J & J Snack Foods (JJSF) investor relations material

Executive summary

• Net sales declined 6.2% year-over-year to $426 million in Q3 2026, mainly due to anticipated reductions in bakery and lower machine/service sales in Frozen Beverages.

• Gross profit improved to $151 million, with gross margin expanding to 35.5% (up from 33.0%), driven by transformation initiatives, plant closures, and favorable product mix.

• Adjusted EBITDA was $67.4 million, down 6.4% year-over-year, mainly due to higher freight and fuel costs.

• Operating income fell 23.6% to $46.3 million, impacted by higher distribution and operating expenses.

• Project Apollo drove cost savings and margin expansion, with plant consolidation savings ahead of target.

Financial highlights

• Net sales: $426 million for the quarter (down $28.3 million YoY); nine-month net sales: $1,114.6 million (down $58.4 million YoY).

• Gross profit: $151 million for the quarter (up $1 million YoY); gross margin: 35.5% (up 240–250 bps YoY).

• Adjusted EBITDA: $67.4 million, down from $72 million last year.

• Adjusted EPS: $1.96 (down 2.0% YoY); reported EPS: $1.88 (down 16.8% YoY).

• Operating cash flow: $48.8 million in Q3; capital expenditures: $18.1 million in Q3, $53.3 million for nine months.

Outlook and guidance

• Sales momentum is building, with improvement expected in Q4 as bakery headwinds diminish and core product pipelines fill.

• Anticipated return to sales growth in fiscal 2027, driven by new business and innovation.

• Project Apollo expected to generate $25 million in run-rate operating income by end of fiscal 2026, with full benefits in fiscal 2027 and beyond.

• No additional SKU rationalization planned; focus remains on core brands and innovation.

• Capacity investments not required for expected growth; existing infrastructure sufficient.