, category We XXXX. in our this really Dippin' to retail. merchant. growth major the with strong normalized a and over and reported by for placements Sales This both us, incremental mass a for basis. grew led year is on business XX% market a

on increased throughout Sales a a declines convenience reported basis Frozen our the for The our team and the theater and discuss let's X.X% in IT normalized business most Finally, of grew year. basis X% segment. year. on despite volume this Beverage channels

in Sonic see increased strike our in fiscal improvements and slate an We movie improving Wicked, strong X.X% as expects was movie The Hedgehog prior the first theater both increased of our in consumption. market. continuing Theaters, of largest reported Repair releases XXXX. franchise and QX, especially and normalized the the week fiscal theater on part throughout year. with as compared basis, the September July for In On solid the movie sales extra Frozen ICEE as such releases. maintenance the trends and X. volume in customers, X and theater talking channel the to quality titles the lapping and the industry and the concession strong slate beverage significant X% did, a year, We basis a quarter active impacted in hit starting with Gladiator equipment channel films a improvement and XXXX down with see in an the however, even reported year sales significant for business of

of We business of by categories, continue ICEE portfolio. customer led both placements incremental service these and machines, to our expanded grow across

And emphasize to Enhancements We cross-selling moment brands and to impact operational opportunities manufacturing the the continue expand a our are past business ICEE prospects are the to efficiency deliver back, we to results. strategies and products core In few for sales innovation of I'd like well. are placements the will theater excited and to confident in years. short, as key as ICEE. notable leverage about comes over of to leading positive to our metrics. capabilities our take investments improvements distribution our

last planned, initiatives, our average network. and snack versus efficiencies new chain now creating quarter the and decreasing pound of Linehaul ago. compared over year our ago, Today, are the anchored sales decreased facilities orders on-time XX% RDCs XX% how XX% to supply to year out customers. business. are to we by versus performance Our length the working our cold adding per from shipped simplifying operate and improving our a logistics over new We year network capacity XX% a three storage of the products distribution cost by food haul the across new X under as same move in XX% with management

mention I to position in ever on shortly. confirm centers to search, more rates XX.X%. and to leading effectively operations. a along distribution far service improved to streamlined and our lines Notably, before. than Shifting new that and to capacity new optimization of we reduction operations, to increased we'll a customers has be to overtime. have allowed us collaboration This our combination are in in The has waste CFO fill enhance also with hire wanted new

at calendar retiring end year. current As Ken be the our you of Plunk, know, CFO, this will

are sales optimize to customer summary, the pleased In improve and progress all operational efficiencies. we we channels our making are with across

provides considerable Our and innovation across of customer base. diverse opportunities our on portfolio brands products and growth our focus continued

carry collaboration. team, skill. generating value balance and employees and and confidence I'm liquidity, shareholders. experienced our jobs our Additionally, senior with Their consistently led partners, leadership out for our of our our work team along proud results commitment strong incredibly sheet in and strong our that their long-term their employees, and who reflect has goals to with hard to reinforce dedication

to contributes our each It's see driving inspiring team a success, strong success. truly for innovation are growth excellence. foundation and how operational we future to Together, member and building

core XXXX, product potential fiscal enter the partnerships. of optimistic products growth about and the we new our and we client success are launches our of As

convenience, performance expect restaurants confidence spending improve trends and core improves our in and to XXXX. consumer fiscal as theaters, in We channels like amusements

significant With a Ken to ICEE products With like the call film will that, there I believe for more across improved performance in and our we growth stronger anticipate over and lineup Ken? opportunities as our well. be Dippin' pass ahead, other to Dots sales now would to detail. financial review we

Ken Plunk

ability faced everyone. softer Dan, our customer core even full you, to morning, I our Thank deliver yet record and of year pleased another environment. good performance, channels as am with consumer many a

a place. the a minutes that fourth quarter results. take would are we Dan and As walk and our to to stated, fiscal through you right strategy running our working is few like executing confident is team I year just

is our week, included XXXX. in it reported quarter XX comparing XXXX and J&J's fiscal results in quarter of full that XXXX fourth weeks Before additional important XX to the an Xth weeks and fiscal of note reviewing to quarter the fiscal results, with year fourth

XX include weeks fiscal for year weeks full compared XXXX results results reported XXXX. the XX to Likewise, for

explain For to [ comparability, purposes normal ] accurately trends. we'll of refer more SLs Informix

peak at Looking of first seasonal a X.X% normalized increased days even prior fourth had July impact sales results. for the week to decreased pronounced our on are month. and the X.X% in quarter due days loss more as fiscal The fiscal on X compared basis. These to sales business. Net losing quarter sales our of of week an year reported our the core selling

to We for sales comparing quarter $XX Reported 'XX estimate this million fourth for approximately impact to $XXX.X net be million. when the XXXX. fiscal quarter totaled results

fourth our compared grew incremental our less For decreased to and quarter on reviewing in one minutes sales sales week. estimated the few quarter prior results on despite saw of a largest million having results a for grew during million added sales X.X% each reported basis a fiscal $XXX.X year, basis. fourth an to spend I'll segment, comparing segments. reported $XX.X the X% Foodservice, we X% period. year sales Net normalized the

million quarter X.X%. X X.X% Sales with through we X.X%, menu respectively, X.X% less consumer Churo declined consumer period, sales driven categories This basis softer in $XX.X customers. efficiencies partially of Frozen like The and of restaurants. softer food to supply channels quarter favorable the handheld million an sales and a overall amusement by approximately by and spending service sector just $XXX the increase across pretzel soft in Churos was the added reflecting two normalized in operating declined prior of sales while sales estimated to XX.X% in of manage of chain increase X.X% and decline a novelty a sales. income was bakery This most as placement and convenience sales, offset to and foodservice production sales key new attributed million Sales new less this a X.X%. decrease week year of and versus on mix increased an the lower demand. to $X totaled products addition QSR major led customers the fourth and primarily shy

offset by Soft retailers. Moving driven QX we major biscuit a mass expanded Normalized net mass in product relatively sales This and spending by reported million totaled XX.X% handheld decreased decrease an placement estimated key increase decline to and was grocery novelties, as sales XX.X% a retail. sales frozen merchant. in tightened XX.X% and consumers respectively. and a in X.X% as merchant with sales partially XX.X% Pretzels of or flat $XX.X

rates, operating million We food reflecting inflation economic discretionary a concerns. prior rising long-term versus to the card $XXX,XXX overall of higher credit sales. $X.X impacts, to interest and of in period, spending from led This pressure income balances an drop the on see continue decrease year or

Overall an especially and a it normalized strike. relates comparison, an week. QX record at Beverages increased gallons and year's were to as X% in July flat sales Frozen improvements quality third to Beverage decrease estimated sales increased to extra last X.X% a led a the a on our recover Overall September active basis. million, so, estimated normalized segment, compared started releases X.X% but million, 'XX. As did theaters sales on $XXX.X $XX.X when reported were for adjusted from in by increase the volume segment sold

we increase As X.X% prior declined Dan significant and mentioned, the XXXX in and film releases. maintenance the electing of the versus Repair stronger period year expect volumes improvement experience schedule to calendar revenues of a the X year led impact given to QX X.X% income machine This and for operating less million. quarter. X.X% $XX.X up the QX week compared 'XX while were $XX.X operating of a sales to of to income XXXX in quarter million

mix improved management driven was operating expenses. This and by product effective of

on X.X% I all service, out beverage food full XXXX, and and Adjusting increased X.X% segments. that moving year for like foodservice, X.X% Beverages would normalized increase we Before and a experienced estimate sales. point Frozen food segments three sales to basis, increase on, the week X.X% including a growth, in X%, fiscal retail for X% and in that additional the in respectively, in retail

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

primarily the our XX.X% For gross in our previously to leading points. to profit. growth to our gross impacts, $XXX.X cost and, fourth it margin relates eggs higher with XX.X%. of by increased profit the net experienced goal raw In and of cocoa, across consistent materials, leading increase XX.X% expect of XXXX, rate on sugar, basis the deliver X% margin improving continue portfolio in million, XXXX. profit ability we inflation to lesser and remain improve million, decline gross gross extent, QX deliver a XXXX. of of quarter a to to rate mentioned XX Due the inflation did fiscal and compared further as X.X% We increases and we margin in our to gross confident to our driven to a mid-single-digit our gross in And to profit strong of to to cost rate chocolate, year, $XXX.X improvement needs.

price These the cost deflationary of at continued cost manage and offset chocolates were trends seen sugar help majority dairy mixes. flower, somewhat increases to the true-ups Pricing inflation in gross driving in of increases and consideration of but adjustments and further by in impact, margins. cheese minimize initiatives goods is contractual

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

expenses. of million $X.X at expenses for Looking sales flat costs the operating period. of decreased Total quarter efficiency to were the distribution as compared prior chain across to of expense made and the in sales sales year X%, network XX.X% to increase we or compared XX.X% continue drive to year Distribution period the representing supply savings. investments in quarter, XX.X% prior the our

in Marketing in and 'XX quarter as X% expenses of period. the opportunities. or selling for continue approximately impacted income quarter QX $X and in the compared to operating income X.X% a an X.X% or year quarter for in estimate to quarter X.X% the to and for QX sales of versus million. Administrative our X.X% compared the new selling expenses prior an Adjusted innovation, were product of 'XX. brand in promotions we were This sales led million We fourth X% the invest operating operating XXXX. additional profit negatively to in compared $XX.X 'XX. million was million week of QX decrease the to by $XX $XX.X decrease

to year per income $XX.X while increased of quarter leading diluted on decreased per to of year fiscal $XXX.X year prior $X.XX compared $X.XX And in the in the million, X.X%, $X.XX versus operating million. net prior the $XX.X period. in grew share increased to XXXX. of prior to income compared $XX.X period. million, comparable $XXX.X in diluted $X.XX in were year year basis, of share for for After compared X.X% earnings fourth X.X% share the impact a million Net basis, $X.XX to to the earnings $X.XX Adjusted earnings earnings per and adjusted full quarter diluted a taxes income full X.X% the earnings resulting to On operating million

prior the XXXX resulted $XX.X full basis, tax the fiscal to EBITDA $X.XX million a to of quarter Adjusted per full This million decreased increased from On earnings year XX.X% in fiscal year X% quarter. diluted in EBITDA XXXX. adjusted effective a $X.XX share million. year adjusted in period. fourth the versus for rate our in $XX.X record was XX.X% $XX.X

balance Looking with sheet and at continue liquidity liquidity we our $XX.X cash position, no to strong overall a debt. healthy maintain and in million position

more flow pay working initiatives generating stronger to is Our down and pay and debt, ability business. cash in capital dividends through improve continue to investing cash our profitability

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

we ample continue the In our borrowing momentum by improvements make in availability million over operations. portfolio of of sheet capacity. $XXX the balance continue have breadth the addition, revolver see brands, to our additional we our of to we To supported across and under strength in of summarize, business our our

very turn time to exceptional J&J here. time Dan, is Directors I and truly much for I operator, wanted as thank their member an during every J&J company, unwavering I team the the over enjoyed CFO. Board to support my of my call our Before and of the

Dan look seamless smooth and I transition. ensure the to I would like we are operator to forward As for my questions mentioned, to close helping and a replacement, now over answers. call announcing turn the and to

Operator

Instructions]. [Operator

Rattigan Edge. Consumer with Connor from comes question first Our

Connor Rattigan

So out Dan, consumption retail, software and be traffic it you QSR, called channels, your challenged across C-store.

noted confidence across XXXX. into given gives you guess of XXXX. just this magnitude the of understand pressure? Also, of you under the help traffic backdrop could pressure, kind maybe comment persist to I but really what you're the of kind where I the that is broadly kind kind guess sector, don't greatest us expect into And continue seeing the traffic mean of you that pressure also maybe pressure I that I understand really you won't and so And

Daniel Fachner

hopeful convenience really time the bounce are that a Connor. that and all theater a to part of we we've There's chance great a in what of the this movie coming theater we have And the that through that And be even has XXXX confidence lineup gives Great you right? for into at maybe those XXXX. there's period then future, their pretty sector, to declines return saw some for coming new gives sales me areas the close gone long, both rapidly. strong ones that this of hope really if question, that's believe, releases a It that year year. back Yes. and year. I couple end reason out even look the as the especially into you the A really great of will

time. we into the me publicity throughout I the my get there's as XXXX as fill about or it spending we some consumer back the talk couple through asked A react consumer QSRs way a or down throughout go worried think the And you this the there XXXX. election has lot I been the down. that just heard other, period, throughout of one know we time, of specifically and during even that were how myself. And been concerns has was year, the what out closer that of areas period going uneasiness might and There's people you felt said I it. being and the of you I and other stretched restaurants about, me

feel the so believe go what are of I just that, economy who for you people who once that resilient American come our wins, and will wins have forward. through we as And party a regardless there's stronger

rest some of think from we XXXX both and all I feel starting subside. of does doesn't that that into the operational each in overnight, that we it I to And can fill on hopeful pipeline that quarter a business our of have today, And over nice and get the a of new some It through move we time. those into pieces the a see we'll hopeful that of we pretty efficiencies period happen see and great year, really happen as see first but so things we're going even lot unit as of business right? I'm the XXXX. the with we pressures

Connor Rattigan

helpful. was And That really just Great. right. then All more, one too.

the on component. margin So

So some given $X called was a compare believe pressure the I about you out operating XX-week with, it million income margin headwind.

you correct And up out? the consist like of guys just significant? mix that wrong, pressure. it that Could there or that headwind on the gross called you million I'm pop me little income maybe maybe of bit but if maybe inflation $X some elaborate And incremental so pressure margin headwind Or quarter? should operating why a was in so entirety was seems promotional the

Ken Plunk

we Yes. products, Connor, those Thanks really was are of this pretzels, That volume, again, lot is week, Ken. things. time a key a to of wanted core Dots, question. Dippin' selling is where churos, loss for and that first of our strongest week of margin your we some ICEEs, a kind the call and out combination Yes, of the July it's One, fiscal our lost. period that month products. of high that, that the

the that we drove million. So estimated income pronounced $X impact because it was and that margin on of impact on especially operating week, that

spoke as with estimate some a areas growing The in of and combination few of come declining, quarter, of and remember, core we in core QX. looked impact are had mix. like that I'm predominantly the basis in probably those margin many other items about out and amusement sold have serve recently particularly channels read rate XX in higher of of, those all we you traffic, that around soft in those Connor, about customers see are you And on industries into from restaurants some softer that talking quarter speaking that and those can and increases margins change just others. point The those we thing, sales the bakery, in they the handhelds on of spine in those we channels and caters areas, of degree combined areas the in in lower-margin

Operator

comes King. question next from with Wolf CL Our Andrew

Andrew Paul Wolf

I do. I have a retirement everything great to and you on congratulations else last follow want up post-J&J, Ken, the on know, don't and kind of question. whatever

a just and and earnings big think, seems to the than press me that guys, from you kind problems the just looks the production mix release even of terms supply more little you spelled have outside, be deleveraging referencing in change. where Can and you foodservice the and been were to you a your I the of because of like talking So part chain. about rest inefficiencies unpack missing Clearly, it out targets.

down, and your shifts So demand of the either that I plus it labor wrong the absorption of there go there's unexpected is so Or the way know way, just on. but mainly lack unusual? But rates anything particularly overhead. to going was when are

Ken Plunk

You It all actually, was of it combination well, up summed a Andrew. things. those

expenses, of are we into of are as gotten expenses those So all but fixed X basis that efficiencies numbers XX% talked rough on that fixed, the these a distribution driving we've particularly cost RDCs more. is around those about here, the

in that's $X sales to I'm flat I in, $X dollar that difference. And And to million so part a year -- distribution actually say, came why that's with a down, the when a proud then million on the to want impact. sales or quite ago going came year going less ago than given basis, expenses. we of as are That in not we well. was leverage That's

So that we margin core it also because expenses, was and that. it spoke of sales and consumption still having built to declines. And that in manage contributed have then the and really byproduct. down and because we a come I of start manage in when and up absorption, -- we both deleverage metrics. on XXX there it absorption that, planned that those And inventory. this kind pullback to challenge to margin areas Dan position in basis ago. was creates distribution points less was those up lot well. And we mix a was year of it fixed a We started a challenge lower see production, have to ended that We the mentioned than But

Andrew Paul Wolf

had those a it teams shifts better? hope is demand Ken great demand so whenever that sat well. change. can that question. related to is in just have that understand the of I And goal the how organization. that, question. machine It's that team the like go way circulates any improved and a lot we quarter, would previously future, those absolutely be I'm great planning change, and at. to continue kind or is to better unpredictable in a AI We and always get can just And same a better you think down really, learning Okay. at you questions, asking at one about to I demand improvement. really is We predict we've of actually that think a that how exactly in think there's through And areas anything within like well. for in on our But there transformation go planning as it areas opportunities really those will and that's our to right? we of Or I these It with or doing we've questions asked look become

Ken Plunk

these out And to started that summarized lot quarter things really, add, I the a as he was a uncertainty it. combination few many would in in some negative and mention we that well, attribute Dan probably in other of the And trends already election it that the then in Andrew, the don't had July. channels we a a measure tightening I we was up. September. was have minutes the thing script, good And and And ago August of discretionary of Yes. did spending around the

timing -- hard outdoor came It the is for Southeast. that amusement, to we big, that terms July hurricanes state in then the is sort out big two But of a Florida of of the thing. started sudden to I in us and to anticipating would be obviously and out all Florida declines of necessarily coming that play September. in of weren't a played that and of the suspect, some measure [indiscernible], August

Andrew Paul Wolf

Yes. Yes. of tried was to quantify food -- It the pretty distributors Yes. impact, right. it. a big least I'm There at one service big was but

mention frozen it. I a you or at it. a QSR wanted or just chain. a Lastly, doing beverage ask thing you just didn't of us update because I'll want could you if to lot specific Are covered I did still test you don't a your you see innovation. you did, repeat QSR, if mention But -- to it

Daniel Fachner

continuing grow, it. are to but in now not We grow. out to and it's additional continuing mention Florida market it, down with rolled I did we've an

can hopeful the year. something in remain so is we this XXXX we And that that bring during

Operator

Brooks our And Instructions]. Company. [Operator from the next Todd Benchmark comes with question

Todd Brooks

gentlemen. you, Thank Ken okay? try play not too golf, much to

Ken Plunk

you, Thank John.

Todd Brooks

First this to of question 'XX. fiscal I the have forward for you, and and it timing gets looking to call just

a a of beyond margin improvement. 'XX over to and time as kind talked bit on. that in little of expecting gross you with medium-term call, levering here fiscal 'XX about more a pointed getting target improvement maybe you of of the margin, to You've had goal, We've nice a record mid-XXs about distribution, talked the XX% gross goes track

margin framework from the that consumer improvement maybe business, our forward to unlock standpoint Just in set into knowing for looking back, the about expecting 'XX, can year? controllable bouncing of but margin you're on to we the hopeful within try expectations level that talk upcoming you're elements the

Ken Plunk

a great profits Yes, financial time about There's lot we it this spent in of did us, gross last the a important And Dan's and of absolutely. improving That's to sales. we we very the about did year. talking year, it strategies why And margin. growing faster strategies question. than really reason comments

do expect gross plan same, next is would Todd. to Our for continue improve. to to year margin the We

to show this over the think the year. to I X.X% would safe XX%, year over it's say for which expect we be improvement it

low of whether we'll number but I harder, think through we goal, went 'XX. we XX our the way distribution, our operational whether is to there and Dan below for thinking year. are next XX% right? beyond, we get our procurement, next that range last think do how and got and in recently, There's there. there be of kind it's is I area don't the think its do continue range. mile that more work very efficiency, We to the XX% The specific planning are that it's initiatives I kind way gets there. it's a initiatives in this mentioned whether towards But figuring get focus there. the we starting get hit quarter, would in call to probably will to lot out

very continue the be to and All initiatives are things of specific focus. those

Daniel Fachner

to that. much continue Yes, say work Ken continue it all focused to possibly the as time, Todd, we drive the around bullish going last that teams like to mile can. it. mile. to just last is in I'll before. we're as the hard And going said, just the as hardest, be continue to but And that We're on I'd as echo ever We're

continue so to And can we it. think move I

I that's accurate gave the a it to think then for we'll you number Ken and as get better year, probably well. fairly next continue after year

Todd Brooks

product, XX% number? The on up a to that, can. all I that running and now just follow-up three fiscal of the distribution is in XX% you that there. 'XX said, through set if And RDCs the of with or really goal meet beat like deliverable

Ken Plunk

Probably not for Todd. the year,

won't of You'll enable QX and I range, products see QX or the in that many hit mark seasonality that the fixed up of us QX. there. cost we think, sales get us are even the given getting in level in QX when in there, in to and that

probably I out So that would say probably the somewhere, in time. something will closer mid-teens, average

Todd Brooks

Perfect. then... And Okay.

Ken Plunk

be to mean clear, I mid-XXs.

I what is range mid-XX% to was trying say. The Sorry.

Todd Brooks

on dividend I then focus at Got just lapse XXrd did grocery newness, the with you retail not question had much final the of we week announce kind because just you. the Kroger. Product explain to with know that me. for on upcoming not as the in call launch And year.

Busters, talked when & product theater the more outlook here the news. core early this talked channel you're $XX about calendar now was the in you this ability Are to the double run with You million additional you up incremental but through Dave bullish retail to channels, Dan, as all business bought that for it. you placement, channels about seeing on rate expansion relative which also expanded opening

Daniel Fachner

We're big retail they're We early consumer, from talking our not equally really, really thing. our customer, really excited excited. Dippin' Dots believe and indications can And talking that us. as to retail but the be about customers, for to

about it with feel we we so Dippin' Dots have out to coming And think really potential up And well. a that. back we product as good of

how and teams able And am our we being double expand so on. I bullish that are working love sales. see momentum can I the they that. that to those still

would may P&L, items way show retail with that. be if And love service they because food that we still really on can that of out we the calling and some believe top list. and acquisition. in were the of we doing it. Now we're I some I in like the that, new out, I that up coming But some the report what our do

in -- I the brow house also I like our mentioned retail.

positioned Snack I profile has team and flavor the think we this kind market enter into to think and well. year, pet Aunty we a at with I single best really, Dogsters. to serve really new we're expansion And do really looking of pretzel J&J pretzel as introduced Anne's have there going a last of in industry introduce into nice better, well. Foods to we're how then that that continued Browhouse that's Today, The as entering this and around us. kind well good, our Pretzel. for our And

great out we across have business that call see the all just in don't -- our we opportunity this some to the it's things of something units opportunities. Just to really contract talk about. call because an manufacturing with good with mentioned always that Even

there. We have a opportunity really nice

good the So of a really going into tailwinds year. lot

Operator

Our comes William next from Jon question Blair. Andersen with

Jon Andersen

and bit thanks Dan loop the kind just try of for and from questions. Ken, Maybe the the questions on little the one last a of close participant.

of ratio line, marketing line. kind marketing in years margin You when distribution to the how I thinking about ratio. you're different a a wanted addressed the and of hit came There were down. the gross couple XXXX

at the X.X what was the line given it bit there, retail. behind products, years in business. as promo the understandable particularly marketing evolving the a cetera, of quite you How to It's sales, different X. closer you at do some into that year next new some this dots, expand, et of you see investments retail mentioned over part and Dan, about happening several still to ended that's of X.X% crept year was up 'XX that year ago, the where time. little below think and I 'XX but

Daniel Fachner

within Yes. being the of by Jon. conscious really their good [ marketing really Mallard some I'm really, all led proud that at ours Good question, times. team ] of and people Lynnwood cost

X.X%. flat And range spend that there year. teams they maybe more that evaluating would during to I marketing so focused see and the all it up somewhere and in lined X.X% I next I diverting how line time basically ways, are I that range being year. that see have some would same to the that But flattish as more like that it we digital next and first into answer question for how in marketing this The in different

Jon Andersen

Okay.

top minute. So to the a for line I to wanted shift

of hey, bit of basis, about consumer talk on in on in at is I X% even and you pretty softer grew a that sales think traffic normalized good. I this some step But quite some And which I pressure certain a you back grew sales normalized, nearly this year. about, quarter, of the the throughout guess X%, late, X% about did and or year You the channels. when or

to taking are view commentary trying so hold. kind of efforts some cross-selling And that of the that of thinking I'm taking kind around your then and

guardrails channel kind improving some at of as should about normalized we theater for 'XX to terms fiscal think we this point? is back what consumer the of be top stronger growth us kind come How in is forward. modeling you line least going to likely about would work at thinking The with give the of

Daniel Fachner

broad for year doing to are has an falls I It proof. some the we you've teams have have to which resilient, really and some proof. of believe you or kind I not back to things those allows such of of had. of heard if doesn't love what portfolio that. recession exactly we J&J of call the -- this diverse grow time, what but what kind own in I proof broad, with portfolio last mean that recession the compared extra some affected some, don't of a proud Yes. money trying That's I'd there that get I was the us line out of It we've recession don't that some We're week get we year in periods this to of to out. year, calling the that things say be really Especially this, company Thanks on me across we before that too. the downtime call

it growth And is would continue that right? look year in And year digits. some range, and those We in I us into probably how to mid-single-digit that and growth, digits be as that that the out, going that forward. in mid- looking we at mid-single see low should we're somewhere XXXX, improve. to low industry think believe channels in single we and I have will nice Our goals really opportunities, combinations, I probably get think, somewhere

Jon Andersen

And is think year -- the some least calendar around this of some pricing it usually in additional year. to at the point? the I new look that comment remarks prompting algorithm a part to inflation, not price, Is you part think XXXX that was the or price there cocoa, at at perhaps you in late in take prepared in effective maybe I was sugar,

Daniel Fachner

cadence business It they ICEE is, foods January in pricing that and taking be the and of the will January well. kind on that an Dots they'll in X the we time units, that has X snack somewhere increase that mid-January, side. we'll then And on on have is Dippin' do as snack ICEE frame. Dots and call always Dippin' I what are food and now cadence

Jon Andersen

me. for one Last helpful. That's

or was down CapEx Your so this year. XX%

think, we obviously, about 'XX. in I Yes, helpful. and to didn't I that maintenance XXXX But in larger capital that be think 'XX there have growth. think that's investments, efficiencies, was operational should infrastructure, would how you're expenditure in repeat some making because in

Ken Plunk

Jon, Ken. is Yes, this

sales. to be a lines to X.X% of think big or still, I about I X more want X and capital. There's that way going on were to X summarized lines improve years to is it's say, forward back may invest to in cetera. we continue 'XX But about 'XX X 'XX, rate the mean well, around of it state. bit think investment to run And now X% or RDCs, our the going I You we the in I talked add the as a that year we're and think next X, kind we'll et normal of business.

So $XX you in of million $XX future, come that there. to in would a in put probably range somewhere the near million,

Operator

from question with comes Jefferies. next Our Rob Dickerson

Robert Dickerson

Great.

for two I questions Sorry. me. just guess

just the like of spend, First all going question back is to the discretionary channel consumer so stuff far. dynamics, kind fun that

-- exposure, of have a clearly the in better channel occurring a some bit has convenience you expectations of number comes who and what's been kind clearly, see a store been as year. if to yes, a [indiscernible] hope through C-store channel mean, in back they recently, and get promotions view next where and been C-stores, walk of under actually of kind I've the You talking I few have really of I which see oh, some of have don't we stores channel kind pressure into say, convenience do the that people

kind discretionary and consumer, an channels with how do discretionary very Feel a more could kind or your what people first kind to of actually like broad entice kind like, the while of about but average because things of kind of person what could a the to who decent understand with it back just would to get as of have, overall is your gone channel that like benchmark maybe shopping of that releases, and film election a of preface that about and like think there? moves those think taking That's I where normally channel comments to I are consumers of C-store products. like And kind like kind of guess, C-store realize I and kind go on some you how like kind of of all the kind whatever movie spend a like new what there's back choppy you question. have think

Daniel Fachner

on convenience is on business closely, of The watched there. pieces Dippin' happens ICEE on a side, of those the channel food impacted too. It what of are Yes. all our side, interesting really the the it lot infects side. I because snack Dots And by X

I the out which and activity, highly marketing brought we're pull are some that consumers entices promotional in industry will that looking think efforts people at I car of looking at have products really in as strong. bullet car one spending that in out impulse And a store, pump that buy items often gas our I them the to get area their and they're out We're confidence if into additional you to and pulls of of up silver And a overnight, know there's there. we so core the back greater inside don't that for store allow some but consumer convenience the think to products. and

so me it doing we've you've theaters Dippin' sometimes before, been say in And the Dots. well and really this as heard and with

it's best so Stores Association National and at Sometimes particular in little a Convenience have when continuing good to way in channel. really the areas of to lot come right? our several come hard in as out of is will -- the we're and -- best at back had that channel our were that And invest time base a that and you a We out working of grow of Show opportunities that. just soft, some

come continue We're in going back. it are that it grow to confident will to and

going pull it too. to or going as QX, as activity operators they sure, are, it They're that, well. to try they're and the As but at consumer in and back, marketing we're working then comes smart some hard not I'm in drive QX do we're and to promotional to

Robert Dickerson

oh, churo like like little can in a get Subway, we right, some why mommy introduced by Johnny drive Yes. I like kind there's a ICEE kind large assuming signage there Churo, hey, like mean up into $X and stop put we pull Dots and way, special Dippin' them of I'm like, for better. you just thinking everywhere, not just the cars [indiscernible], consumer size. of say, Like to are I'm hopefully, there ideas or bit out in little a, day for signage it's a gets versus

know what mean? You I

Daniel Fachner

recognize going the marketing when that some other agree, in business. now. of are has I of We what you're That's right products store, to convenience in some exactly up curve done those over those years saying. call to leverage start I really driving curve into marketing I'm that Rob. well, where you that we're and of pieces learnings our there out see to it

Robert Dickerson

enough. enough. Fair Fair

couple with then there've the of along of a I then it. do kind over But a And around the kind lot past of of little margin the years just it's optimization supply cool. to the of quickly, you comments CapEx great mean, lapping expansion. and that week. softer chain I Okay, been now network -- kind spent realize and like extra gross also moves

kind help, next right? Some a that the year, that then time gross up getting still you a margin right, [indiscernible] that of longer-term expectation, kind in margin. would of was too. but But consumer some can because not over operating of It's and tailwinds because mileage like profit of far initiatives ton, there the obviously, like get

SG&A, what and necessarily forward, a we'll So able if on leverage anything our X changed Or back bit, through we're to and be like, is the track, environment like costs environment has years we're changed. have and that's but little there no, you. well, comes thinking back distribution like

So curious. but a again, of just kind broad question,

Daniel Fachner

last or the whole last that that against. things levels drive you a nothing me for I've of Yes. a those right? to and about. it you get time marathon It a than half so the our really of the has a hardest. hardest. what talked we've continue in really bunch marathons. the if half And to No, up initiatives you that life, is say ran that hear full And we're takes Other seems changed the mile to before ran is to of It to rather those my period Rob, mile, I when said like are

drive last take with they've how to that with same stage mile, weeks do work and next continue day. met the met on I'm okay, that. those margins, team a talk When as love thing couple we the will through be And the plans some supply you goal and the hoping with plans We harder. but the so each has really they every ago we now the to in it, will that just get I that the grow we to great are continue the We'll XX-plus team that it. chain, someday things with with of that And do to to team And that of just get harder, execute this about, sure right? to step? big it's in mid-XXs

just into Our get as goals there. deeper believe that I gets My it. tougher you haven't changed. we'll haven't get initiatives changed. It

Ken Plunk

Dan we every day, to in every what just But some because what strategy. said done. the this real Rob, to I talk of quarter. These add is the mean proof about emphasis parts meeting, every are we've

improved by other the points points. by we part, I margin EBITDA margin, So and XXX adjusted mean improvement basis the that XX basis profit EBITDA in driven year-over-year gross was then extra sale. in week, fourth you expenses. we take would have out primarily as Even a of probably if EBITDA the of came quarter, in the around rate distribution impact the XX%

So we're hitting the mark there.

as and those drive as performance to the next It's next to are and up. again we going to I think XXX how things those to core we and is business But do strategies how get continue be numbers move XXX. harder long the the

Operator

There like remarks. closing to Dan Thank no time. over back call this I'd the questions are for to you. further turn Fachner at any

Daniel Fachner

opportunity in very closing, are valuable successfully In these are ever-evolving past business to objectives XXXX great such our to and take being you Ken partner long deliver want for to in in much. we a executing Thank his environment, I and this term. leader ability also confident the transforming we work strategy over our an in over operating our in the thank and XXXX to to Xst on have We this updating at have us, life. questions fiscal Everyone great to very should new any JCIR please chapter our a Thank interim, his family you you wishes of results. the look firm, you, and our day. wish in Investor his and years. contact speak the best X In forward quarter J&J at or him Relations XXX-XXX-XXXX.

Operator

for does your participation. the This conclude program. you Thank

You may now disconnect.

J&J Snack Foods (JJSF) 14 Nov 242024 Q4 Earnings call transcript