John B Sanfilippo & Son (JBSS) investor relations material

Executive summary

• Q1 FY2027 net sales fell 3.5% to $288.1M; volume was flat at 90.5M pounds, while diluted EPS declined 30.2% YoY to $1.11.

• Volume was stable or improving for a third consecutive quarter, and diluted EPS rose more than 50% QoQ; Jasper Sanfilippo became CEO as Jeff moved to Executive Chairman.

Financial highlights

• Net sales decreased $10.5M YoY; weighted average selling price per pound fell 3.6%, while pounds sold were essentially flat.

• Net income was $13.2M versus $18.7M; diluted EPS was $1.11 versus $1.59, and operating income was $19.3M versus $27.0M.

• Gross profit fell $5.2M, or 9.6%, to $48.9M; gross margin declined to 17.0% from 18.1%.

• Operating expenses rose $2.5M to $29.6M, driven by freight, rent, professional and consulting fees, legal costs and compensation.

• Operating cash flow was $10.6M versus $32.1M; capital expenditures were $8.7M versus $24.9M, and ending cash was $2.0M.

Outlook and guidance

• Incremental Contract Manufacturing volume is expected to replace a significant portion of lost Consumer volume, though the shift is expected to create a less favorable sales mix.

• New Contract Manufacturing customer volume was 7.9M pounds in Q1 and is expected to maintain and grow over the next several quarters.

• Pricing actions are scheduled for early January or early February, depending on the customer; gross margin impact remains uncertain pending commodity acquisition costs.

• Benefits from high-speed fruit and grain, chewy and protein lines are expected in fiscal Q4; protein shipments are expected to begin at Q4-end and into Q1.

• Management priorities include improving Consumer performance, expanding protein-forward bars and nut and trail mix, and pursuing profitable growth, operational excellence and disciplined capital allocation.