Milling & Baking News - May 7, 2019 - 17

Financial Results

J&J Snack Foods stays bullish on
sales growth in soft pretzels
PENNSAUKEN, N.J. - A strong performance from soft pretzels, a common
occurrence for J&J Snack Foods Corp.,
helped lift the company to increases in
net earnings and sales in the second quarter ended March 30. Innovation in soft
pretzels, especially in food service, could
come in future quarters.
J&J Snack Foods net earnings of
$20,354,000, or $1.08 per share on the common stock, were up 14% from $17,833,000,
or 95c per share, in the previous year's
second quarter. Net sales increased 4% to
$276,302,000 from $266,101,000.
Food service operating income at
J&J Snack Foods rose 6% in the second
quarter to $19,580,000 from $18,535,000.
Sales increased 1% to $181,425,000 from
$179,465,000. Within the food service
division, sales of bakery products were
$90,764,000, virtually unchanged from

the previous quarter, while sales of churros rose 3% to $15,770,000, and sales of
soft pretzels rose 2% to $49,812,000.
J&J Snack Foods about four years ago
began focusing on growing soft pretzel
sales in fast-food and other restaurant
businesses, said Gerald B. Shreiber, president and chief executive officer, in an
April 30 earnings call. Sales growth in
restaurants increased every year.
"It kind of has stabilized the last six
months or so although we are still growing in that sector, and we're still very, very
bullish on this sector going forward, but
soft pretzels are not new to that segment
anymore," he said. "They're in there, and
now we have to figure and tickle ways to
grow them each quarter."
In the retail supermarket segment in
the second quarter, operating income was
$2,641,000, up 4.2% from $2,534,000 in the
previous year's second quarter. Sales fell
1% to $27,809,000 from $28,084,000. Within the retail supermarket segment, sales
of soft pretzels rose 7% to $10,829,000,
primarily because of sales of Auntie
Anne's soft pretzels.
Speaking about potential new products
in all segments of the company, Mr. Shreiber said he knew of at least six projects
that were "moving along."
Companywide, net earnings for the
six-month period ended March 30 were
$37,880,000, or $2.02 per share on the
common stock, which was down 30%
from $54,082,000, or $2.90 per share,
bakingbusiness.com / world-grain.com

in the same time of the previous year.
Six-month net sales increased 3% to
$547,914,000 from $531,311,000.
Net earnings for the first six months
of the current fiscal year benefitted from
a reduction of about $900,000 in tax as
the one-time repatriation tax, which

resulted from the Tax Cuts and Jobs
Act enacted in December 2017, was
recorded on an estimated basis at Dec.
30, 2017, and was revised downward
in this year's first quarter. Net earnings
for the first six months of the previous
fiscal year benefitted from a $20.9 million gain on the re-measurement of deferred tax liabilities and were impacted
by a $1.2 million provision for the onetime repatriation tax. MBN

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Milling & Baking News

May 7, 2019 / 17

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Milling & Baking News - May 7, 2019

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