JBSS - Earnings call 1 2024 | John B. Sanfilippo & Son, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the John B. Sanfilippo & Son, Inc.

First Quarter Fiscal 2024 Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. like the the CEO, now your over would today, speaker Jeffrey I to conference hand to And Sanfilippo. Sir, please go ahead.

Jeffrey Sanfilippo

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

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

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

delivered costs corporate execution XX.X% growth invest our per which in first overall diluted earnings fiscal We consumer decrease in control for the initiatives resulted quarter, sales category accompanied as a with confidence, in to in and performance. share a plan volume. challenging increase our nut 'XX by and in softness was our a of Starting

which our We in sales product marketing significant investment quarter, relaunch X.X% to Orchard a line. Harvest reimagined for Orchard a brand Valley the volume first investment increase Valley year-over-year in made the -- resulted Harvest

products are social innovative Although teams through to hard working and media difficult our environment brand our campaigns. in new brand marketing we gain programs a are and customer in the sales and differentiate category, distribution and snack creative

in in We will purchasing as consumer to preferences. growth we opportunities changes invest strategically continue monitor

our inflation merchandising not effects year. the face distribute our and distribution of balance to sell value-focused innovative to the signs holiday seeing operating including that and which we expand working dollar the as to environment, season sizes, but club this continue retail retailers stores, With we of all we environment are stores the channel products throughout such to, today are to and respond mass as club fiscal we in challenging shifting we with hard of more retailers, teams approach pack or currently consumers and and the the dynamic especially of inflationary

company aligning supply with the costs to focus selling optimizing and chain addition, continues on maintain our our efficiencies, prices. manufacturing In a

dried enter this costs we tree harvest year's season, we pecans, As including nut pistachios for and and stable almonds, food ingredients acquisition macadamias. anticipate cashews, nuts and most

concerns of costs export of to We peanuts continues result butter to 'XX the in year a crop strengthen expect remains for increase demand, crop. the continued crop as And also new quality the of as the strong. Argentina and peanut poor acquisition in market very usage

people, In continued to capabilities the in our foundation current to future growth. quarter, we lay brands production, invest the first and for

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

While this expertise. economic are face our and on customers in with nonbranded solutions long-range industry extensive based headwinds plan executing by we our our consumer providing value-added times, we

become example plans of billion bar into we executing recent acquisition growth how and long-range the business a great Our expansion a and are snack to energy our is company. $X

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

to product acquired Just to last which are of previous example Cheese December the our about retail provide another and we It our in year. portfolio brand, how expanding the customers value more talked In consumers. I've calls, we of is

and a at expanded e-commerce. a have is we it major in small brand, retailer While distribution grown grocery

the buyers The savory offerings. solid with acquisition with growth expanded front get to our product production opportunities in and double-digit experienced product we quarter, line new sales we our and topping to can teams provides add crisps past cheese the our the of mixes In brand. a capabilities, also differentiated

and the for the It group smart model requires organization. Success committed right leaders sustainable a business strategies of growth. across talented also and requires

all success have these at JBSS. elements We of

to and value. have will proud worked am our our who leadership commitment all operating am tireless unwavering. maintain times I team company over create drive our and optimistic whose consumers initiatives in years strategic strong service X and past challenging would like levels to through every exceptional I and our members investments quality. to thank I to this person our continue results of long-term customers and is the stockholder

provide information call to for Pellegrino performance over our financial our quarter. I Frank first fiscal additional will the on turn to now Frank?

Frank Pellegrino

Thanks, Jeffrey.

we our quarter. acquisition. were Bar the at results reminder, Therefore, by not first a of completed the second quarter impacted materially beginning acquisition Snack As the

Starting sales the in mainly income due X.X% net Net the a is the defined customers. of X.X%, XXXX was to quarter net pounds fiscal to as of statement. quarter million decrease for first fiscal first volume, sales $XXX.X $XXX.X compared in XXXX. sold The decreased with decrease sales for which to sales million of

Sales by two volume for and in merchandising distribution promotional retailers. due peanut private decreased fewer volume X% to decrease a programs as a mass decrease brand in seasonal sales sales mixes volume lower consumer well and X.X% for in sales, channel snack as value sales the at trail driven primarily

Style the overall snack branded nuts, nuts, in Fisher A volume and Valley products volume contributed for in also includes consumer decrease XX% Southern distribution channel. which Harvest our sales to Fisher Nuts sales recipe Orchard decrease the

at a timing mainly in sales volume nuts merchandising in pricing product a for sector. holiday mass sales decrease of a Fisher for was to Decline snack due in orders branded line and discontinuance customer competitive XX.X% nonfood volume to the increased a sales attributable the retailer pressures, of

promotional quarter a for onetime order in the programs Southern our the did and another distribution at due in that customer. grocery Style sales customer. for Nuts volume at not volume decreased from club of to timing holiday mainly quarter XX.X%, store a and year current reduced Sales XX.X% decreased Fisher existing orders customer for fiscal prior recipe grocery an Sales of same reoccur

due oil the shelling X.X% Sales processors, produced decreased due of in in to volume to quarter. the crushing a ingredients which decrease channel XX.X% fiscal current reduced in peanut to peanut stock sales was volume peanut commercial

XX.X% major Sales for peanut channel, primarily volume decreased of orders decreased timing customer. a packaging due holiday to sales and distribution the in distribution contract the

efficiencies profit of XX.X% $X.X margin increase XX% fiscal volume. peanut to increased first for of sales from million quarter decreased costs commodity XXXX. gross offset by The or in Gross percentage all of which partially and as XX.X% manufacturing costs million the was acquisition for primarily $XX profit to lower margin to gross was first nuts, the acquisition major XXXX sales higher in quarter tree fiscal a increased due and net in profit peanuts,

for in gross decreased all driven tree partially increase by offset by acquisition major lower also was volume. The costs nuts sales and profit margin

Total due operating partially comparison expenses which charitable to and and the expenses by the compensation for offset expenses. was freight quarterly increase quarter in incentive current food in a advertising first $X.X million an increased in donations, decrease

a current Total from increased the and sales to first first expenses before XX.X% to I sales for from quarter operating net of reasons XX.X% net cited the year's base. quarter lower last due

XXXX first $XXX,XXX due for current the from quarter fiscal first $XXX,XXX to of quarter the for debt decreased levels. to expense lower average Interest

of per per diluted $XX.X first XXXX quarter fiscal of or compared the for fiscal $X.XX Net income share the first or million XXXX. quarter $X.XX was share diluted to for million $XX.X

acquisition total in offset decrease at value Decrease for early the costs of inventories of million end decreased by quarter nuts inventories for the higher hand the the Now due partially lower current the first of I'll on and of all value at in a quarter finished take of shell This hand. on or XXXX. the Total quantities first fiscal pecans, goods process a on look $XX.X at pecans tree major was primarily of inshell inventory. lower X% of and total quantities of end was hand. work to out value

of weighted tree and by lower dried cost nut which all per partially X.X% was of nuts, pecans. quantities major decreased pound fruit input The hand costs on due to higher year-over-year, stock for average mainly offset acquisition on-hand raw

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

completed million for bar end the our September was funded from the the of on TreeHouse After $XX which XX, unit we cash, snack facility. acquisition of in approximately credit quarter, the

account The acquisition business. the relationships. of Lakeville, We credit capacity increased working bar our in a customer Minnesota, facility borrowing short-term the capital snack to manufacturing for facility also included this acquired of and inventory requirements

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

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

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

Jeffrey Sanfilippo

Thanks, for updates. the Great. financial Frank,

the of significantly TreeHouse capabilities accelerates the retail of acquisition the mentioned, partners bar snack This we now offer and broader Frank have diversification completed portfolio private business Foods. our product bars. strategy a our transaction label As we to from snack

by sales and business and in new TreeHouse are business internally extremely had half optimize department fiscal clear complements own This doing strong of job. who I extraordinary back developed path managing quarter. exceeding which operation our $X.X They nutrition accretive 'XX. They a to program bar an of hard million this JBSS the the working the so developed the efficiencies proud the and am of make leaders first are the business. plans to integration have bar create

company. with joining a spend our had to chance time I the [indiscernible]

to in profitably the of Minnesota to the snack growing fortunate together. group bar are forward facility, and We have a look people business we strong dedicated

to Now category I'll updates for quarter. turn the

QX, of information reported XXXX. As refer XXXX. and to quarter ending weeks for data, September today the I'm When is ending always, is Circana be to to September referring XX XX, XX, market period I'll referring I the

References volume X pound. maps, we price at ago. otherwise and on we pricing, food, definition, the look outlets. Unless Circana's military includes year other category and are or average drug, referring which corresponding per to U.S. specified when versus total to price period discuss changes Walmart, We the in are

velocity custom Breakouts nut with snack point are based conjunction refers definitions distribution. on developed our Circana. segments of term in the the of and per The sales recipe, to produce

significant behavior, quarter, snack shift in we in nut the not categories, just and consumer the In a trail in the but broader aisle. latest saw

the volume seeing uncertainty, as declined to future their era ending entire snack COVID food student across loan benefits QX. grew response and snack dollars X.X% aisle tighten volume prices. economic aisle high in the are SNAP and declines in budgets X.X% in suddenly consumers in We and

XX% Overall, in in QX have rate total QX. The dollar saw decline what decline X.X% pound price per price from and we in down was growth This quarter. down and the category the X.X% up and down versus in volume is versus across year. prior pound category increases a with in nut last is dollars 'XX. fiscal trail X% volume moderated mix This X.X%

high. is the pound close a While to per still prices have price stabilized X-year

X% walnuts down in in Now I and will down Prices in Recipe versus with the depth, cover we with up of each recipe segment The X% dollars consistent more year, was and is nuts performance driven starting XXXX. Nut by in This last were Recipe of pecans. Nuts. pounds. saw X.X% QX segment

Our had and points the mass resulted remaining X% brand channel. successful Fisher by brand growing share and in primarily dollar was XX% in dollars in X.X and performance increased another in velocity driven growing Fisher's Fisher's performance by the [indiscernible]. pounds. quarter, distribution

QX, let slightly in In in with the dollars Snack we Nut pounds. continues me the Snack Pricing segment. Now XXXX. QX is stabilize in X% up to worse turn prices This just in down segment down saw X.X%. Nut Nut and category was to of Snack X% the than performance the

in are XX% response, see expanding sizes on focused down loss pounds. in performed softness the in pack lost results we Never larger and distribution as significant consumers Snack small on but category, mass our are Fisher snack with sizes We've distribution the Oven channel. line. In in continue This channel, velocity Fried looking XX% combined was to the value multipacks, a Roasted dollars towards distribution the driven peanuts packs. on in grocery Fisher in and we of strong by worse larger

X.X%, X% saw than slightly segment we less The in Prices Trail Snack of than pounds were and worse mix last the performance in Mix quarter. of QX trail up slightly and dollars in in up 'XX. was QX, down X%

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

slightly segment, pound X% worse of X% last declined the we QX Nuts, saw in dollars and performance in Produce 'XX. QX, in Our in volume than

overall sales retailer brand, declined and in distribution Produce Our Nut category pounds, Valley a mass Orchard driven in Harvest, declines XX% at and dollar softness. by XX%

into the flow We and and awareness product are market driving trial. are new and seeing packaging focused on

our integrate seek branded of ahead critical same year, facility priority continue our looking recently manufacturing grow to that closing, remainder to business, operations. and opportunities snack In to its we consumer is bar is time, label At fiscal optimize the acquired our successfully and key nut private it the profitably the business. to

headwinds grow and the pressures are and shifts our with in confident place the through consumer brands, headwinds, volatile people, navigate these successfully and category. declining processes, Despite agile a competitive No nut doubt, company facing expertise the ongoing business. be the to the in we these pricing have times to financial behavior, we strength our I'm

employees work to like for team amazing together Lakeville, our would thank as deliver shareholder welcome new the their we hard-working to long-term I our and value. all Minnesota, and dedication to family

relevant, develop to products to and you and We consumers. profitable, provide for that All of the shareholder customers and business our participation our company. in call, steadfast plans in thank us commitment value appreciate services your interest value-added create and have a your

call We open now will the questions. to

Operator

Our Instructions] CWB of first will from Nick question Wealth. [Operator come Otton

Nick Otton

I just had question a the on starting acquisition. off

So same of kind I perhaps overall margin was the profile and in say business? I once integrated it's have XXXX, it fully will the as wondering

Frank Pellegrino

point, albeit in Thanks, margin overall early But gross operating be be business. question. margin of our may this process the with the consistent margin integrating the We're Nick, would for different. still to expect at your I

Nick Otton

going much like can think from Target deepening relationship And then more this generate with largest your revenue potential, on suppliers, off forward? like and the this you business Walmart how you

Frank Pellegrino

this to XX% years. or XX% business X the grow by over think could X we next I

Nick Otton

more club And the then a I there, so just of was growing channel. following in for how big that is the up, one just And you? on just talked looks wondering what like channel you've opportunity there? about

Jeffrey Sanfilippo

Nick. Sure,

a a So for competitive big really today. channel. channel us It it's not is

Style there, the of retailer, distribution program major a some and in huge and channel, but it's Valley couple we of Southern of Nuts have a in have at We some one then Orchard Harvest with divisions the opportunity. the

market As to the of channel club in. should economy, an we be see situations shifting important consumers it's we that of result channel -- need just the participate participating to a and such as I

focused for to develop it. the successful, trying on are to of proposition products, to hard a So business we we're working it's really right but right channel build small that piece but value our be today,

Nick Otton

for stood Foods And their they've and increase then and their is a they've the changed Day for out marketing had Planters Hormel Xx seen it, Investor in that one ROI they said the marketing.

any or So changes I towards was business effect shift wondering, your potential has loss? share there market been with

Jeffrey Sanfilippo

Sure.

competitive been awareness -- a very increased and They've past great actually programs has Hormel marketing So their making marketing the Planters they've brand extremely brand, strong. year, done with creative. been the almost entire are for spend, their the job

item. branded a prices like space. seeing seen label also on offering have retail our for the private line, you're in private impact, we So label cheaper the some both than some for product point, but Planters At

consumers of competitive to result their some shift that points. pricing a So brand as

Nick Otton

a this situation or with... Is pricing is sustainable for TreeHouse like that Planters

Jeffrey Sanfilippo

Good question.

I'm so as Just program. surprised investing much they're far along tactful, discounting. It's the to very in and competitive this deep be

Nick Otton

time? loss And the just and I and drugs then just with Ozempic thought that other the drugs. just think wondering around one just what Ozempic over and was you you weight all loss buzz last evolve and nut this relationship around guys I'm weight will about how industry have had do

Jeffrey Sanfilippo

Yes.

an tell. We impact it's haven't time seen -- will that's yet, and

have to on I specific before kind Yes? Have of It's too going impact seen on see nut other see it impact you what to categories? just impact this be point. think it's while we may at the a category. early any

Nick Otton

nuts just only is table seen it nutritionist pounding actually the for I've is every is to so The because calorie Not consumption protein really much. so for one high.

So I for there's wondering if positive even was a maybe just you guys.

Jeffrey Sanfilippo

the that's case. Well, hopefully, see. Okay. We'll

Operator

for Instructions] any [Operator closing in would seeing am now Sanfilippo to to remarks. conference further queue. like the Jeffrey not back I turn I the questions

Jeffrey Sanfilippo

to JBSS. want I Again, the day. great operating concludes of ]. interest everyone Chris quarter your results. for fiscal our for first call Have [ Thanks, a Great. This thank in 'XX

Operator

all you participating. conference This today's Thank does conclude for call.

have and disconnect, now pleasant a may You day.

John B. Sanfilippo & Son (JBSS) 1 Nov 232024 Q1 Earnings call transcript