Pretzel sales help drive strong earnings at J&J Snack
PENNSAUKEN, N.J. — Net income at J&J Snack Foods Corp. in the first quarter ended Dec. 29 totaled $10,226,000, equal to 54c per share on the common stock, up 86% from $5,485,000, or 29c per share, in the same period a year ago.
Operating income in the first quarter of fiscal 2013 was $15,061,000, up 78% from $8,463,000 in the same period a year ago, while net sales rose to $191,408,000 from $172,686,000.
“Our sales growth of 10% this quarter before the benefit of acquisitions was very strong,” said Gerald B. Shreiber, president and chief executive officer, in a Jan. 29 conference call with analysts. “Sales of soft pretzels and of food service were extremely strong, and include new pretzel products such as sticks and soft pretzel buns and rolls for casual dining restaurants. Frozen juice bar and Icee sales in food service were down as we were impacted by the elimination of the U.S.D.A. school service program in this area of our business. We’re still looking for traction in our hand-held sales and food service, where sales were down 2%, but we remain very bullish on this category. Churros also did exceptionally well, as we began selling to a major fast-food restaurant chain.”
Sales to food service customers increased $17,118,000, or 15%, in the first quarter to $130,187,000. Excluding Kim & Scott’s sales, food service sales increased approximately 14% for the quarter.
Soft pretzel sales to the food service market increased 27% to $32,594,000 in the first quarter due to increased sales to restaurant chains, warehouse club stores and throughout the customer base. Increased sales to two customers accounted for approximately 50% of the increase in pretzel sales in the quarter. Without Kim & Scott’s, pretzel sales increased about 23%.
Sales of bakery products increased $7,485,000, or 12%, in the first quarter to $68,305,000 as sales increases were spread throughout J&J Snack’s customer base.
Sales of new products in the first 12 months since their introduction were approximately $4.8 million in the first quarter, J&J Snack said.
During the conference call, Mr. Schreiber addressed the break-up of Hostess Brands, Inc., noting that the door-to-door nature of the Irving, Texas-based company’s bread and snack cakes businesses were “not our sweet spot.”
“It would be really a little bit more transformational than we would like,” Mr. Schreiber said of any opportunities to take on Hostess brands or assets. “Keep in mind one of the reasons for our success, we have our niches and we do real well with them. Also, we are certainly cost-efficient, and there are barriers to entry to the product lines that we are the leader in. We want to continually improve our niches but make sure that we don’t extend too far from what we’re good at.”