Soft pretzel sales lead to stronger J&J results

by Jeff Gelski
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J&J Snack Foods food service soft pretzel nuggets
Soft pretzels sales in the food service segment increased 7% for J&J Snack Foods.

PENNSAUKEN, N.J. — Soft pretzel sales in the food service segment increased 7% for J&J Snack Foods Corp. in the first quarter ended Dec. 24, 2016, leading the overall company to a net earnings increase of 4% and a net sales increase of 1%.

Gerald Schreiber, J&J Snack Foods Corp.
Gerald B. Shreiber, president and c.e.o. of J&J Snack Foods

“Overall, we are satisfied with our results for the quarter,” said Gerald B. Shreiber, president and chief executive officer of Pennsauken-based J&J Snack Foods, when results were reported Jan. 23. “Our food service did particularly well led by strong sales of soft pretzels.”

Earnings of $13,540,000, or 72c per share on the common stock, compared with $12,978,000, or 69c per share, in the previous year’s first quarter. Net sales of $225,570,000 were up from $222,850,000.

Sales within food service increased 2% to $150,297,000 from $146,752,000. Soft pretzel sales jumped to $41,494,000 from $38,699,000 due primarily to higher sales to restaurant chains, convenience stores and school food service.

J&J Snack Foods food service frozen juices
J&J Snack Foods expects food service sales of frozen juices and ices to improve in the second quarter.

Also within food service, J&J Snack Foods expects sales of frozen juices and ices, as well as bakery products, to improve in the second quarter. Frozen juices and ices sales in the first quarter fell 10% to $7,479,000 primarily because of lower sales to school food service and warehouse club stores. Sales to one school district, which accounted for about half of the sales decline, should resume in the second quarter.

Sales of bakery products in the first quarter dipped 2% to $75,279,000. Sales decreases of about $5.5 million to three customers largely were offset by increases of $3.8 million to three other customers. J&J Snack Foods expects sales to two customers whose sales were down $2.9 million to level off or begin to increase in the second quarter.

Churro sales in food service increased 4% in the first quarter to $14,438,000. Operating income within the food service segment was $17,054,000, up from $15,902,000.

J&J Snack Foods food service churros
Churro sales in food service increased 4% in the first quarter.

Coupons had an impact on the retail supermarkets segment, which saw sales increase 2% in the first quarter to $21,619,000. Soft pretzel sales rose 2% to $8,944,000, primarily because of an increased use of coupons.

Sales of frozen juices and ices increased 9% to $9,851,000 in the first quarter. Coupon redemption costs, which reduced sales, increased 119%, or about $685,000, for the quarter. Handheld sales fell 11% to $3,450,000.

Operating income in the retail supermarkets segment decreased to $1,046,000 from $1,090,000 in the first quarter, primarily because of higher coupon and advertising expenses, which were offset largely by increased product sales.

J&J Snack Foods Whole Fruit frozen juice pops
Sales of frozen juices and ices increased 9% to $9,851,000 in the first quarter.

Frozen beverage and related product sales dipped 2% to $53,654,000 in the first quarter. Within the segment, sales of beverage machines dropped 19% to $1,693,000. Sales of the machines tend to fluctuate from year to year and follow no specific trend, according to J&J Snack Foods.

Beverage-related sales alone were up 1%. Operating income in the frozen beverage segment dropped to $1,227,000 in the first quarter from $1,368,000 in the previous year’s first quarter. 
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