JBSS - Earnings call transcript Q3 2024 | John B. Sanfilippo & Son, Inc.

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Operator

Good day, and welcome to the John B. Sanfilippo & Son's Third Quarter Fiscal 2024 Operating Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded.I would now like to turn the call over to Jeffrey Sanfilippo, CEO. Please go ahead.

Jeffrey Sanfilippo

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

XX.X% Forms call have me make are to impact the our $XX.X quarter to these business.Looking and Frank XXXX fiscal SEC today. more to million third On uncertainties. to with various statements explained current and million of Pellegrino, approximately made, COO; Sanfilippo, increased These We refer that our encourage XX-K over that involve risks filings increased I'm our volume in the and and expectations or uncertainties results, our are filings The report and net and the or CFO.We certain third our based learn in factors quarter XX-Q. sales results sales may about acquisition are some fiscal over including by they Lakeville XX.X 'XX. statements quarterly inherent of these today forward-looking we XX.X% on is quarterly risks Jasper negatively could the happy that by at pounds you

chance developed snack our from our sense worked become quarter, team to bars during all of urgency our meeting continue facility. operations the have just progress has to passion, and in own Elgin, of tour is service nutrition personally strong complements in made bars improvements. to the I to produced of operating so elevated Their also team third plant. a part environment and customer optimizing safety, the to results. in our quarter proud operate Lakeville our with that the in distribution in Directors internally to approximately cautious continue Board Lakeville.I'd our our a the drive and which an quality, am in JBSS who sold officers fourth company to million is had integration channel management and schedule.We $X.X manufacturing facility remarkable.Even consumer where optimize This now like the of employees the we significantly of and selling of The expect dedication, thank though Illinois to family. Lakeville the initial consumers, are it of prices in upcoming Lakeville, income commitment currently we the Our who retail operations held great accretive ahead in delivered

Our brand X consecutive of volume. private quarters reversed decreasing business sales

and volume and many continue X chain created over a our our private of we cost and country. private strategies, decreased to company represented QX across offerings. While year, optimized branded seeing our 'XX, we brand our our quarter, headwinds, to in time we inflationary structure improvement a brand supply last customer a challenging other decreases to significant product our these capabilities for a new gained time, retailer. have strong quarters the Since started In first shipping major as momentum retailers that see sales products.This last our signs Despite environment. we the started over branded business e-commerce at it the operating experienced major borrowers fiscal business expand at the of executed we

of on of dividend, XXXX, will stockholders June returning share be goal per $X by paid of to shareholders. our And our new expect feedback and to utilizing special shareholder additional approved our capabilities.Our opportunities Directors creating working reinforcing and customers favorable We yesterday sales our The we a of XX, value innovative to record subsequent in partners met numerous gain receive new continue on to XXXX. as May cash capital quarters. bar from dividend Board XX, are long-term

an our of shelf, of create as who members results share we improvements. expectations based ongoing Consumers and the excellence and team's and optimizing at of demand and without the Looking updated during $X in per retail to not to would performance a range operating there share, fiscal operational quarter.Our due ahead from the to to have because operations our reacted shareholders. diluted exceed for which the have acquisition strong continue Lakeville dilution direct year prices increased acquisition for third $X.XX optimistic Lakefield our team the be diluted our $X.XX to value result quarter prices. of to in Lakeville initially 'XX, now We $X.XX the the have about per estimated future possible dedication the contributions current customers results fiscal higher expected the the operating fourth current are we to on to been to and destruction talented

job Our insights trail has nut elasticities snack bar price an understanding and extraordinary and the done in team categories.

price achieved major are testing on these changes a insights initial significant We at based and retailer. success

continue categories building plans marketing to and includes Alliance the also allocating are consumers execute the due expanding call environment other partnership of our to entering programs product long-term OVH child to initiating are as is We positive monitoring a across this our such of to to now turn retail support over we bars, a products hunger.I'll This have on are most sales The current nutrition snack the with rebranded difficult market, packaging performance. Frank brand inflationary discuss with the portion strategy snack the Conscious transforming product and growth our assessing steps and to as next had pressures.While to trend end our for tightened year, to and help financial and new this the new partners.In and for innovative have distribution, Valley line. addition focus wallets category plan portfolio. price brand. with results company awareness, mixed their branded and brands trial Harvest we Orchard relaunched Last the our in

Frank Pellegrino

for for the include million Net approximately the Starting Lakeville third of $XXX.X third the to the $XX.X million fiscal acquisition. $XXX.X with quarter quarter XXXX. net net sales for Jeffrey. current or third of million statement. you, sales increased sales $XX.X from fiscal income Thank quarter deferred XXXX of Net the of XX% sales million,

Sales a major acquisition due per X.X% major to almost walnuts, is decrease whose volume costs which The third volume, by in Excluding $XX.X due was increased commodity which nuts sales for Lakeville all pound weighted exclusively as types the tree average resulted volume higher primarily weighted in bars. declined primarily Decrease decreased acquisition for decrease price or except sales the a distribution in on price for the was nut X.X% acquisition, pounds Lakeville lower sales with million partially consumer combined defined brand sold customers. in quarter. sales peanuts.Sales net in decline XX.X% average to X.X%. from commodity acquisition, offset is channel, volume costs the to all private

offset at sales foodservice quarter decreased and mass for volume peanut that distribution fiscal includes by Style the decrease distribution, offset volume in in distributor private volume at customer. attributable nuts, by and These X.X% retailer channel in in Fisher and the distribution of partially increase recipe ingredients and volume volume offset a at Excluding mass by channel sales retailer.Additionally, the merchandising a the Lakeville increased of consumer The and store impact commercial distribution Lakeville snack drug Nuts in mix for for volume nuts, pricing acquisition, a Valley of in at pressures decrease to for partially distribution and granola was trail in driven and X.X% trail at This at channel were Southern the nutrition sales X.X% snack to peanut which XX.X% sales distribution Orchard brands channel, XXXX. the which primarily mix Fisher butter by sales was to snack nuts The volume merchandising new X retailer sales in snack grocery and by was was decrease branded other branded a lost associated a acquisition. due products, competitive consumer a increased third e-commerce grocery to a products.Sales a distributors our butter sales loose new sales retailers. private volume volume due distribution partially primarily due decreased peanut our several Harvest, foodservice of the with decrease offset store channel Fisher increased our increase occurred partially lost brand was sales sales in nonrecurring business X.X% consumer bar butter X.X% volume. decreases and

channel.Sales Excluding ingredients demand. XX.X% the and distribution the cashew impact of and the by the packaging contract soft in volume Lakeville consumer acquisition, commercial decreased volume mixed distribution decreased due a sales to to due X% decreased major customer nut in channel

sales percentage acquisition. quarter quarter third the fiscal compared higher gross a decreased XXXX, related to the to XX.X% profit base XX.X% mainly to margin from of net as Third for of Lakeville net sales

commodity by approximately acquisition incentive margin. the production gross the profit, was X.X% to the or partial million increased date, for slightly acquisition to and by acquisition, gross $X profit due walnuts, impact the facility points to same Lakeville Excluding inventory and acquisition, $X.X noncompliant at of contributing reasons due approximately million a relating decreased compensation.Gross of higher in approximately margin XX impacted volume slightly was basis recorded release of due related reserve by and inventory, positively to which valuation peanuts $XXX,XXX maintenance, reduced decrease profit initially decreased expenditures Lakeville and repairs to which an the costs to

comparison, the the quarter X.X%.Total operating impact increased million million associated with Lakeville third of the the Lakeville or quarterly $X.X expenses gross $X.X decreased related of directly acquisition. which approximately million to acquisition, Excluding profit in the by for $X.X expenses current operating

partially the the advertising mainly increase and due in was which reasons and increased sales XX.X% expenses decreased in Lakeville acquisition, sales to the offset third the total operating due incentive cited expenses last quarter an year's to operating base compensation, decreases third acquisition. net higher for quarter, by Excluding current XX.X% due a before from freight Lakeville expenses.Total of net million, in to $X.X

of as at net fiscal to XXXX increased third sales Excluding the the primarily XX.X% was end higher the $X.XX of third the the average of million diluted $XX.X current of base. per debt of reasons of XXXX.Now net look The income Lakeville expense quarter for the the the inventories quarter and before Lakeville XX.X%, million additional fiscal the at Interest from total due operating inventory increased $X.XX a lower due taking hand to a due or or third a the associated for Lakeville impact $XX.X diluted third acquisition. per for expenses share XX.X% current $XXX,XXX on to share million or percentage of quarter $XX.X to cited fiscal inventory. XXXX, to to the for acquisition.Net million total quarter of increased quarter mainly $XX.X from the acquisition, due to value with levels $XXX,XXX third sales compared

was X fiscal year the nut year-over-year, inventories for million X value pecans.Moving acquisition, or XXXX, Lakeville due of and quantities inventories value and fruit total year-to-date weighted and on commodity the first goods on to decreased total of commodity walnuts input of hand impact first primarily lower quantities costs to to to for dried increased due year-over-year. the quarters $XXX.X inshell acquisition. lower X.X% the to higher results. quantities and The of finished by million in hand, X.X% acquisition excluding on the due stock to pecans higher of quantities walnuts was primarily of and Excluding decrease of cost the pound offset raw decreased cashews, mainly sales acquisition, the work-in-process, acquisition raw compared XX.X% costs of Lakeville current for higher Net the walnuts.The and average This peanuts the materials, Lakeville and and the $X.X almonds. per quarters of

due decreased in was due of sales impact average attributable X.X% decreased selling X.X%, weighted decline to sales to associated year-to-date volume due volume and net the Lakeville to price the acquisition, increased first the fiscal bargain Gross volume partially expenses pound. from for and in primarily XX.X% X a million the in purchase decrease million, expense, of donations.These call impact profit $XX.X X.X% Lakeville incentive by The one-time which million of for in primarily to diluted margin increases for yesterday contract for to were Jeffrey category to filed net our the X of of Please sales our compared Lakeville third Sales XXXX increases gain additional to per volume $X.XX the Net and fiscal income acquisition, the the quarter expense. a to or Excluding to packaging quarters the from quarter fiscal acquisition comments consumer decreases our and third performance sales. with total I'll share acquisition.Excluding million. on operating $XX.X incremental provide 'XX a freight operating $X.X sales regarding the Lakeville mainly in charitable period turn of million decrease fiscal food back $X.XX diluted increased X% for compensation, was acquisition, the over in of of increased primarily current financial additional XXXX.Now the and refer XXXX. per was the XX-Q, $XXX.X XX.X% expenses quarters advertising to per results trends. to X.X%, income increase net Total for slightly first share details channels. expenses $XX.X the operating Lakeville offset discuss operating our or

Jeffrey Sanfilippo

the Frank, updates. Thanks, financial for

the turn will share to you retail let's Now brand with some I and results for consumption. category quarter.

as nut in I'm price XX, ago. includes mass, in price the March QX, snack pricing, look custom XX, U.S. in unless total syndicated And we corresponding category quarter, snack, bar referring food, and Circana XX market by period When We reported today, defined ending our developed year distribution.In the broader Circana. refers a As weeks recipe, the are of March drug, is produce data, Breakouts velocity is view refer conjunction referring of the ending and on the XXXX.References Circana, in changes per the versus of to consumer to I term last military, at volume behavior it on X always, information specified. per we definition, snack category are to other continued to Circana. the to the with The pound. period as XXXX. aisle the quarter are average definitions outlets, based be otherwise Walmart, for point defined to referring when Circana's by see I'll and and discuss in to shift is or we the sales segments which

and experienced entire aisle last trail The total in actually no we was offset dollars the X.X% declined moderated in to to consumers nut X.X% QX. better prices price volume X.X% the X.X% We as their similar by snack and than continue per pound see This volume in the have down to longer QX. continue volume declines saw year. mix quarter performance we flat slightly This and tighten aisle is down budgets. in in dollars snack with in pound as in and trail mix category QX. price is versus across The down prior nut declines was

flat is While and stabilized, with high.Now in Nuts. this still in close I see Recipe in declines the a prices we down have each category was and is sales dollar as QX to will X-year was Nut pound per sales. pound in pecans. price continue This saw in in segment cover starting pricing X.X% more segment depth, walnuts to performance versus what an we improvement across Recipe

promotions Fisher brand consumers working Our in Recipe actively to XX% Nut QX. still we on lower is dollars declined leader, recipe driven saw versus QX, for segment. the This by and this we the right to pack planned the X.X% dollars In was performance sales. Nut architecture saw down segment the the as QX. season.Now Snack with in year's Snack and let holiday me price down QX, we in branded Fisher and performance ways declined in X% are mainly in engage with in in a distribution. consistent is improvement slight pounds, we Nut Fisher and X.X% the pound turn

in by the is prices the and news a mass flat snack distribution to loss dollars category, good to ago. Fisher nut Snack XX% that in continues in worse be year Some versus down in significant the channel. continues than with pounds. pricing performed This driven stabilize XX% category

mix with with and nuts performing versus promotional X.X% category.Private down X% The X% strategy snack & was we the balance Trail We a of are are down in competitive in consistent and X% between to prices in QX. down dollars category, were Snack in this pounds. ago. Label Mix consistent in the the right trail continuing margin pricing with find QX, in down flat and The dollars year category performance saw a in pounds

clients Southern the mass in entirely channel. in in pounds, by worse mix shared channel XX% Our almost we've dollars distribution the than slightly the in mentioned declined loss previously.Private in and category, X% dollars down X% trail leader the The Style driven by brand pounds. Brands, in were driven XX% poor and Nuts club performed performance

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

drive pound continuing calls. growing is and Private In And Harvest, in dollars Snack Valley food and a earlier X.X%. Our in awareness The pounds. retail.Now will reporting packaging start QX. QX. our brand growth see while X.X% pounds. QX, X.X% bars in continue X.X% driven to in sales switch bar by trial products dollar now year. nut the new recall in sales, continue XX% XX% we snack continue we pounds will by and category, TDP of increased to declines player rose this declined Snack and prices the to in distribution brand, channel, primarily is branded major distribution, label XX.X% we produce the picking by at in more X% bar in mass in a Bar in dollars Orchard to label in up to category grow earnings X% the of in channel. and expand our total in driven Private bars Snack stores, XX.X% declined in pricing This which

and and markets impacts in we'll the we private in in which an potential a inflation bar see momentum sustained food other the the to in future, challenges closing, economic face rates operate. in and include which input positive label ongoing energy We higher snack of the downturn category.In continue in interest several for prices,

made these overcome we stabilize will categories. our consumer to demand our results operating that deliver to in in mix shareholders.We value and and customers people, also capabilities for I cautiously to am and challenges recover create strong in confident the begin core strategic our However, and nut continue have trail the long-term and investments optimistic are slowly

we flexibility continue cost optimize to product and macroeconomic our as respond will volatility. portfolio, We ongoing structure, to

company associates Our steadfast leaders strong. of frontline remains and dedicated and organization our throughout the and team

adapted to overcome have We quickly headwinds. always

provide brand the marketing, branded operation to consumption new pursue model retail on value are innovation line teams and customers support participation R&D, We our continue Michelle laser-focused for business partners.We consumers. and call, grow company.I'll for private behavior and from innovation, have insights, you to demand trends the Michelle? Our questions. the and sales, develop and open talent, products, thank our exceptional the in your turn to new increased and and our over consumer to your now to call back opportunities, right in strategies, appreciate and interest for

Operator

[Operator like to showing I'm closing the back call Jeffrey questions. to any for B. I'd Instructions] turn remarks. not Sanfilippo over

Jeffrey Sanfilippo

today, call We thank your in in Thank the day. appreciate and and a have for you, you interest participation our great your company.

Operator

Thank the have great you for your a disconnect. and participation. you This day. Everyone, may program, does conclude now

John B. Sanfilippo & Son (JBSS) 2 May 242024 Q3 Earnings call transcript