J&J Snack Foods Corp. reported fourth‑quarter 2025 results that showed net sales of $410.2 million, a 3.9% decline from the $424.5 million recorded a year earlier. The drop was driven by a 10% decline in North American frozen‑beverage traffic linked to weaker movie‑theater attendance and a 7.1% fall in beverage volume caused by a weaker Mexican peso. The company’s pretzel business, however, delivered a 4.5% increase in retail and food‑service sales, offsetting some of the weakness in its frozen‑beverage segment.
Gross profit fell to $130.2 million, giving a gross margin of 31.7% versus 31.8% a year ago. The slight compression reflects a lower mix of higher‑margin frozen‑novelties and the addition of 35 basis points of tariff costs on raw materials. Operating income dropped to $11.5 million from $39.8 million, largely because operating expenses rose to $118.8 million—29.0% of sales—up from 22.4% a year earlier. The increase was driven by $24.1 million in non‑recurring plant‑closure charges, $0.8 million in intangible‑asset impairment, and modest rises in marketing, selling, and administrative costs.
Net earnings were $11.4 million, down 61% from $29.6 million a year earlier. GAAP earnings per share were $0.58, a 55% miss against the consensus estimate of $1.29, while adjusted EPS of $1.58 beat the consensus of $1.24 by $0.34. The adjusted‑EPS beat was largely due to disciplined cost management that kept operating margins near 30% despite the revenue decline, and the company’s focus on high‑margin product launches such as the Dippin’ Dots sundae and churro innovations.
Management emphasized that the company’s “breadth of portfolio remains a core competitive advantage” and that pretzel sales growth would continue to support the business. CEO Dan Fachner noted that the company “delivered adjusted EBITDA of $57.4 million on sales of $410.2 million, down 3.9% on sales versus the prior year” and that “over half of the sales decline was associated with our frozen beverage business as we lapped strong volumes from the Inside Out 2 movie last year.” The company also highlighted Project Apollo, a transformation program expected to generate $20 million in annual operating‑income gains once fully implemented.
The company’s balance sheet remains strong, with $48.5 million in cash and no long‑term debt. A $212.7 million revolving credit facility provides liquidity for capital expenditures and share repurchases. Operating cash flow for the first six months of fiscal 2025 was $47.5 million, underscoring the firm’s ability to fund growth initiatives while returning value to shareholders. Guidance for the full year remains unchanged, with expectations of modest sales growth and a return to the low‑31% margin range, reflecting confidence that cost‑saving measures and new product launches will offset current headwinds.
The results illustrate a company navigating a challenging quarter marked by external headwinds—such as theater traffic declines, currency fluctuations, and tariff costs—while leveraging its diversified product mix and disciplined cost controls to maintain profitability. The adjusted‑EPS beat signals that the company’s operational initiatives are beginning to pay off, and the management outlook suggests a focus on sustaining margin improvement and expanding high‑margin product lines in the second half of fiscal 2025.
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