Earnings call transcript Q4 2023

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Operator

Good day, and thank you for standing by. Welcome to the John B. Sanfilippo & Son, Inc. Fourth Quarter and Full Year 2023 Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

to Sanfilippo, conference CEO. like speaker to now Jeffrey today, would hand over the your I Please ahead. go

Jeffrey Sanfilippo

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

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

JBSS the financial earnings to organization year inflation in the last share navigated respond and report as work to the year-end we to operating strong diluted a of hard validate our fiscal elevated results execute This levels the pleased record XXXX per faced months our XX during These through a to fifth fiscal actions challenging the consecutive environment earnings. taken headwinds is is for the a year. the delivered performance and we across and testament delivered strategies. to numerous has record I'm

goal an our the be dividend second will offerings We unrivaled. raised determination important which special without half a product with year. dividend of strong towards annual members and our on during are share diversifying our both performance of XXXX. our not our conviction, of also This talented whose team annual dividend per supplemented by of the be per achieved X.X% September to and would agility fiscal milestone JBSS $X.XX share, possible XX, $X.XX paid

new product product brand nutrition a private partners. our a line of bar number to and this sold key $X.X retail over of million We of bars launched

and been an their retail have point. great received customers who by price well a partners product at our enjoy attractive nutrition Our bars

grow We have customers gain a great additional private momentum as in to nutrition our we brand subsequent quarters. to distribution and continue expect by

proud service to and I'm who our quality, materials, absolutely freight, and company our were their and to product faced associates supply tired customers service expanding levels. we succeeded maintaining in innovation pricing Their remarkable. raw quality portfolio. the and consumers and dedication with chain commitment so and cost on the our Despite and best-in-class labor we still is challenges competitive of across

These are results and to customer underlying our achievements These the demonstrate resiliency and trust testament business the partnerships. model supplier also the the fortitude a strength of people of our company. our depth of of and mutual and commitment

we quality to and manufacturing achieving record reposition in and service, maintaining also them. reinvigorate and we and invested and addition results capabilities, to innovation new people, in In brands our invested best-in-class

with Looking strategically ahead exploring capitalizing to of brands, volume brand our are acquisition success partnering fiscal in also accelerating bars, investing private we our by growth strategic on brand XXXX, nutrition focused private our and our opportunities. customers on key the

for continue can deliver results of we value Plan. through strong confident Long-Range shareholders We to execution operating create our are long-term our and the

path There a clear business. become on are billion to goals $X three our

to bring extensive and invested we insights to private value-added price consumer products, solutions in business consumer portfolio excitement we And our needs. snack in based manufacturing sizes develop to products snack innovation that changing our customer through differentiate meet and First, points brand expertise, heavily that with on the and category. our invested develop delicious industry pack

Number two, brands our reinvigorate distribution. crack and the JBSS code on

resources Orchard we that current Valley consumers products and to new Harvest channels. this, and brand time example Orchard year. carry Fisher, on launching business focused past branded are and our across One our alternative and Southern growing this of our locations We Squirrel reaching Harvest, Valley by expanding allocated roasted significant

OVH partners launched team new the creative and new have can country. look for position brand marketing and outlets social our a a recently see fund around across and developed media The campaign you

Another hard thousands noncom our worked United to our expand and OVH throughout for distribution Fisher locations foodservice team, of is example States. which to the front-of-house

diversify accelerate growth. portfolio Third, the to

snack We and for Cheese spreads on offerings past cheese OVH snack focused own product on mixes are also category energy In reach by our this product Just cheese into tasting of product provides We're nuts expanding as our year, done acquired business. our the we've Chickpea company, beyond distribution the which line. bar mixes. the working the and amazing entering we expanding

the We help to current will accelerate acquired brand snack private our portfolio our category and in with the offerings our Cheese as the branded to capabilities growth production Just brand add are customers. foodservice excited it complements and

Our is and food we on is are about creating the people and brings JBSS executing mission that mission. nurses planet, nuts real protects joy, this

an and and our among we where more groups, recognize and provided resource a stronger JBSS talent continues employee supported business of our celebrated. council and component The recruit, is diversity. critical differences committed The and training inclusion are inclusive successful to our and that success, maintain and is initiatives. JBSS Human by diverse our workforce. is company expanded foster diversity employees promote a if DEI oversight to our environment enhanced diversity, equity

being its resources. to of stewards good is planet JBSS and committed the

our to our for reducing usage and which switching XXX% include baselines environmental our for film composite cans established reducing of goals team use this footprint, preparing carbon ready year, and ESG PET. Our recycling

of growth and goals ending security, to and farmers support Lastly, the committed of betterment social educate and JBSS food sustainable next associates. generation to assist is the our in on practices

call to I discuss performance. Frank over the now to financial our turn will

Frank Pellegrino

to net compared a customers. fiscal Net as statement. fiscal which and due quarter compared sold with mainly X% the year the for XXXX. current decreased Starting million an the volume, week $XXX.X XXXX fiscal The fiscal income Jeffrey. define quarter additional to contained pounds sales period in of $XXX.X sales fourth million our you, sales quarter net fourth in the in sales same decrease to The for Thank to of X.X% XXXX was fourth decrease to we of XXXX.

decreased net decreased fourth sales a XX.X% X.X%. channels Distribution the Sales of X.X% decrease our sales in all Consumer to Excluding for in decrease our extra sales Channel, products. quarter. current the volume X.X% distribution approximately estimated in impact due brands for primarily a volumes the in volume volume decreased three week, Sales and the private in branded

The a business week, merchandising mass by by private and butter partially impact in new the mainly decrease the Channel the offset extra Consumer which the in volume Excluding estimated X.X%. brand volume was by sales increased peanut retailer. driven of was week, Distribution extra sales at nutrition bar sales

nuts, Fisher estimated decrease brand sales snack approximately Valley sales of volume our the volume private week, in Excluding customers. includes of Southern grew impact extra which for decreased and the Harvest by to Style promotional Orchard a Fisher volume major was the due recipes decrease sales two products, nuts, XX.X% mainly snack Nuts, to X.X%. Fisher branded at nuts attributable The activity

due Southern sales volume reduced customer decreased club a XX.X%, current at extra activity with predominantly Style Sales promotional to for week. the the volume Nuts store associating and

from extra decreased which of was driven decrease ingredients by branded channel, extra sales primarily softened to week fourth products impact consumption volume XX.X% consumer the by of to in volume in reduced a Sales X.X%. decreased the and spending. in commercial the quarter X.X% food sales Excluding manufacturers, bulk week, the volume due the other

volume decreased week, this of Sales the X.X%. the Distribution in to major Channel the Excluding decreased extra Contract in impact by distribution by XX% estimated sales channel. a decreased Packaging volume due peanut customer

by volume impact the decreased extra XX%. the of sales estimated week, Excluding

expense from partially million to minority quarter percent costs sales of for increase XXXX. a fourth compensation was The due profit marketing Total offset expenses operating in The peanuts. asset in offset the sales Gross year for tree to quarterly impairment profit increased total to mainly the million a net expenses. gross quarter nuts, the by of while XX.X% on XX.X% in and These major an expenses million, mix, was comparison compensation a to disposals. to lower fourth lower net percent current expenses a were XX.X% which $X.X investment, the operating acquisition sales and of operating fiscal of the fourth loss compared by partially freight profit expenses in while was comparison to in acquisition increases to incentive as increased higher decreased increase gross X.X% quarter equity quarterly the operating of consulting as sales for total related increased in net decreases all $XX.X due margin increase a base. for and The current net attributable expenses, in net due increase in costs of lower sales XX.X%. or mainly to margin $X.X was total

was levels. fourth of share fourth the quarter lower for diluted expense $X.XX $XX.X share. million from to per or million due quarter debt XXXX fiscal Interest $XX.X income to the average for $XXX,XXX per $XXX,XXX decreased or to $X.XX of compared XXXX Net fiscal diluted

at Now value at take total at a The end the the compared of of on the inventories XX.X% end fiscal year value million all to in XXXX. decreased total higher $XX.X major peanuts materials. due This other quantities The decrease raw of current the costs goods acquisition inventory. for and hand of to finished look decrease partially or fiscal for offset acquisition of commodity work-in-process primarily costs and was by lower tree inventories total was nuts of value inventory. and lower inventories

commodity lower weighted acquisition the raw average pound the nut hand food of quarter decreased cost end of costs, of XX.X%. at input a the As and fourth on stocks result per dry current

in fiscal sales in of the due a attributable X.X% per contract was the net volume to sales channels. XXXX to decrease primarily year-to-date was the consumer and weighted sales average primarily Moving price results. X.X% decrease to which partially in offset to The net as increased X.X% increase pound, $XXX.X XXXX by $XXX.X net million packaging sales sales volume, million. selling to compared in Fiscal a increase

contract extra sales primarily X.X%. week, in the by impact the increased Sales X.X%, estimated channels. due decreased of and sales net Excluding to decreases consumer volume volume packaging the

the flat. sales volume was the estimated impact Excluding extra week, relatively of

facility, million, before the Total profit X% which million compensation; increase reasons were $XXX.X increases operating sale as expenses margin well partially nonrecurring addition, Garysburg, approximately by expense. from to for occurred as Gross gain first primarily profit fiscal in North cited quarter our in due base in Carolina XX.X% XX.X%. slightly to for a increased increased from current These $X.X decreases year $X.X XXXX. million increased $XXX.X the fiscal gross fiscal the offset to to of XXXX freight of of and in the million, an

Net or for fourth details additional share $XX.X regarding our $X.XX diluted $X.XX fiscal to $XX.X XX-K, the for refer was per filed financial Please million our diluted million per yesterday and or to income share. XXXX was for compared fiscal which quarter XXXX. performance

over call the to Jeffrey category to operating results for turn additional now will provide quarter back and discuss trends. fourth I our on comments

Jeffrey Sanfilippo

Thank you, Frank.

For the some financial update, quarter. with results the and I'll category for now brand share you

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

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

last and consistent The price is This dollars Overall, with increases in X% mix to per up across pound quarter. with category pound the X% and QX total down in volume versus trail prior continue year. rates was in X.X% saw in category we QX. the moderate price nut the down

QX. in For prices X% up reference, were

down starting Now performance year, declines. QX segment depth, in with price slightly X.X% nuts. X% than performance. in better of nut nuts recipe pound X% recipe last down sales. saw by worse This in we'll pound Walmart cover each versus The segment recipe we dollar in and by were was up driven dollar sales Prices more a is

another had in XX% brand quarter, successful Fisher pounds. Our dollars and XX% growing in

Fisher's Fisher's in performance resulted leader. growing primarily branded share driven by distribution in dollar X.X grocery by increased channels. and performance points mass was and the remains the

performance In snack the me and snack is dollars pound in in down QX, QX. This nut worse we let to segment in slightly X% X% sales. down the Now than saw the segment. turn was

we largest Pricing nut are and our with continuing Fisher X% continues nut pounds. to up X.X%. than prices dollars competitive within brand, type the performed pressure. peanuts, and significant stabilize the category snack in the On pricing category, worse to XX% snack in in promotional down see

by to not category. profitable growth devaluation We and are the contributing balancing response peanut of the executing competitive our

Fisher pack towards larger sizes We've distribution snack looking are lost value on as also smaller consumers packs.

strong the across results continue see Roasted Oven We in sizes. large to line Never Fried our

We up saw X% build drive and are X% to in on this in was and mix continuing line. velocities in segment the down trail QX. in consistent pounds and QX, we distribution relatively The focused performance against snack with dollars

Prices the last X.X%, less slightly than quarter. of trail mix up were

resulting Our growth brands Southern pricing the declined mass. and Style continue competitive as Declines XX% brand by distribution. were in lost grow X% pressure Nuts to dollars solely of The up to in in the brand channel dollars QX. mix has in driven Private X% increased pounds. and category continues club trail in in drive

this X% we with pound QX. dollars And in X% is declined in in volume saw nuts consistent produce segment, last performance QX. and the Our in

nut in pound and in driven distribution produce mass Orchard at declined brand, Harvest, by a XX% Valley dollars sales, declines Our XX% retailer.

the started into market and and products now. relaunch the this of have with repositioning brand We flowing

enter In snack closing, see JBSS business team our management and to great and segments. bar new build We future. are members opportunities about excited all the our

are Our by recipe nut urgency and another for in chickpea strong teams expand brand Valley positioned Fisher category, well Harvest working of mixes, recipe marketing successful and distribution our salad holiday of is the Orchard supported sense #X toppers season, to with programs. the chips a brand, sales

This for have We a inflation, and do several economic rates downturn. impact which in challenges volume. potential includes the level, interest the on the on behavior may an future consumer negative sustained and face consumption higher macro

tightening employed at continue steady may for the the production our lead to addition, labor In in labor market those facilities to costs. increased

to invest strong talented considering marketplace. we what a is changes we across year, to do in was matters in organization, have dramatic and our people them results. the especially drive success most possible 'XX the Fiscal This because

continue strategies, executing our our and to our customers cost are structure, We brands our in growth we our to for create improvement value optimize processes projects and throughout and and serve continuous implementing the company invest to consumers better shareholders.

call, the We interest in appreciate thank the for in you company. your participation your and

open questions. now up the I'll Abigail, to call

Operator

[Operator first question comes with from UBS. Ambrefe Our Daniel Instructions]

Daniel Ambrefe

my in label -- was one, I've looking acquisition first of call. mentioned at of or private got side beginning you I of branded kind the if wondering you're the your more opportunities the pipeline looking your see do And be you'd you how a how size your And deal do now? large is? what business, balance you clean given would how at? how valuations, is right sheet

Frank Pellegrino

Thanks for questions. This is Frank.

healthy We're twofold. our snack, volume. and capabilities looking we're looking bar, our into the at channels distribution is strategy M&A always accelerate smaller Our at brands within brands also category, And relatively could in-house. brands really snacking we sales where those crisp increasing capabilities, bring

here we at have two So strategy, two-pronged looking we're a satisfy those always to opportunities one strategies. and of

Daniel Ambrefe

on And And do terms little maybe helpful? that continuing usually I Do commentary be that? competitive pressures Okay. can QX? give give long anything Great. more And in peanuts. could those wondering see context if you How pressures competitive a in mentioned club forward you last? also you was would in of primarily going bit and in just you

Jeffrey Sanfilippo

question, Daniel. actually Yes, spending Sure. seen we've year, the Good by the last largest snack in snack -- we've brand category. in for the nuts increased

peanut to the So of in trade price valuation just and the just about comment is reduction extremely I call that the continue category for point in the heavily. aggressive lot they reductions. a the to spend that made attributed and their

unprofitable points. those And it price try so some point, at to match to some becomes of

activity and nut in with increase category that brand, in brands some snack that monitoring in major investing And volume there's areas so But situation. been of increase growth. And try to competitive definitely, the the category. one other snack we're just to we're the

there's the the great the category. club really wins As as in just exciting huge some We club Valley huge company. Orchard the a far channel. we've think much for snack club a opportunity. got that Harvest And volume, products It's recently. launched of channel, couple differentiated with salad is so always toppers, We've got which a channel is competition a good we've our

make on price sure the with just to right point we right profitable consumer. that we're club so the there product for that's need focused the And putting

Operator

further I Sanfilippo [Operator turn at back time. questions call Instructions] closing would to Jeffrey for I'm showing remarks. like this the no to

Jeffrey Sanfilippo

your you, the your Thanks, and time. in JBSS everyone, your Abigail. Thank for call day. interest on and participation appreciate a great Have

Operator

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

You may now disconnect.

Jeffrey Sanfilippo	Chief Executive Officer
Frank Pellegrino	Chief Financial Officer
Daniel Ambrefe	UBS

John B. Sanfilippo & Son (JBSS) 24 Aug 232023 Q4 Earnings call transcript