- Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to the John B. Sanfilippo & Son, Inc.'s First Quarter Fiscal 2023 Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Mr. Officer. Executive Chief Sanfilippo Jeffrey Please go ahead.

Jeffrey Sanfilippo

morning, Thank XXXX us. welcome our and quarter you. earnings joining Good first for conference to you everyone, call. Thank

the President. our Frank COO; today with Mike Jasper and Group Sanfilippo, our On Pellegrino, our Valentine, call me CFO; is

some factors today. These make in impact We are that uncertainties our could XX-Q. based you statements made, more business. risks including inherent certain the statements Forms they explained to and negatively expectations SEC involve forward-looking filings various to in filings and may that the and are refer on we have about We current XX-K these uncertainties. The that our encourage to learn risks and results are

our performance will highlight to We financial discussion and strategies presentation. and Frank, the a update. decided the change freshen I who earnings to start call overall the then call and turn format provide over will up to

a and is first XXXX branded business. record off across to and consumer strong channels growth distribution volume start, including our Fiscal sales net quarter multiple

brand see sales strong as despite customer. current loss products the demand excluding grew a our nearly for environment the of private to customer X%, in inflationary by our volume continue channel grocery We

XX%. volume of COVID-XX with restrictions. business to volume grow and continued easing And new customers the recipe nuts the distribution as we our Fisher grew within foodservice channel XX% our Sales increased continue at existing

which onetime decrease Lastly, was for year's in a impacted gain, XX% accounted EPS. prior of the first quarter comparable diluted fiscal almost by the quarter positively

as and fiscal approach stabilize. and positive effects freight to the respond we including dynamic On we prices. And and today, relief efficiencies, commodity to recently our have to chain holiday selling as our focus aligning a costs manufacturing on the experienced costs acquisition begun throughout are some continue and inflation face have this season with note, environment the challenging a optimizing we year. maintaining We that we supply of

members Their and year initiatives to will across recipe and distribution team and worked business the drive company, respond optimistic challenging of quarter. in maintain over levels increased our every instrumental strong through nuts results, like investments resolute create value. proud is were this the and new to thank to our to team challenges time past new person customers strategic I our quality. and tirelessly of operating have efforts our the to I'm organization commitment unwavering. our Fisher and in in continue service private brand would long-term stockholder whose leadership am I all for securing who exceptional and consumers our any

pay higher in oil, plant for segment, needed are As fields the prices The year. pecans. stable cranberries we starting is In harvest due factors almonds, compared to to slightly with anticipated we tree costs labor dry fruit freight, their raisins significantly peanut energy. be over last more walnuts, peanut is Main reason farmers market, cashews season, that for enter to year's last this however, up most year up compete to to inflationary anticipate nuts, and including soy. acquisition and sunflower cotton to January and and

exceptional some still we these There as did but supply just team and employees will dedicated management consumers, chain constraints year. are within and confident respond I'm represent which our global challenges challenges, and deliver last customers for the to our performance

enter and to their our new collaborating top supply recognized are were And and service this categories potentially product their develop to levels a with as by Our extraordinary result, service new past lines customers. and quality, grow business. needs year we consistent them

necessary prioritized capabilities growth. long-range the plans, brands the completed business. we and resources 'XX, continue foundation our and our In billion to our journey the growth $X in current future lay first to for and become team the execute a quarter, invest to fiscal have production In we management strategies, to investments people,

Harvest on key transforming high-growth customers, focuses nonbranded plan Valley increasing snacking Fisher, Orchard Brand across growing portfolio diversifying long-range segments. into business Squirrel distribution leading and into and Our our our brands while

Key We plan acquisitions. by customers long-range our priorities through and include expanding consumer plan product and sales targeted value-added our growth solution innovation for with our industry to extensive opportunistic based execute on providing nonbranded expertise.

ways packaging our distribution expanding channels, product and new to diversifying product by on our for alternative grow reaching will via We our business buy products. current focusing innovation, and branded consumers across expansion new offerings consumers and

investing are enablers well as There growth to X are our in we achieve plan.

The sell consumers. customers convert first innovation and new is marketing to enabler and insights,

is data fuel consumer help organization. our in and investment embed example great growth our to a Our insights across

We foundation to are and will expand brands stronger products, more consumption, develop extraordinary a particularly and build shifts in investments identify making with the stronger establish and Z innovative are monitoring millennial faster, consumption, relevant, Gen generations. opportunities we

will one e-commerce. long-range Enabler E-commerce in of the plan. be X is biggest disruptors our

platforms our e-commerce desires We and match behavior. activity to advertising focus believe baking more more brands our have digital consumers' to redirected enormous snacking, on functional to cooking We there and promotional brands are to for our with consumer to respect opportunities and connect products.

are In build our to key with brand private their partners business in help working addition, e-commerce. we

the for in in our governance. more Enabler and believe more efforts. We more and where believe creating doing company. the steward successful organization. in our make engaged. a elements environmental, ESG: good and communities environment social diverse we decisions and X workforce stronger in inclusive with our we these being And All is a believe us social are We for guide better a sustainability

our additional financial I'll our to for now CFO, fiscal over first information to quarter. call turn the performance provide Frank, on our

Frank Pellegrino

to pound volume, average in customers. weighted increase per a to quarter with fiscal million XXXX. Jeffrey. to as The X.X% $XXX.X sales of the price a defined million of pounds increase sold attributable which sales net increased first sales XX.X% X.X% in the $XXX.X in net of mainly increase first statement, quarter sales was and to the compared for net sales income Thank is XXXX for Starting the fiscal you,

in mainly consumer quarter due volume brand mainly the at for average acquisition a primarily in Sales sales The volume fiscal from to price customer a distribution costs at XXXX decrease for peanuts. and a distribution increase grocery of new resulted private selling X.X% major channel, fourth commodity came from that X.X% substantially in all lost retailer. by sales. occurred in private brand a products and product nuts decrease sales distribution for private tree higher in The and offering increased brand mass decreased volume weighted merchandising was the offset

recipe offset nuts, related ingredients and to restrictions. Orchard increased volume due customers XX% volume distribution The increase X.X% X.X% Nuts. sales Southern our include Sales Fisher foodservice of Valley increase sales overall overall sales an a the in for volume channel products, which nuts, the for Style the impacts snack and the Harvest decrease distribution in partially also Fisher channel by continued to was existing consumer and in COVID-XX of volume new to the recovery industry commercial in restaurant customers branded

as nuts fiscal from quarter the Sales channel per million volume commodity of And customer cost for increased costs acquisition decrease selling manufacturing timing dollars a supplies. contract the peanuts fiscal in price net to primarily or XX% decreased to in gross decrease XX.X% quarter the due as profit for promotional was XXXX $X.X these $XX.X of a of profit attributable the million. first Gross major The to gross tree by packaging of margin to average as higher to distribution margin increase profit a other including labor XXXX. profit and in the percentage gross activity primarily and major new for decreased by and an and The X.X% increases, all for weighted XX.X% customer. sales due was increased business reasons sales first pound in also volume. well substantially inflationary offset and

Total approximately base overall lower to for the expense, quarterly in to quarter increase of the quarter partially $X.X XXXX. increased million $X.X incentive gain by occurred of freight facility, in sale contributing increase. the the operating and current expenses also the offset compensation which a Garysburg, from Carolina An due million of fiscal first nonrecurring the North in was comparison first

from to Total was reasons I offset operating primarily to first which due the to increased quarter the higher due of for base. the first for XX.X% expenses first first expense Interest for levels. a sales year's net primarily for with for above, current rates average noted the XX.X% current $XXX,XXX increased from the quarter XXXX by sales interest net -- $XXX,XXX quarter to weighted combined higher of last short-term fiscal quarter debt average first higher

quarter. the XXXX the the for prior the the facility million of $XX.X of per diluted first nonrecurring quarter first or of Carolina in North $X.XX the in per for diluted or $X.XX income $X.XX fiscal fiscal diluted gain share was $XX.X per The sale share to share quarter XXXX. quarter to prior compared contributed Net related million

Now was nut higher quarter work-in-process weighted well increased at inventory. to pound average the or of was end per of per value end value XXXX current end costs inventories as at inventories at first of mainly to hand compared on average acquisition pecans the goods, of due $XX.X fruit and pecans. input of quarter for value the the inventory quarter increase current the cost Total quarter acquisition and of quantities weighted total first to of due million as the costs looking fiscal also for at XX.X% on increased raw fiscal stocks cost total at compared the XX.X% The XXXX. in The of and pound the increased hand the end of finished of first primarily higher pecans. to inshell dried

be regarding our fiscal first XXXX. tomorrow for will of filed to XX-Q, financial refer details for the quarter performance Please which additional our

Southwest back we Sanfilippo, November presenting will Before that I the IDEAS be on note Jeffrey Conference call to XX. at in please over the turn Dallas

scheduled Central to X:XX at Standard is presentation begin Time. p.m. on Our

turn call to will I Jeffrey to category trends. Now the discuss over

Jeffrey Sanfilippo

Frank. Thanks, Great.

the brand to of for like category share I'd results the you some with quarter. So and

be today, changes References I'm ago. to the market volume period to are or to reported the of ending is year IRi October I'll As refer for it I When price X, referring and XXXX. XX to for always, is October in period ending X, X the weeks versus QX, corresponding referring the quarter data, information XXXX.

snack Walmart, sales our total we IRi. recipe, food, Unless drug, on We the distribution. otherwise with per of term velocity look average military nut and at definition, definitions price the referring segments refers outlets. are to based other point Breakouts are and category which on to we IRi's And custom U.S. conjunction mass, the discuss produce pricing, and specified includes developed pound. in of per the when

up down total in volume pound The in in saw trail and QX. mix in pound last rate in and grow category This QX, subcategories versus year dollars. to only same prices volume types recipe is dollars nut the and declined in the trail we were X% prior the subcategories QX was all the almost while increasing. mix nuts All nut X% category with Overall, across quarter. X.X%, were

cover will saw in in starting was more and in is segment I better The each than down nuts. This sales. nut depth, we recipe with recipe dollar Now segment performance slightly X% up a sales in X% QX. pound

the versus last year. reminder, through a home. cooking of growth As by has more seen were driven Prices the pandemic, baking at recipe X.X% recipe consumers nuts segment and significant up

pricing dollars leader. slowing by Our driven brand the channel, increases driven grocery at declines and Fisher's in Fisher X% performance by lapping versus branded baking last higher the pounds. dollar and mainly in declined distribution home. Fisher's mass. Fisher were flat a cooking in was by X% Velocity offset year, at-home resulted in and share in performance and velocity grew remains

turn we Most snack snack This sales. decline pound segment the saw In declined nut sales macadamias in snack the with QX, X% and QX. nut nut and to segment. let the is dollar types peanuts, Now except consistent in price. in type, me dollar X% pecans see faster Peanuts, gains while X% share, grow increasing than category X% pound the Fisher the continues in continued category. absolute in and nut lowest-priced dollars declining gross the greatest the pounds. to in in to increased and

in line pounds, drive X.X% dollars strong up growth, gains. by continued to this The Oven X.X% up Never Roasted in distribution and driven Fried

drive the in better-for-you for at look this across results velocities sizes we continue Roasted committed against We to our Fried building further continue lines as are to consumers to line. good value. strong Never Oven and see large distribution And a snacks

Prices segment trail in slightly in than down greater snack and were pounds. and X.X%, mix X% The quarter. trail last mix X% the up QX in up dollars of was

up in X% the X% brands Our in be drive Style competition given growth, brands. continues category Nut dollars than declining in Southern velocity to Private to to our in and QX. softer mix trail brand slowdown mass category, grocery pounds X% and channels, dollars from continue the due private increasing in

is declined and volume last saw produce QX. flat in we This in pound QX. in the sales in Our performance better X% than segment, nuts, slightly dollar was

brand, offsetting driven and grocery Our dollars in declines Valley produce in distribution strong in X% Orchard sales, by performance the Harvest, nut XX% pound declined channel. in mass,

the success model and talented closing, smart a for requires business of In requires sustainable associates. also right strategies and committed It growth. team

all demonstrate we shifts the those elements at the the No strength business. with success will record face coming quarters results our X years headwinds past and have and supply labor shortages, We doubt, the here behavior. challenges in JBSS, of over inflation, further chain in consumer of

headwinds, the through in the strength be our volatile place to to the financial people, brands, and processes, company these these confident our the have I'm expertise navigate we Despite times successfully business. agile grow the and

create business consumers. in that profitable, back of lines we'll participation the value exciting and relevant, steadfast our value-added all company. commitment services shareholder call, our 'XX for new on dedicated fiscal customers launch products employees team the provide half to management in The in working teams have appreciate you We Our our product plans develop a to your and are your interest beyond. and and and thank that and

all been has key questions, Before mentor, been of would Valentine, leader President, a and organization and in Mike call a and and to I has good the is retirement. his our has like thank success He He will huge is last Group his friend. in personally Jasper on tough continue company. as I the over the call I times of through amazing turn since some and for cousin and CFO, with wish some part XXXX I the stood want to commitment times, Board, him who his along Mike the an side the appreciate a Director company. but my by this best earnings Frank to

Michael Valentine

Jeff. Thanks,

Jeffrey Sanfilippo

please open queue now first Operator, the call up the will We to questions. question.

Operator

[Operator Instructions]

Jeffrey Sanfilippo

a Mike ask should Someone question. hard

Operator

Instructions] [Operator

back now There Jeffrey are to like at conference remarks. to the Sanfilippo no questions for turn this I time. closing would Mr.

Jeffrey Sanfilippo

for Thank thank in day. JBSS. a Again, for This interest Have first of you, results. quarter our call operating Mikey. the your you, everyone, fiscal XXXX great concludes

Operator

concludes participating. again, Thank today's all Once call. conference you for this

You disconnect. now may

John B. Sanfilippo & Son (JBSS) 2 Nov 222023 Q1 Earnings call transcript