J&J Snack Foods raises plant savings target as sales slide
The snack maker reported third-quarter net sales of $426.0 million, a 6.2% decrease from the prior year.
J&J Snack Foods (JJSF), the snack maker, reported a decline in net sales for the third quarter ended June 27, 2026. Net sales fell 6.2% to $426.0 million from $454.3 million in the prior year quarter.
Despite the drop in top-line revenue, the company saw gross margin expand 240 basis points to 35.5%, up from 33.0% in the prior year. This improvement was due to mix shifts and its Apollo transformation initiatives.
Operating income decreased 23.6% to $46.3 million. The decline was partly due to the absence of a $9.1 million non-recurring net gain from insurance proceeds that had benefited the prior year's results. Adjusted EBITDA fell 6.4% to $67.4 million, impacted by approximately $4.7 million in higher fuel and freight costs.
Performance varied across business segments. Net sales in the Food Service segment decreased 8.3%, with approximately $16.0 million of that decline stemming from anticipated reductions in the bakery business. In the Frozen Beverage segment, net sales fell 5.8% to $106.7 million. While beverage sales rose $4.2 million, machine sales declined $7.3 million and service sales dropped $3.4 million.
The Retail Supermarket segment saw net sales increase 1.7% to $64.9 million. However, operating income for that segment decreased by $3.5 million, due to a $2 million increase in slotting fees and higher distribution costs. Overall distribution expenses rose 11.0% to $49.6 million, representing 11.6% of sales compared with 9.8% in the prior year.
J&J Snack Foods raised its annualized plant savings target by $5 million to at least $20 million, with a full program target of $25 million. Apollo-driven consolidation savings are running ahead of plan.
During the quarter, the company repurchased 135,852 shares for $10 million. This leaves $18 million remaining under its $50 million share repurchase program.