J&J Snack loading up pretzel firepower
Nov. 11, 2013
by Eric Schroeder
PENNSAUKEN, N.J. — Cool weather conditions in the northeast may have crimped retail supermarket sales, but demand for churros and soft pretzel products were more than enough to catapult sales and earnings at J&J Snack Foods Corp. in fiscal 2013. Net income in the year ended Sept. 28 was $64,381,000, equal to $3.43 per share on the common stock, up 19% from $54,118,000, or $2.87 per share, in fiscal 2012. Net sales increased 4% to $867,683,000 from $830,796,000.
Pretzels, especially, have been a big win for J&J Snack over the past year.
“I don’t like to name specific customers in there, but we’re selling some majors, and we have interest from other majors, and it’s not just pretzel buns, it’s something called pretzel sticks,” Gerald B. Shreiber, president and chief executive officer, said during a Nov. 8 conference call with analysts. “And now, customers want special sizes of pretzel sticks and special sizes of pretzel buns. In the last, maybe, three months, we have refitted our — we have added pretzel productivity to our plant in Weston, Ore. And we have added a full line to our Bellmawr (N.J.) plant, which is about 15 minutes from here, and we have added a line converted at our Chambersburg (Pa.) plant. So we have all this firepower out there, and we’re loading it up now.”
Sales to food service customers increased 8% during fiscal 2013 to $560,759,000, with soft pretzel sales to the food service market increasing 23% to $145,026,000. J&J Snack said increased sales to two customers accounted for approximately one-third of the pretzel sales increase during the year.
At retail, soft pretzel sales increased 2% to $34,597,000, up from $33,842,000 in fiscal 2012.
Another area of growth for J&J Snack during fiscal 2013 was churros. Since acquiring California Churros in June 2010 J&J Snack has managed to build up its churros business, and in fiscal 2013 sales of churros to food service customers increased 22% to $56,099,000, buoyed by sales to one restaurant chain.
“We continue to push new avenues, new opportunities with churros,” Mr. Shreiber said. “But I cannot project that we are going to be reaching those strong double-digit growth with churros for next year. Although we are looking at some opportunities, both around the country and internationally, so we expect to have continued growth in churros. But we think that the food service pretzels and the new varieties will outpace that, percentage-wise.”
Overall bakery products sales to food service markets increased 3% during fiscal 2013, rising to $274,783,000 from $266,192,000.
J&J Snack said sales of frozen juice bars and ices to food service markets fell 9% in fiscal 2013, to $48,831,000 from $53,813,000. Frozen juices and ices sales also decreased in the retail supermarket category, falling 10% to $48,077,000 from $53,673,000.