MOUNT LAUREL, NJ. — Growth across all three business segments, highlighted by all-time record-high sales and profitability in the recently acquired Dippin’ Dots business, contributed to strong financial performance at J&J Snack Foods Corp. in the fourth quarter and full year.
Net earnings in the fiscal year ended Sept. 30 totaled $78.91 million, equal to $4.10 per share on the common stock, up 67% from $47.23 million, or $2.47 per share, in fiscal 2022. Net sales of $1.56 billion were up 13% from $1.38 billion. Operating expenses increased to 23.1% of sales, up from 22.3% in fiscal 2022. The increase reflected the addition of a higher-expense Dippin’ Dots business for a full year compared with just a one-quarter impact in fiscal 2022.
In the fourth quarter, net earnings of $30.42 million, or $1.58 per share, were up 76% from $17.3 million, or 90¢ per share, in the same period a year ago. Net sales increased 10.8% to $443.86 million from $400.43 million.
“J&J had a great ending to our fiscal year,” Daniel Fachner, president and chief executive officer, said during a Nov. 16 conference call with analysts. “We delivered record-high net sales and profitability for both the 3- and 12-month periods with improved gross profit margins. Our results underscore the tremendous progress we are making across the organization, thanks to the dedicated efforts of our employees and the positive impact of the strategic initiatives undertaken over the past two years.
“Our top-line results marked the sixth consecutive quarter and the third consecutive year of double-digit net sales growth, totaling $443.9 million, up 10.8% for the quarter and $1.56 billion, up 12.9% for the year, reflecting $178 million in incremental sales. More importantly, our results were driven by continued growth across all three of our business segments on both a quarterly and a full-year basis, highlighting the health of our business and consumer appeal for our products and brands. I am pleased with the success of our work to improve margins and drive profitability.”
The strong results sent J&J Snack Foods’ stock to a near 52-week high, climbing to $176.38 on Nov. 16 before closing at $168.39 for the day. The company’s share price closed at $160.86 on Nov. 15.
In the Foodservice division, operating income in fiscal 2023 surged 169% to $47.78 million from $18.51 million. Sales jumped 12.5% to $981.84 million from $872.69 million.
Operating income in the Retail Supermarket segment was narrowly lower, easing to $9.38 million in fiscal 2023 from $9.49 million in fiscal 2022. Retail Supermarket sales increased 8.8% to $215.43 million from $197.94 million.
In the Frozen Beverages segment, operating income increased 49% in the full year to $50.37 million from $33.8 million, while sales rose 17% to $361.56 million from $310.03 million.
Mr. Fachner highlighted three brands during the conference call: SuperPretzel, Hola! Churros and Dippin’ Dots.
Acquired in June 2022, Dippin’ Dots stood out in fiscal 2023 as “the best example of how we are executing product development and leveraging cross-selling opportunities,” Mr. Fachner said.
He said Dippin’ Dots’ sales and income increased more than 13% and 80%, respectively, in the first year under J&J Snack’s ownership. He said the company is bringing new flavors to market, including an Icee cherry and Icee blue raspberry flavor. J&J Snack also plans to launch a new cookie dough offering called Frozeti Dough under the Dippin’ Dots brand in 2024, he said.
First-year success also was noted for Hola! Churros, Mr. Fachner said. He said J&J Snack added production capacity this year in support of a strong pipeline of growth opportunities for the product. Mr. Fachner also said J&J Snack has completed a market test with a major quick-service restaurant chain for Hola! Churros that will begin to roll out systemwide in early 2024.Growth in the company’s SuperPretzel brand took shape in the form of expanded retail availability. Mr. Fachner said SuperPretzel became available in Walgreens during 2023 while Pretzel Dogs entered new retail outlets. In addition, SuperPretzel Bavarian sticks were introduced in major grocery and mass merchant customers during the year. In fiscal 2024, J&J Snack plans to launch a systemwide pretzel croissant with a strategic convenience customer as well as add fresh baked SuperPretzel Bavarian sticks and buns to the in-store bakery category of several strategic customers, Mr. Fachner said.