JJSF

Download the Complete Report Here Key Takeaways: Strong topline growth and continued education-channel rebuilding were offset by slower-than-expected manufacturing efficiency at the existing Arps facility. BRFH reported 2Q26 revenue of $4.7 million, up 190% y/y from $1.6 million but down 16% sequentially from $5.6 million in 1Q26 and approximately 9.5% below the low end of $5.2 million guidance. Arps Dairy contributed $3.2 million, including $2.9 million from raw and processed milk, while frozen beverage and food revenue, consisting primarily of legacy Barfresh products, increased 9% y/y to approximately $1.8 million. Consolidated growth remained heavily acquisition-driven, with milk representing roughly 62% of quarterly revenue and core Barfresh recovery not yet fully reflected in reported results. Arps continues to provide supply continuity, while new district wins and returning education customers are expected to contribute more meaningfully with the 2026-27 school year. The principal 2Q pressure point was therefore production, where a slower and more costly manufacturing ramp weighed on gross margin and adjusted EBITDA recovery. Profitability remained pressured by manufacturing inefficiencies, but improving throughput and a more favorable product mix support sequential recovery in 2H26. Gross margin declined to negative 3.2% in 2Q26 from 31.1% in 2Q25 and approximately 18% in 1Q26, while adjusted EBITDA fell to a $1.2 million loss from a $600,000 loss a year ago. The pressure reflected startup costs, equipment limitations and lower than planned productivity at the existing Arps facility, with the impact extending into legacy Barfresh production. Management indicated that repairs and process improvements are improving throughput and yields, while a greater mix of higher margin education products should provide additional support as the 2026-27 school year ramps. Together, these factors support management’s expectation for adjusted EBITDA to improve to a $0.5 million loss to breakeven in 2H26. Arps has restored supply continuity for BRFH, but scaling owned production has required more investment and operational work than initially anticipated. As more Barfresh volume shifted in-house, operating the facility at the required production levels highlighted additional equipment and infrastructure needs that had not been apparent before the acquisition. BRFH therefore moved ice cream production out to prioritize its core smoothie portfolio, while repairs, equipment servicing and process refinements have since improved throughput and yields. Management indicated that a significant portion of the corrective work has already been completed and that remaining requirements at the existing facility should be relatively modest, with focus increasingly shifting to Defiance. Guidance revision quantifies the impact of the slower manufacturing ramp and makes operational efficiency an important 2H26 focus. 2026 revenue guidance was reduced to $23 to $26 million from $28 to $32 million, while adjusted EBITDA guidance was reduced to a loss of $1 million to $2 million from positive $3.2 to $3.8 million. At the respective midpoints, this represents a $5.5 million reduction in expected revenue and an approximately $5.0 million reset in adjusted EBITDA. Management attributed most of the EBITDA revision to ~$1.8 million of higher Arps processing costs, $0.8 million from the loss of the ice cream mix business and $0.8 million of higher material costs, with another $1.2 million tied to delayed legacy Barfresh revenue recovery and unrealized freight and storage synergies. Street’s 2026 revenue estimate of $22.9 million (source: TIKR) sits just below management’s $23 to $26 million guide, suggesting expectations are already relatively conservative; delivery within the range could support upward estimate revisions. Management’s breakdown of the guidance revision indicates that the downgrade is primarily tied to manufacturing efficiency, integration timing and delayed cost savings, making cost per case, throughput and gross margin recovery important operating markers through 2H26. The revised outlook still supports meaningful sequential improvement in 2H26, while education growth and manufacturing progress provide the foundation for continued growth into 2027. With 1H26 revenue of $10.3 million, management’s 2026 guidance implies $12.7 to $15.7 million of revenue in 2H26, with sequential improvement expected in both 3Q26 and 4Q26 as new school districts and returning customers ramp. Management also expects 2H26 adjusted EBITDA to improve to a loss of $0.5 million to breakeven from a $1.46 million loss in 1H26, supported by higher throughput, better cost absorption and a more favorable mix of core Barfresh products. Looking into 2027, Street estimates call for revenue of $29.2 million and adjusted EBITDA of negative $2 million (source: TIKR), implying ~28% revenue growth versus 2026 estimates and a modest improvement in adjusted EBITDA from negative $2.4 million. The revenue growth and modest EBITDA improvement reflect expectations for broader education rollouts, continued customer recovery and gradual improvement in manufacturing economics, while the lower margin Arps milk business remains relatively stable. Education channel momentum continues to build, with new district wins and customer reactivations supporting a stronger 2H26 setup. Several recently won districts began serving BRFH products during the 2025-26 school year and are expected to expand across all locations in the 2026-27 school year, while additional education wins are expected as remaining bids close. BRFH is also reengaging customers that removed products from menus following prior supply disruptions. The timing of these wins helps explain why frozen beverage and food revenue increased 9% y/y in 2Q26, as much of the first half still reflected purchasing decisions made during the prior school year. Management expects incremental 2H26 growth to be driven primarily by higher margin Barfresh products, while the Arps milk business remains relatively stable, supporting a more favorable revenue mix as school-year orders ramp. BRFH’s broker-led commercial model continues to support customer recovery while keeping costs well controlled. Selling, marketing and distribution expense declined 12% y/y to $561,000 in 2Q26 from $634,000, with sales and marketing expense down 28% to $256,000 as the company increasingly relied on brokers to communicate improved supply reliability and rebuild relationships with school districts. Single-serve products are also reducing equipment maintenance requirements in the education channel, providing operating leverage as volume scales. Storage and outbound freight expense increased to $305,000 from $276,000, reflecting the delivery requirements of processed milk, but the broader commercial cost structure remains relatively lean. This should support better operating leverage as higher margin Barfresh volume becomes a larger share of the mix, provided manufacturing efficiency continues to improve. The 44,000-square-foot Defiance facility remains the central strategic catalyst for BRFH’s transition to normalized production economics. BRFH is targeting partial commissioning of core products by year-end 2026, with remaining products expected to follow shortly thereafter. The facility is designed to provide greater throughput, improved production flexibility and more efficient unit economics than the existing plant, directly addressing the equipment reliability and processing constraints that affected 2Q26 results. The company also has a $2.4 million government grant available for qualifying equipment purchases. While the existing Arps facility has already improved supply continuity and reduced reliance on third-party manufacturers, successful commissioning of Defiance should be the more important driver of margin normalization and capacity expansion heading into 2027. The transition will also require careful production sequencing, with the existing facility lease running through September 30 and partial commissioning at Defiance targeted by year-end. Operating expense discipline provided some offset to manufacturing pressure, although higher G&A and financing costs weighed on overall profitability. Selling, marketing and distribution expense declined 12% y/y to $561,000 from $634,000 and was down from approximately $697,000 in 1Q26, reflecting greater use of the broker network and lower equipment-related costs. G&A increased 18% y/y to $794,000 from $673,000, primarily due to higher personnel, recruiting and administrative costs associated with Arps Dairy, while total operating expenses remained broadly flat y/y at $1.37 million. Net loss widened to $1.86 million from $880,000 y/y, with interest expense increasing to $344,000 from $12,000 as acquisition and facility financing became a larger part of the cost structure. Working capital is being positioned for the new school year, with inventory supporting production readiness as education volumes ramp. Inventory increased approximately 30% from year-end 2025 to $2.16 million, driven by raw materials and packaging rising to $1.17 million from $684,000, while finished goods remained broadly stable at approximately $1.0 million. This mix suggests the build is primarily supporting higher production rather than reflecting an accumulation of unsold finished product. Management also indicated that inventory has continued to build through the summer and that current internal capacity, supplemented by co-manufacturers, is sufficient to support existing, returning and newly won school business. Given the supply interruptions experienced last year, maintaining this production buffer should help BRFH convert improving education demand into more consistent revenue. Liquidity remains supported by receivables financing and planned funding sources as the manufacturing build progresses. BRFH ended June with $324,000 of cash and $1.09 million of trade receivables, while operating cash use increased to $3.05 million in 1H26 from $1.58 million a year ago as the company absorbed integration costs, built inventory and reduced trade payables. Receivables facilities provide an additional liquidity buffer, with approximately $3.58 million of borrowing availability at quarter end, subject to eligible collateral. Converting the back-to-school inventory build into sales and receivables, while securing planned financing for Defiance, remains an important balance-sheet consideration through the remainder of 2026. The March convertible financing provides BRFH with funding flexibility, although interest cost and potential dilution remain considerations. BRFH raised $7.5 million through senior convertible notes and used a portion of the proceeds to repay the existing mortgage, leaving the Defiance property unencumbered and available to support planned property-backed financing. The notes carry a 10% coupon during the first 12 months and are convertible at $2.90 per share, while investors also received approximately 2.35 million warrants exercisable at $3.20. Interest expense increased to $344,000 in 2Q26 from $12,000 a year ago, reflecting the higher financing burden. Management does not currently plan an equity raise and continues to prioritize mortgage and equipment financing; successful execution of that plan would help limit incremental dilution as BRFH completes the Defiance build. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. Stock has reacted negatively to the latest earnings print, but our analysis suggests BRFH’s current valuation increasingly discounts the near-term operating pressure reflected in the guidance reset, while the medium to long-term opportunity from education growth and vertical integration remains intact. At $1.30 per share and an approximately $21 million market capitalization, BRFH trades at 0.93x 2026E P/Sales. The selloff reflects the slower manufacturing ramp and reduced 2026 outlook, while the longer-term education opportunity and strategic rationale for vertical integration remain intact. Importantly, the Street estimate sits slightly below the low end of management’s $23 to $26 million 2026 revenue guidance, suggesting current expectations are already relatively conservative. Delivery within the guidance range, particularly toward the upper end, could support upward estimate revisions and strengthen confidence in the medium to long-term growth and margin recovery trajectory. A return toward BRFH’s historical valuation range highlights meaningful rerating potential as execution improves. The stock has de-rated and currently trades well below its three-year peak of 4.5x NTM P/Sales. Applying a 3.0x P/Sales multiple, approximately one-third below the historical peak, to the $22.9 million 2026E Street revenue implies an illustrative market capitalization of approximately $68 million, or roughly $4.2 per share, while 2027E Street revenue of $29.2 million provides additional forward growth support. However, the path to rerating remains contingent on execution across key operating milestones, including education revenue growth through the 2026-27 school year, gross margin recovery, improved efficiency at the Arps facility, progress toward the 2H26 adjusted EBITDA target, and successful commissioning of the Defiance facility. Relative valuation has also become compelling, with BRFH trading at a greater than 40% discount to peers. BRFH’s 0.93x 2026E P/Sales multiple compares with a peer average of 1.58x, representing an approximately 41% discount. Applying the peer average to the $22.9 million 2026E Street revenue estimate sourced from TIKR implies an illustrative equity value of approximately $36 million, or roughly $2.2 per share. This framework assumes only convergence toward the peer average, with further rerating potential if BRFH delivers within management’s revenue guidance, demonstrates sequential margin improvement, and executes on the Defiance transition, supporting the medium to long-term growth and margin recovery thesis. Read Exec Edge’s Initiation on Barfresh Food Group Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Barfresh Reports Topline Growth & Continued Education Recovery – Quarterly Update Report appeared first on ExecEdge.

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. J&J Snack Foods stock has fallen 39.7% over the past three years, yet at a last close of US$91.01 the market multiples still point to an expensive profile while the Discounted Cash Flow (DCF) intrinsic value estimate suggests the shares are roughly in line with fair value. That split leaves investors weighing a stock that has already seen a long period of weak returns against valuation checks that do not flag an obvious bargain. The 39.7% decline over three years highlights how shareholder returns have been under pressure, which can affect how much of a recovery is already priced in. Future pricing power and cash generation from J&J Snack Foods' snack portfolio can support the current valuation, while any sustained pressure on margins or input costs may limit how much intrinsic value grows relative to the share price. J&J Snack Foods only passes 1 of 6 valuation checks, which suggests the stock leans expensive on the broader tests even if the intrinsic value estimate looks roughly fair. The issue now is whether J&J Snack Foods offers enough long term value at around US$91 per share after a multi year drawdown, given a fairly valued intrinsic estimate but an overvalued signal from market multiples. Find out why J&J Snack Foods' -16.3% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model estimates what J&J Snack Foods' future cash generation is worth in today’s money. For the latest twelve months, the company produced free cash flow of about $89.9 million, and the model uses a two stage Free Cash Flow to Equity approach that assumes cash flows ease back slightly before settling into modest growth. Based on these projections, the DCF points to an intrinsic value of about $99 per share, compared with the recent price around $91. This implies the stock screens roughly 8.4% undervalued on cash flows. This in turn suggests the current market price is broadly in line with what J&J Snack Foods is expected to generate for shareholders over time rather than indicating a large gap to fair value. Overall, the Discounted Cash Flow view is that J&J Snack Foods looks about fairly valued with only a small margin of undervaluation. J&J Snack Foods is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for J&J Snack Foods. The P/E ratio suits J&J Snack Foods because earnings are a key driver of how investors typically value established consumer staples stocks. Right now the stock trades on a P/E of about 34.5x, compared with a Food industry average near 19.9x and a peer average around 19.3x. That is a clear premium to what investors are paying for many other earnings streams in the same sector. The fair P/E ratio implied for J&J Snack Foods is about 21.8x based on its profile. This is below the current 34.5x, which indicates that the share price carries a relatively high earnings multiple even after the longer share price decline. For investors comparing options in the Food sector, this means paying a higher price for each dollar of J&J Snack Foods earnings than the model suggests is justified. On the P/E test, J&J Snack Foods stock appears overvalued relative to both its tailored fair multiple and the broader Food industry. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where this valuation puzzle for J&J Snack Foods leaves off and spell out which growth, margin and earnings paths would need to play out for the stock to be worth meaningfully more or less than today’s price on Simply Wall St's Community page. Rather than focusing on a single multiple or model, each Narrative lays out the assumptions behind its fair value view so you can compare them with the company’s actual results over time. The J&J Snack Foods community is split between a recovery story backed by buybacks and product refreshes and a more cautious view that focuses on execution risks and margin pressure. Bull case: 18% undervalued Read the full Bull Case to see why J&J Snack Foods could be undervalued Bear case: 10% overvalued Read the full Bear Case to see why J&J Snack Foods could be overvalued Do you think there's more to the story for J&J Snack Foods? Head over to our Community to see what others are saying! For J&J Snack Foods, the Discounted Cash Flow (DCF) work suggests the intrinsic value sits only modestly above the current share price, so the stock does not screen as a clear bargain. Market multiples tell a different story, with the elevated P/E pointing to an overvalued profile versus peers and its own fair ratio. That tension, combined with a weak broader value score, means any upside case leans heavily on how earnings quality, margins and cash generation evolve. The crux for investors is whether future margin delivery and pricing power are strong enough to justify the richer multiple that the market currently assigns. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include JJSF. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 10:00 a.m. ET Investor Relations - Reed Anderson President and Chief Executive Officer - Daniel Fachner Chief Financial Officer - Shawn C. Munsell Operator: Good day, and thank you for standing by. Welcome to the J&J Snack Foods third quarter 2026 conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Reed Anderson with ICR. Please go ahead. Reed Anderson: Thank you, operator, and good morning, everyone. Thank you for joining the J&J Snack Foods fiscal 2026 third quarter conference Before getting started, let me take a minute to read the safe harbor language. This call contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 2 thousand. All statements made on this call that do not relate to matters of historical facts should be considered forward looking statements. Including statements regarding management's plans, strategies, goals, expectations and objectives as well as our anticipated financial performance. This includes, without limitation, our expectations with respect to this success of our cost savings initiatives and customer demand improvements in the sales channels in which we operate. These statements are neither promises nor guarantees and involve known and unknown risks. Uncertainties and other important factors that may cause results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking Risk factors and other items discussed in our Annual Report on Form 10 ks and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward looking statements made on the call today. Any such forward looking statements represent management's estimates as of the date of the call today, August 5, 2026. While we may elect to update forward looking statements at some future point, we disclaim any obligation to do so even if subsequent events cause expectations to change. In addition, we may also reference certain non GAAP measures on the call today, including adjusted EBITDA. Adjusted operating income, or adjusted earnings per share. All of which are reconciled to the nearest GAAP measure on the company's earnings press release, which can be found in our Investor Relations section of our website Joining me on the call today is Daniel Fachner, our Chief Executive Officer along with Shawn C. Munsell, our Chief Financial Officer. Following management's prepared remarks, we will open the call for a question-and-answer session. With that, I would now like to turn the call over to Mr. Fachner, Please go ahead, Daniel. Daniel Fachner: Good morning, and thanks, everyone, for joining today's call to discuss our third quarter results. We are proud of the progress we have made implementing our transformation initiatives. Which helped to support earnings performance despite material fuel and freight pressures during the quarter. Gross profit improved about 1 million to 151 million and consistent with the first half of the fiscal year, gross margin continued to expand rising 240 basis points to 35.5%. Adjusted EBITDA came in at $67.4 million, a decrease of 6.4% from last year and adjusted earnings per share were $1.96 versus $2.00 a year ago. The $4.6 million EBITDA decline from the prior year quarter was primarily attributed to freight and fuel cost pressures which together increased about $4.7 million net of surcharge collections. Net sales were $426 million, down 6.2% with over half of the decline attributed to anticipated sales reduction in bakery. About 140 basis points of decline was a attributed to our frozen beverage business, where higher beverage sales only partly offset lower service and machine sales. Retail sales improved 1.7% in the quarter as higher levels of promotions lifted volume. Looking ahead, sales momentum is building. And we expect the sales environment to improve in the fourth quarter with our toughest top line comparison behind us. The impact of the anticipated bakery sales reduction peaked in our third quarter and will diminish in the fourth quarter to about 2.5% of prior year sales. We are shipping against several new meaningful pieces of business in the fourth quarter across our core portfolio, that includes churros, pretzels, and frozen novelties. We also expect retail sales to improve further as we realize benefits from innovations and promotions while the sliding fee headwind diminishes. Our innovation rollout continues, and we have been pleased with the results. Some headwinds in service and machine sales are anticipated in the fourth quarter, but we expect beverage volume increases to partly offset those headwinds. Further, we have line of sight to begin closing the service revenue gap in the fourth quarter. With most of it closed by the first quarter of fiscal 2027. We expect the company to return to sales growth in fiscal 2027. The increase in fuel and freight expenses reflects higher oil prices and significant tightening of freight markets during the quarter. Fuel costs were about in line with expectations, while freight rates rose sharply as the quarter progressed. The freight increase primarily reflects constrained capacity because of regulatory and legislation changes we are pursuing steps to mitigate some of the pressure. We expanded our application of fuel surcharges during the quarter and recently increased our minimum order quantities. While we expect fuel and freight pressures to persist in our fourth quarter, diesel prices have moderated from the highs earlier in the summer. With respect to segment performance, there are several bright spots in the quarter. In foodservice pretzels, we extended our category leadership picking up 4.6 points of dollar share. Our retail segment had a solid quarter, Net sales were up 1.7% as higher promotions supported volume. Moreover, we incurred higher slotting fees to support the rollout of new innovation. Implying underlying growth in the mid single digit range. Syndicated data for the 13 weeks ending July 12, showed retail pretzel sales up about 2% and novelties up 3%. Dogsters continues to perform exceptionally well with retail sales up over 30% in tracked channels. Over the same period, syndicated data shows Luigi's up over 20% aided by end cap placements with a major customer. Retail Dippin' Dots growth was driven by the launch of the high temp Dippin' Dots product as well as 2 more sundae flavors. With the brand up more than a 100% and track channels for the 13 weeks ending July 12. With almost 4 million retail measured sales. Within our frozen beverage segment, beverage volume increased mainly on the strength of theaters, and mass merchandising channels. Driving a net sales increase for beverage of 5.9%. A slate of solid movies in the quarter more than offset the success of the Minecraft movie in the prior year quarter. We are extremely encouraged by the movie lineup for the fourth quarter and for fiscal 2027. Which includes the new record breaking Spider Man movie that was released this past weekend. The test with a West Coast QSR operator continues and we remain optimistic that it will conclude with a positive outcome soon. We are actively testing and expanding our footprint with both new and existing partners across convenience, theaters, and entertainment venues. And early signs are very encouraging. The more efficient cost structure we built through Project Apollo along with the improved sales mix, has underpinned much of our gross margin expansion and puts us in a strong position as we look to return to top line growth in fiscal 2027. Plant consolidation savings are ahead of target. Giving us the confidence to raise the plant consolidation component of Apollo to at least $20 million of annualized savings. That would take the full program annualized run rate to at least $25 million. Further, our G&A initiatives were implemented in the quarter in the quarter which helped to moderate administrative expenses which were materially flat in the quarter. And despite the fuel and freight cost increases, we did realize distribution cost savings in the quarter from Apollo initiatives. Our innovation pipeline keeps gaining traction. We are picking up new distribution across both retail and foodservice. We are encouraged by the early results of our new better for you lineup, including our SUPERPRETZEL 10-gram protein pretzel and the new Luigi's mini pops with benefits of hydration, and antioxidants. Which are generating strong velocities for our retail partners. Dogsters has yielded the most incremental distribution and we are also optimistic about the rollout of Dogsters to the pet retail channel which just started in August. Our balance sheet remains in great shape. This quarter, we returned another $25 million of cash to shareholders. including $15 million in dividends, and $10 million in share repurchases. I will now hand things over to Shawn who will walk you through the numbers in more detail. Shawn? Shawn C. Munsell: Thanks, Daniel, and good morning, everyone. Building on what Daniel covered, our third quarter results reflect continued execution on our transformation initiatives even with some cost headwinds working against us. Foodservice net sales declined $22.9 million or 8.3% to $254.3 million, with about $16 million of the decline associated with anticipated reductions in bakery. We saw modest growth in both pretzels and churros, but this was more than offset by continued softness in cookies and handhelds, consistent with the pattern we saw in the second quarter. Foodservice segment operating income of $28.1 million was modestly above prior year as higher distribution costs mostly offset continued improvements in gross profit. Retail segment net sales increased $1.1 million or 1.7 to $64.9 million. We incurred a $2 million increase in slotting fees in the third quarter to support the rollout of recent innovation. Absent slotting increases, sales growth was 4.8%. Dogster's continues to perform exceptionally well with units up about 40% in the quarter. Retail segment operating income declined $3.5 million, primarily driven by the increase in slotting fees and distribution costs. Frozen beverage segment net sales decreased $6.5 million or 5.8% to $106.7 million. Strong growth in beverage sales of 5.9% was more than offset by lower service and machine sales. Lower service sales were driven by customer insourcing decisions consistent with our fiscal second quarter, while machine sales declines mainly reflect the cyclicality of the machine business. Beverage strength primarily was driven by theater and mass merchandise channels. Convenience channel sales were soft in the quarter. Frozen beverage segment operating income decreased $0.9 million to $22.8 million, as sales decline and higher distribution costs were partly offset by favorable foreign exchange cost containment initiatives. Consolidated gross margin improved 240 basis points to 35.5% due primarily to plant consolidation savings and mix Year to date, gross margin has expanded 200 basis points, and we expect gross margin expansion to continue in the fourth quarter. Total operating expenses increased approximately 17.1% or $15.3 million. Prior year reported results included a $9.1 million net gain driven primarily by receipt of insurance proceeds. Selling and marketing expense increased approximately 2.3% or $0.8 million versus the prior year, representing about 8.1% of sales compared to 7.5% in the prior year. Distribution expenses increased $4.9 million and accounted for 11.6% of sales compared to 9.8% in the prior year period. Driven by higher freight and fuel costs of approximately $5 million, excluding any offset from fuel surcharges. Administrative expense was approximately flat versus the prior year, and included about $0.6 million of nonrecurring legal charges. Implementation of G&A savings initiatives helped to drive a moderation in administrative expenses. Adjusted operating income was $48.1 million, compared to $53.4 million in the prior year. Adjusted EBITDA was $67.4 million, down 6.4% from $72 million last year. The effective tax rate for the quarter was approximately 23.2%, as compared to 27.2% in the prior year. On a reported basis, earnings per diluted share was $1.88, compared to $2.26 last year. With the prior year benefiting from a onetime insurance gain. On an adjusted basis, earnings per share was $1.96 compared to $2.00 a year ago. Our balance sheet remains strong with cash net of debt of approximately $35 million. We had approximately $182 million of borrowing capacity under our revolving credit facility. During the quarter, we generated approximately $48.8 million in operating cash flow and invested about $18.1 million in capital expenditures. We expect to collect approximately $17 million in insurance proceeds in August reflecting the final settlement of the fire related loss at our Holly Ridge plant which was closed as part of project Apollo. We repurchased approximately 130 thousand shares of common stock for $10 million during the quarter. On a year to date basis, we have returned approximately $120 million to shareholders through the first 9 months of fiscal 2026, through dividends and share repurchases. That concludes our prepared remarks, and we are now ready to take your questions. Operator? Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Todd Morrison Brooks of The Benchmark Company. Your line is now open. Todd Brooks: Hey. Good morning, guys. Thanks for taking my questions. Daniel Fachner: Good morning, Todd. Todd Brooks: Daniel, you spoke to headwinds diminishing in Q4 in the earnings release. What are you speaking to specifically that eases in Q4, and what is your visibility into that happening? Daniel Fachner: Morning, Todd. Thanks for the question. Hey. Before we start, I just wanted to say a couple things. Our late founder, Gerald Shreiber, might have said this was a quarter to crow about. And I feel like there is a few things I wanna crow about if I could do that just before we get started. I am really proud of the team and what they are accomplishing, especially in this quarter. We started out the year with a play that we called the raise margins, reduce expenses, to really run at the headwind. And this quarter that we are up against last year was a record breaking quarter, and we ran at it. And did pretty well up against it especially when you consider the fuel on the freight picture that we are up against. Without that headwind, we would have beaten last year's EBITDA. you know, kind of In short, Todd, Project Apollo is doing exactly what we designed it to do. It protected margins in the quarter. Despite the pressures that are out there. And we are really seeing some great momentum building in our sales heading into the fourth quarter. So some really exciting things in new pieces of business that we have that are shipping, this coming quarter. Some great things with pretzels, and a QSR. With churros, in a club store. And really frozen novelties in a lot of different areas, including some great private label stuff that we are doing. And then, lastly, the last thing I would crow about, you know, we had a headwind with service, and the team has gone out there and signed a new deal, with a big service organization that will get us back on track in the fourth quarter and really start to get back to normal growth. As we see 2027. So really a lot of good things happening. Your question around, what are some of those? We had bakery head wins that had some declines and we are still doing that SKU rationalization But we kinda hit the peak of that as you get to Q3, and it starts to taper down as we get to Q4, In Q3, it was approximately 3.5%. In Q4, it is in the 2.5% range. We are really closing that service gap like we just talked about. Got a great new piece of business. Anxious to share the name of that customer at some point in the future, but we have signed the contract, and that piece of business is coming on board now. And will continue to grow into next year. Retail is doing great. You know, you saw that up 1.7% in the quarter. Really happy with their progress. You know, we have been talking about doing a lot of promoting in that but we are seeing volumes outpace the promoting, which is really exciting. And then slotting fees as we have had to pay for a lot of that great new innovation and it is great new innovation. Some of that doing extremely well for us. But those sliding fees are starting to diminish as well. And then last but not least, really excited to see what the theater is starting to do. I am sure everybody's been reading about that. In different times, people have thought that theater business has been left for dead. But it is charged back really, really strong. And in this past weekend, we had Spider Man that was released and it was a record breaker. So we are really excited about some of the things that we have going on and are looking forward to Q4 and beyond. Todd Brooks: that is great, Daniel. Thanks. And if I can extend that question and start to talk about fiscal 2027? J&J has a long history of generating x amount of organic growth, and then there is market related growth plus or minus around that. If you look at what you are tasking the teams with or what the outlook is, what do you what do you see for the organic growth outlook for the company in 2027, And what are the big drivers that kind of give you visibility into that controllable growth that might be part of that. Daniel Fachner: Yeah. We definitely see organic growth returning in 2027. As I said earlier, We have got some really good things happening in our core products, in pretzels and churros and frozen novelties. We have talked a little bit about the frozen beverage. We think theaters are coming back strong. For 2027, we think the lineup of theaters looks good. I still like the test that we have going on with the IC business and a QSR that I think that we will see some positive results that happen in 2027. And then a couple other tests that the team is generating beyond that. Our sales team right now is hitting on all cylinders. So I like what we have going in to 2027. We have not released what that number will be, but I absolutely believe we will be back to organic growth, and then I think we will continue to see great results from the innovation that we have had going on and some innovation to come as well. Todd Brooks: Okay. Great. Thanks, Shawn. Daniel Fachner: Thank you. Operator: Our next question comes from the line of Scott Michael Marks of Jefferies. Your line is now open. Scott Marks: Hey, good morning, Daniel and Shawn. Thanks for taking our questions. Daniel Fachner: First thing I wanted to ask about, you talked about the food service segment. I think if we exclude the bakery SKU rationalization, sales were still down a little bit. We called out some weakness in cookies and handhelds. So just wondering if you can dive into that a bit. Just help us understand what is happening with that part of the business and how you are thinking about you know, maybe operational adjustments or changes to help stabilize, that part of the portfolio. Scott Marks: Yeah. Daniel Fachner: Good morning, Scott. Hey. We are proud of what the food service group is doing as well. You know, it is a big group. If you if you think about our total business, it is still 2 thirds of our business, and there is a lot of moving parts. And the team is doing really, really well there. When you think about a couple areas that are weaker, meaning the cookies and the handhelds, The cookies is just a kind of an offshoot of the buying being down in that area. We have a major customer south of the border, that has been a little bit softer this year. We continue to hope that it will come back to its normal self, but it has not. The fortunate thing is, lower margin business as is with the handheld business as well. And most of our handhelds go to a couple big customers. Where there has been some not direct competitor environment, but some other products added to that area That have maybe impacted those sales slightly. And the way that we are going to go about fixing that or attacking that and the team is doing that right now is to go grow the core. Right? We have seen some great growth happening. We have got a really nice piece of churro business that we will be shipping out in the fourth quarter and it could be backed up by some really strong ones in Q1. We have got a big pretzel opportunity that will be hitting here in the fourth quarter, and it is even using our brand SUPERPRETZEL along with it I am really excited about that. And then just as I talked about, frozen novelty is doing really well. In addition to doing some great things with private label or co man, around the frozen novelties. And that is what we will do to continue to pull the food service back in line. And that is that cookie gap, you know, that extended from the second quarter, it did improve a bit. In the third quarter, but it did not improve by quite as much as we were hoping. We have even seen it improve a little bit here in the fourth quarter, but it has to continue to grow. Scott Marks: Understood. Appreciate the color there. And then next question for me. Maybe if we could shift over for a second to talk about project Apollo. You talked about a higher amount of annualized savings from the plant closure. Portion of that. Just wondering if you can help us understand maybe the drivers behind that, you know, why is that coming in ahead of plan and prior guidance? And then, how should be thinking about the other components of project Apollo as well. Thanks. Daniel Fachner: Yeah. it is another 1 of those things. We talked about things to crow about. When you start a project like Apollo, those are big rocks that you are turning over, maybe even boulders. That we are picking up and moving. And the team has done a tremendous job with that. If you have ever been involved in you know, consolidation or expense savings, those projects, are not fun and not easy. and require a lot of work. Our team has done a tremendous job with that. Really, really proud of what it is done. We talked about raising our thoughts around what it will accomplish for us this year. Sean, do you want to touch on some of those things? Shawn C. Munsell: Yeah. Sure. So the again, to be clear, you know, we raised the plant consolidation component of Apollo from 15 to 20 million which takes the total program from 20 to 25 million. And largely, what we have seen is, you know, some of the costs transitioning products have stabilized And so that is helping to support helping to support the higher number. You know, that 20 million annualized is consistent with what we achieved in the third quarter. And I can tell you too that, you know, our target, you know, did have a bit of conservatism built into it. We feel comfortable now that we have a couple quarters under our belt that, you know, the run rate from the third quarter is going to hold for us. Scott Marks: Appreciate it. Thanks for the questions. I will pass it on. Thank you, Scott. Daniel Fachner: Thank you. Operator: Our next question comes from the line of Jon Andersen of William Blair. Jon Andersen: Good morning, guys. Daniel Fachner: Good morning, Jon. Jon Andersen: Hey. Sticking with the Apollo program for a moment. I think you have always talked about it as a phased-in approach, and you are obviously over-delivering on phase 1, the plant consolidation. I am thinking ahead a little bit. As you look forward Is there a second phase to this, that could end up yielding additional benefits. And if so, is there any way for us to think about, at least maybe some of the areas you are looking at and maybe kind of benefits and timing at a high level? Daniel Fachner: Yeah. Absolutely. Great question, John. Again, I just wanna I wanna say this 1 more time. Proud of what the teams are doing around 2027, and there is some real good work around that as well. You saw some of it, in this quarter as we talked about G&A expenses and pulling that back in line and I am excited about what we see there. We will continue to look at areas like the plants and where we are making products and where we can make products in future to get them closer to points of distribution. We will look at any form of consolidation that can be done there. We are still working on it, and we will be talking about that in the next quarter and trying to identify exactly what that might mean for us in 2027, but the teams have embraced it and are doing a really, really good job. And, again, that is not easy work. But they are doing well with it. Jon Andersen: Absolutely. You talked about the sales momentum building and that you would expect a return to organic growth on a full year basis in fiscal 2027? Do you think you can grow organically in the fourth quarter of 2026? Or should we be thinking more about these business wins and launches, etcetera, kind of kicking in and having you kind of inflect early in 2027 versus the fourth quarter? Daniel Fachner: Well, when you think about Q4, we still have some of the planned obsolescence that we are up against. And I think we have talked about that in that 2.5 percent range. So we are still up against that as we go into Q4. So I am not sure that I would identify that yet there. I do think as we get into Q1, with what our line of sight is right now, we have a really good chance of seeing that at the end of this calendar year or Q1 for us going into next year. The pipeline, just to touch on that a little bit, the pipeline from the sales team, is about as strong as I have ever seen. And so if some of those hit, and if some of the bigger ones hit, I will feel really good about 2027. Of course, there are always headwinds. Right? And so, you know, we will be facing those too. But I feel good about what we have going on, and I feel good about what the teams are generating right now. They have been working really, really hard. And I would look more towards Q1 than probably Q4. Jon Andersen: that is that is helpful. Given the given the pipeline as you described it, being so strong. Are there any kind of capacity considerations here? Are you in a good shape to service that demand? On time and in full, or are there some investments that you might be making or need to make as you think about capacity going forward? Daniel Fachner: Absolutely. again, kicked it off with, you know, things to crow about and what the teams are doing out there. And 1 of 1 of the plays that we called and have called for the last couple years the Grogo. Grow the core. And that is where really, most of this growth is coming from is in our core business. Those are areas that we had invested in already to be able to have that type of capacity. And so what we are looking at right now will not require additional investments around those types of things to get the sales growth that we are looking at. Jon Andersen: Okay. I know that, you know, you have gone through this process this year. Which makes a lot of sense to, you know, skew rationalize some parts of the bakery business, maybe more commodity oriented. Is there more of that to do? Or maybe bigger or additional moves that you might want to make from a portfolio perspective to reorient around, I guess, what you call kind of your crown jewels or core brands? Or are you kinda happy with the work that is been done and that, you know, we you move into more of a steady state as you get into next year? Daniel Fachner: Yeah. it is another really good question. I do not see us at this point in time having any more SKU rationalization or planned obsolescence. We are continuing, though, to assess the portfolio. And make sure that what we sell and what we want to sell in the future are good fits for this organization and help us reach those goals like we did this quarter with a 35.5% gross profit margin. We have talked about that for a long time, and it was really exciting to see that happen. So we will continue to assess the entire portfolio, but I do not see I do not see at this point in time any additional SKU rationalization that needs to be done. Jon Andersen: Great. Thank you so much, and congrats. Daniel Fachner: Thank you, Jon. Operator: Thank you. This concludes the question-and-answer session. I would now like to turn it back to management for closing remarks. Daniel Fachner: Great. Thank you very much. Thanks, everyone, for your questions. Stepping back, I think our third quarter results show that the transformation work that we have been doing is holding up. We are protecting margins and profitability even with some top line and distribution cost pressures working against us. If I had to sum up fiscal 26, it is really been a year of repositioning the business for the long run. We have stayed disciplined on product development and innovation and really building the right partnerships. I think it sets us up well heading into fiscal 2027. Our balance sheet gives us great room to keep investing in growth while returning cash to shareholders. We remain completely confident in Project Apollo, and we believe that it will continue to pay off. So I wanna thank you again for your support. And we look forward to catching up with you next quarter. Thank you very much. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in J&J Snack Foods, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and J&J Snack Foods wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. JJSF Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in J & J Snack Foods Corp.? Here are five stocks we like better. Fiscal Q3 results weakened: Net sales fell 6.2% to $426 million, adjusted EBITDA declined 6.4% to $67.4 million, and adjusted EPS slipped to $1.96. Higher freight and fuel costs increased distribution expenses by roughly $5 million, although gross margin improved to 35.5% through Project Apollo savings and favorable sales mix. Segment performance was mixed: Foodservice sales dropped 8.3%, largely due to planned bakery SKU reductions and weakness in cookies and handheld products, while retail sales rose 1.7% on brand momentum and product launches. Frozen beverage sales fell 5.8% as beverage growth was offset by declines in service and machine sales. Management raised its cost-savings target and expects growth to resume: Annualized Project Apollo savings are now expected to reach at least $25 million, including $20 million from plant consolidation. Management expects bakery headwinds to ease in Q4 but is more likely to return to organic growth in fiscal Q1 2027. Near 52-Week Lows, These 3 Mid-Cap Stocks Are Worth a Look J & J Snack Foods (NASDAQ:JJSF) reported lower fiscal third-quarter sales and adjusted earnings as freight and fuel costs rose, though the company said margin gains from its transformation program helped offset some of those pressures. Net sales for the quarter totaled $426 million, down 6.2% from a year earlier. Adjusted EBITDA fell 6.4% to $67.4 million, while adjusted earnings per share were $1.96, compared with $2.00 in the prior-year period. Reported diluted earnings per share were $1.88, versus $2.26 a year ago; the earlier period included a $9.1 million non-recurring net gain primarily related to insurance proceeds. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control 3 Unstoppable Stocks To Cushion A VIX Spike, In One Sector Chief Executive Officer Dan Fachner said the company improved gross profit by about $1 million to $151 million, while gross margin expanded 240 basis points to 35.5%. He attributed the improvement to Project Apollo cost-saving initiatives and sales mix changes. “Project Apollo is doing exactly what we designed it to do,” Fachner said during the call, describing the program as helping protect margins despite higher logistics costs. → 3 Drone Stocks That Should Soar After the Summer Slump Higher freight and fuel costs were the main factor behind the year-over-year decline in EBITDA. Fachner said those costs increased about $4.7 million net of surcharge collections, while Chief Financial Officer Shawn Munsell said distribution expenses rose $4.9 million and represented 11.6% of sales, compared with 9.8% a year earlier. Munsell said higher freight and fuel costs accounted for roughly $5 million of increased distribution expense before fuel-surcharge offsets. Freight rates accelerated during the quarter as available capacity tightened, according to Fachner, who cited regulatory and legislative changes as contributing factors. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure The company expanded fuel surcharges during the quarter and increased minimum order quantities to help mitigate the cost impact. Management expects freight and fuel pressures to continue in the fourth quarter, although diesel prices have moderated from earlier summer highs. Total operating expenses increased 17.1%, or $15.3 million, compared with the prior-year quarter. Administrative expenses were approximately flat, despite about $600,000 in non-recurring legal charges, as newly implemented general and administrative savings initiatives helped offset costs. Foodservice sales declined $22.9 million, or 8.3%, to $254.3 million. About $16 million of that decline was tied to anticipated bakery sales reductions associated with SKU rationalization, Munsell said. The company recorded modest sales growth in pretzels and churros, but that was more than offset by continued weakness in cookies and handheld products. Fachner said cookie demand was softer at a major customer “south of the border,” while handheld sales were affected by other products introduced in customer locations. Foodservice operating income rose modestly to $28.1 million as gross-profit improvement helped counter increased distribution costs. Management expects the bakery-related sales reduction to lessen in the fiscal fourth quarter. Fachner said the impact peaked at about 3.5% of prior-year sales in the third quarter and is expected to decline to roughly 2.5% in the fourth quarter. The company does not currently anticipate additional SKU rationalization, though it will continue assessing its portfolio. Retail net sales increased 1.7% to $64.9 million. The segment incurred an additional $2 million in slotting fees related to recent product launches; excluding that increase, retail sales would have risen 4.8%, Munsell said. Retail operating income declined $3.5 million, primarily because of higher slotting fees and distribution costs. Still, management highlighted several brands showing strong momentum: Dogsters retail sales rose more than 30% in tracked channels, while unit sales increased about 40% during the quarter. Luigi’s sales increased more than 20% in syndicated data for the 13 weeks ended July 12, aided by end-cap placements with a major customer. Dippin’ Dots retail sales more than doubled in tracked channels, supported by the high-temperature Dippin’ Dots product and additional sundae flavors. Retail pretzel sales increased about 2%, while novelty sales rose 3% in syndicated data for the 13-week period. Fachner said the company is seeing encouraging results from its Better For You lineup, including a SuperPretzel product with 10 grams of protein and Luigi’s Mini Pops featuring hydration and antioxidant benefits. Dogsters also began rolling out to pet retailers in August. Frozen beverage segment sales declined 5.8% to $106.7 million. Beverage sales increased 5.9%, led by theaters and mass-merchandise customers, but the growth was more than offset by lower service and machine sales. Management said service revenue was affected by customer insourcing decisions, while machine sales reflected the cyclical nature of that business. Convenience-channel sales were soft during the quarter. Frozen beverage operating income fell $900,000 to $22.8 million. The sales decline and higher distribution costs were partly offset by favorable foreign exchange and cost-control actions. Fachner said the company expects beverage volumes to partly offset continued headwinds in service and machine sales during the fourth quarter. He added that J&J Snack Foods has signed a new agreement with a large service organization that should begin closing the service-revenue gap in the fourth quarter, with most of the gap expected to be addressed by the first quarter of fiscal 2027. The company also cited an improving theater slate, including the newly released Spider-Man movie, and said it remains optimistic about a test with a West Coast quick-service restaurant operator. J&J Snack Foods raised its projected annualized savings from the plant-consolidation component of Project Apollo to at least $20 million, from $15 million previously. That increases the full program’s annualized run-rate target to at least $25 million. Munsell said product-transition costs have stabilized and that the $20 million annualized plant-consolidation target is consistent with savings achieved in the third quarter. Management also said it is evaluating “Apollo ’27” initiatives, including further opportunities involving manufacturing locations, distribution proximity and general and administrative costs. The company generated approximately $48.8 million in operating cash flow during the quarter and spent about $18.1 million on capital expenditures. Cash net of debt was approximately $35 million, and J&J Snack Foods had about $182 million of borrowing capacity under its revolving credit facility. During the quarter, the company returned $25 million to shareholders through $15 million in dividends and $10 million in share repurchases. It repurchased approximately 136,000 shares, and said it had returned roughly $120 million to shareholders through dividends and buybacks during the first nine months of fiscal 2026. The company also expects to collect about $17 million in August from the final insurance settlement related to the former Holly Ridge plant. Looking ahead, Fachner said sales momentum is building behind new business in churros, pretzels and frozen novelties. However, he indicated the company is more likely to return to organic growth in the first quarter of fiscal 2027 than in the fiscal fourth quarter, given the remaining bakery-related sales reduction. J & J Snack Foods (NASDAQ: JJSF) is a U.S.-based manufacturer and distributor of branded snack foods and frozen beverages. Headquartered in Pennsauken, New Jersey, the company develops, produces and markets a broad array of proprietary and licensed products for retail, concession and foodservice customers. Its offerings span soft pretzels, frozen novelties, real Italian ice, churros and packaged beverages under well-known names such as ICEE, SuperPretzel, Luigi's and ChurroMan. Founded in 1971 by Gerald B. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "J & J Snack Foods Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

MOUNT LAUREL, N.J., Aug. 05, 2026 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (Nasdaq: JJSF) today reported financial results for the third quarter ended June 27, 2026. * Prior year reported results included a $9.1 million non-recurring net gain primarily related to the receipt of insurance proceeds. This press release contains non-GAAP financial measures. Please refer to the Non-GAAP Financial Measures section below for reconciliations to the most comparable GAAP measures. "Fiscal 2026 has been a year of disciplined transformation, and that work continued to pay off in the third quarter," said Dan Fachner, President, and CEO of J&J Snack Foods. “We delivered Adjusted EBITDA of $67.4 million and Adjusted earnings per diluted share of $1.96, even as freight and fuel costs increased approximately $4.7 million during the quarter. Most of the net sales decline in the third quarter was attributed to anticipated sales reductions in bakery, and lower machine and service sales in the Frozen Beverage segment. Gross margin expanded 240 basis points to 35.5%, and Apollo-driven plant consolidation savings are running ahead of plan, giving us the confidence to raise our annualized plant savings target by $5 million to at least $20 million and the full program target to $25 million. Looking ahead, we expect the sales environment to improve in the fourth quarter as our pipeline fills for core products and recent headwinds diminish. We remain confident that the progress we have made repositioning this business will support durable earnings and a return to top-line growth in fiscal 2027." Third Quarter Results Net sales decreased 6.2% from the prior year quarter to $426.0 million. Food Service segment net sales decreased 8.3% Retail Supermarket segment net sales increased 1.7% Frozen Beverage segment net sales decreased 5.8% Gross profit increased from $150.0 million in the prior year quarter to $151.0 million, while gross margin improved from 33.0% to 35.5%. The improvement in gross margin primarily reflects our Apollo transformation initiatives and mix improvements. Total operating expenses of $104.7 million represented 24.6% of sales for the quarter, compared to 19.7% in the prior year quarter. The prior year quarter included a $9.1 million non-recurring net gain primarily related to insurance proceeds. Selling and Marketing expenses increased 2.3% to $34.6 million or 8.1% of sales, up from 7.5% in the prior year quarter. Distribution expenses increased 11.0% to $49.6 million or 11.6% of sales up from 9.8% in the prior year quarter. Distribution expenses included higher fuel and freight costs of approximately $5.0 million, excluding any fuel surcharge collections. Administrative expenses were materially flat in the quarter at $20.1 million or 4.7% of sales, up from 4.4% in the prior year quarter, reflecting the implementation of savings initiatives. Expenses included $0.6 million of non-recurring legal expenses. Operating income was $46.3 million, compared to $60.6 million in the prior year quarter, while adjusted operating income was $48.1 million, compared to $53.4 million in the prior year quarter. Results last year benefited from a $9.1 million non-recurring net gain primarily associated with the receipt of insurance proceeds. Earnings per diluted share were $1.88, compared to $2.26 in the prior year quarter, while adjusted earnings per diluted share were $1.96, compared to $2.00 in the prior year quarter. The effective tax rate was 23.2%, compared to 27.2% in the prior year quarter. Food Service Segment Net sales of $254.3 million, a year-over-year decrease of $22.9 million or 8.3%. Anticipated reductions in our bakery business represented approximately $16.0 million of the decline. Modest growth in pretzels and churros was more than offset by continued softness in cookies and handhelds, similar to the pattern we saw in the second quarter. Operating income increased $0.2 million to $28.1 million as higher distribution costs mostly offset improvements in gross profit. Retail Supermarket Segment Net sales of $64.9 million, a year-over-year increase of $1.1 million or 1.7%. We incurred a $2 million increase in slotting fees to support the rollout of recent innovation. Operating income decreased $3.5 million to $2.7 million, driven by the increase in slotting fees and higher distribution costs. Frozen Beverages Segment Net sales of $106.7 million, a year-over-year decrease of $6.5 million or 5.8%. Beverage sales were up $4.2 million while machine sales declined $7.3 million and service sales declined $3.4 million. Operating income decreased $0.9 million to $22.8 million. Share Repurchases During the quarter, we repurchased 135,852 shares of common stock for $10 million. As of June 27, 2026, there was $18 million remaining under the $50 million share repurchase program approved by the Board of Directors. Conference Call J&J Snack Foods Corp. will host a conference call to discuss results and business outlook today, August 5, 2026, at 10:00 a.m. Eastern Time. Investors interested in participating in the live call can pre-register by clicking on this Registration Link to receive the dial-in number and a personal PIN, which are required to access the conference call. The live audio webcast will be accessible on the Company’s investor relations website at https://www.jjsnack.com/investors/ or directly at here. About J & J Snack Foods Corp. J & J Snack Foods Corp. (Nasdaq: JJSF) is a leader and innovator in the snack food and frozen beverage industry. For over fifty years, the company has specialized in delicious snack and beverage brands for the foodservice and retail segments, serving up fun across the U.S. market. J & J Snack Foods’ core brands include SUPERPRETZEL, the #1 soft pretzel brand, ICEE and SLUSH PUPPIE frozen beverages, and Dippin’ Dots, the original beaded ice cream. The company’s broad brand portfolio also includes LUIGI’S Real Italian Ice, MINUTE MAID* frozen ices, WHOLE FRUIT frozen fruit bars, DOGSTERS ice cream style treats for dogs, ¡Hola! Churros, THE FUNNEL CAKE FACTORY funnel cakes and fries, and bakery brands including MARY B’S, DADDY RAY’S, COUNTRY HOME BAKERS, and HILL & VALLEY. For more information, please visit http://www.jjsnack.com. *MINUTE MAID is a registered trademark of The Coca-Cola Company. Cautionary Statement Regarding Forward-Looking InformationThis press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s expected future financial position, results of operations, revenue growth and profit levels, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “goals,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. This includes, without limitation, our statements, and expectations regarding any current or future recovery in our industry and the future impact of our operational efficiency projects. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of management. We do not undertake a duty to update such forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include consumer spending, price competition, acceptance of new products, the pricing and availability of raw materials, transportation costs, and other risks identified in our annual report on Form 10-K, and our other filings with the Securities and Exchange Commission. Many of these factors are outside of the Company’s control. Non-GAAP Financial Measures Adjusted EBITDA consists of net earnings adjusted to exclude: income taxes (benefit); investment income; interest expense; depreciation and amortization; share-based compensation expense; net (gain) loss on sale or disposal of assets; impairment charges, restructuring costs, merger and acquisition costs, acquisition related inventory adjustments, strategic business transformation costs, integration costs, non-recurring legal fee settlements, gain on insurance proceeds received for damage to property, plant and equipment, and plant closure expenses. Adjusted Operating Income consists of operating income adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustments, strategic business transformation costs, integration costs, non-recurring legal fee settlements, gain on insurance proceeds received for damage to property, plant and equipment, and plant closure expenses. Adjusted Earnings per Diluted Share consists of net earnings adjusted to exclude: impairment charges, restructuring costs, merger and acquisition costs, acquisition related amortization expenses and inventory adjustment, strategic business transformation costs, integration costs, non-recurring legal fee settlements, gain on insurance proceeds received for damage to property, plant and equipment, and plant closure expenses. For purposes of comparability, the income tax effect of pre-tax adjustments is determined using statutory tax rates. This press release contains certain non-GAAP financial measures; Adjusted EBITDA, Adjusted Operating Income, and Adjusted Earnings per Diluted Share. A "non-GAAP financial measure" is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP") in the statements of income, balance sheets, or statements of cash flow of the company. Pursuant to applicable reporting requirements, the company has provided reconciliations below of non-GAAP financial measures to the most directly comparable GAAP measure. The non-GAAP financial measures presented within the Company's earnings release are not indicators of our financial performance under GAAP and should not be considered as an alternative to the applicable GAAP measure. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating these non-GAAP measures, you should be aware that in the future we may incur income, expenses, gains and losses, similar to the adjustments in this press release. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence to our GAAP results and using non-GAAP measures only as supplemental presentations. The non-GAAP measures presented are utilized by management to evaluate the Company's business performance and profitability by excluding certain items that may not be indicative of our recurring core business operating results. The Company believes that these measures provide additional clarity for investors by excluding specific income, expenses, gains, and losses, in an effort to show comparable business operating results for the periods presented. Similarly, Management believes these adjusted measures are useful performance measures because certain items included in the calculations may either mask or exaggerate trends in the Company’s ongoing operating performance. See the reconciliation of Non-GAAP Financial Measures below. Investor Contact: Reed Anderson, ICR(646) 277-1260 [email protected]

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Gross margin expanded 240 basis points to 35.5%, driven by Project Apollo plant consolidation savings and improved sales mix. Retail segment sales grew 1.7%, with underlying growth in the mid-single-digit range when excluding a $2 million increase in slotting fees for new product rollouts. Strong brand performance in tracked channels, including Dogsters retail sales up over 30%, Luigi's up over 20%, and Dippin' Dots up more than 100%. Frozen beverage volume increased 5.9%, driven by strength in theater and mass merchandising channels, with an encouraging movie lineup ahead. Project Apollo savings target raised to at least $25 million annualized, with plant consolidation savings ahead of plan and G&A initiatives moderating administrative expenses. Balance sheet remains strong with $35 million net cash, $182 million in borrowing capacity, and $120 million returned to shareholders year-to-date. Net sales declined 6.2% to $426 million, with over half of the decline attributed to anticipated reductions in the bakery business. Adjusted EBITDA fell 6.4% to $67.4 million, primarily due to a $4.7 million increase in fuel and freight costs net of surcharge collections. Frozen beverage segment sales decreased 5.8% due to lower service and machine sales, partly from customer insourcing decisions and machine business cyclicality. Food service sales declined 8.3%, with continued softness in cookies and handhelds, including a major customer south of the border that has been weaker this year. Distribution expenses increased to 11.6% of sales from 9.8%, driven by higher freight and fuel costs of approximately $5 million. Retail segment operating income declined $3.5 million due to increased slotting fees and higher distribution costs. Warning! GuruFocus has detected 3 Warning Sign with JJSF. Is JJSF fairly valued? Test your thesis with our free DCF calculator. Q: Dan, you spoke to Headwinds Diminishing in Q4 in the earnings release. What are you speaking to specifically that eases in Q4, and what's your visibility into that happening?A: Dan Faschner, CEO: We hit the peak of the bakery SKU rationalization in Q3, and it tapers down to about a 2.5% headwind in Q4. We are closing the service revenue gap with a new signed contract with a big service organization that will get us back on track in Q4. Retail is doing great, with volumes outpacing promotions, and the slotting fees for new innovation are starting to diminish. We are also excited about the theater business, which has charged back strongly, highlighted by the record-breaking release of Spider-Man this past weekend. Q: If we shift to Project Apollo, you talked about a higher amount of annualized savings from the plant closure portion. Can you help us understand the drivers behind that and how we should think about the other components?A: Dan Faschner, CEO & Shawn Munsell, CFO: The team has done a tremendous job with the difficult work of consolidation. We raised the plant consolidation component of Apollo from $15 million to $20 million, which takes the total program from $20 million to $25 million in annualized savings. The costs of transitioning products have stabilized, which supports the higher number. The $20 million annualized is consistent with what we achieved in the third quarter, and we feel comfortable that this run rate will hold. Q: You've talked about Apollo as being in phases. Is there a second phase that could yield additional benefits, and can you give us a sense of the areas and timing?A: Dan Faschner, CEO: We are looking at what I would call "Apollo 27." We are examining areas like plant locations to get them closer to the point of distribution and any form of consolidation that could be done. We saw some of this work in the current quarter with G&A expenses being pulled back in line. We are still working on identifying exactly what this might mean for 2027 and will talk about it in the next quarter. Q: You expect a return to organic growth on a fuller basis in fiscal 2027. Do you think you can grow organically in the fourth quarter of 2026, or should we think about the business wins kicking in early in 2027?A: Dan Faschner, CEO: In Q4, we still have the planned obsolescence headwind of about 2.5%, so I wouldn't identify that as the inflection point. However, as we get into Q1 of fiscal 2027, with our current line of sight, we have a really good chance of seeing organic growth. The sales pipeline is about as strong as I've ever seen, so I would look more towards Q1 than Q4 for the return to growth. Q: Given the strong pipeline, are there any capacity considerations? Are you in good shape to service that demand, or will you need to make investments?A: Dan Faschner, CEO: No, we are in good shape. Most of this growth is coming from our core business, which are areas we have already invested in for capacity. What we are looking at right now will not require additional investments to achieve the sales growth we are targeting. Q: You've gone through a process to SKU rationalize parts of the bakery business. Is there more of that to do, or are you happy with the work and moving into a steady state?A: Dan Faschner, CEO: I don't see us having any more SKU rationalization or planned obsolescence at this point. We will continue to assess the entire portfolio to ensure it fits our goals, like achieving a 35.5% gross profit margin, but there is no additional SKU rationalization that needs to be done right now. Q: Excluding the bakery SKU rationalization, food service sales were still down a bit due to weakness in cookies and handhelds. Can you dive into what's happening and how you plan to stabilize that part of the portfolio?A: Dan Faschner, CEO: The weakness in cookies is an offshoot of buying being down, particularly with a major customer south of the border that has been softer this year. The handheld business is also lower margin and goes to a couple of big customers where other products have impacted sales. Our strategy is to grow the core. We have great churro growth and a big pretzel opportunity hitting in Q4, and frozen novelties are doing really well, including private label. The cookie gap improved a bit in Q3, but it needs to continue to grow. Q: What do you see for the organic growth outlook for the company in fiscal 2027, and what are the big drivers that give you visibility?A: Dan Faschner, CEO: We definitely see organic growth returning in 2027. We have good things happening in our core products of pretzels, churros, and frozen novelties. Theaters are coming back strong with a good movie lineup for 2027. We also have a test with a West Coast QSR operator for the frozen beverage business that we think will yield positive results. The sales team is hitting on all cylinders, and we will continue to see great results from innovation. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

J&J Snack Foods (JJSF) came out with quarterly earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.81 per share. This compares to earnings of $2 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.29%. A quarter ago, it was expected that this drink and snack maker would post earnings of $0.39 per share when it actually produced earnings of $0.4, delivering a surprise of +2.56%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. J&J Snack Foods, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $425.96 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.04%. This compares to year-ago revenues of $454.29 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. J&J Snack Foods shares have lost about 13% since the beginning of the year versus the S&P 500's gain of 13%. While J&J Snack Foods has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for J&J Snack Foods was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.45 on $400.5 million in revenues for the coming quarter and $4.00 on $1.52 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Armanino Foods of Distinction Inc. (AMNF), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Armanino Foods of Distinction Inc.'s revenues are expected to be $21.2 million, up 6.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report J & J Snack Foods Corp. (JJSF) : Free Stock Analysis Report Armanino Foods of Distinction Inc. (AMNF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year decline in earnings on lower revenues when J&J Snack Foods (JJSF) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This drink and snack maker is expected to post quarterly earnings of $1.81 per share in its upcoming report, which represents a year-over-year change of -9.5%. Revenues are expected to be $425.8 million, down 6.3% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 8.23% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For J&J Snack Foods, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #5. So, this combination makes it difficult to conclusively predict that J&J Snack Foods will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that J&J Snack Foods would post earnings of $0.39 per share when it actually produced earnings of $0.40, delivering a surprise of +2.56%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. J&J Snack Foods doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Sysco (SYY), another stock in the Zacks Food - Miscellaneous industry, is expected to report earnings per share of $1.51 for the quarter ended June 2026. This estimate points to a year-over-year change of +2%. Revenues for the quarter are expected to be $21.92 billion, up 3.7% from the year-ago quarter. The consensus EPS estimate for Sysco has been revised 0.1% lower over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +0.56%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Sysco will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report J & J Snack Foods Corp. (JJSF) : Free Stock Analysis Report Sysco Corporation (SYY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research