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1. Company Snapshot

1.a. Company Description

J&J Snack Foods Corp.manufactures, markets, and distributes nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada.It operates in three segments: Food Service, Retail Supermarkets, and Frozen Beverages.


The company offers soft pretzels under the SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR.TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT'S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE'S, and LABRIOLA, as well as under the private labels.It also provides frozen novelty under the LUIGI'S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE, and MINUTE MAID brands; churros under the TIO PEPE'S and CALIFORNIA CHURROS brands; and handheld products under the SUPREME STUFFERS and SWEET STUFFERS brands.


In addition, the company offers bakery products, including biscuits, fig and fruit bars, cookies, breads, rolls, crumbs, muffins, and donuts under the MRS.GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and HILL & VALLEY brands, as well as under private labels; and frozen beverages under the ICEE, SLUSH PUPPIE, and PARROT ICE brands.Further, it provides funnel cakes under the FUNNEL CAKE FACTORY brand, as well as various other food products; and sells machines and machine parts to other food and beverage companies.


The company sells its products through a network of food brokers, independent sales distributors, and direct sales force.It serves snack bars and food stand locations in chain, department and mass merchandising stores, malls and shopping centers, fast food and casual dining restaurants, stadiums and sports arenas, leisure and theme parks, convenience stores, movie theatres, warehouse club stores, schools, colleges and other institutions, and independent retailers.The company was incorporated in 1971 and is headquartered in Pennsauken, New Jersey.

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1.b. Last Insights on JJSF

J&J Snack Foods Corp.'s recent performance was positively driven by strong Q1 2026 earnings, with the company reporting earnings of $0.33 per share, beating the Zacks Consensus Estimate of $0.32 per share. The company's cost-cutting plans, including Project Apollo, aim to achieve $20 million in annual cost savings. Additionally, the company's strong net cash position and new product launches are expected to drive growth. Institutional investors, such as Bank of New York Mellon Corp, have also shown confidence in the company, increasing their holdings.

1.c. Company Highlights

2. J&J Snack Foods' Q1 Results Show Project Apollo's Early Benefits

J&J Snack Foods delivered a mixed bag in its first quarter, with adjusted EBITDA rising 7% to $27 million on the back of operational excellence and Project Apollo transformation initiatives, while net sales declined 5.2% to $343.8 million. Gross margin improved 200 basis points to 27.9% versus the prior year, driven by early Apollo savings associated with plant consolidation and improved product mix. Earnings per share (EPS) came in at $0.33, beating estimates of $0.32. The revenue decline was partly attributed to the bakery business, with the company focusing on higher-margin opportunities.

Publication Date: Feb -08

📋 Highlights
  • Adjusted EBITDA Growth:: Increased 7% to $27 million in Q1, driven by Project Apollo initiatives and operational efficiency.
  • Gross Margin Expansion:: Rose 200 basis points to 27.9%, reflecting early savings from plant consolidation and product mix improvements.
  • Net Sales Decline:: Fell 5.2% to $343.8 million, with $18 million attributed to bakery business exit and SKU rationalization.
  • Share Repurchases:: Completed $42 million repurchase program and authorized a new $50 million buyback, signaling confidence in capital returns.
  • Project Apollo Savings:: Generated $3 million in Q1, with $20 million annual run rate expected post-initiative activation.

Operational Highlights and Project Apollo Progress

The company's Project Apollo is progressing as planned, with over $3 million of net savings realized in Q1 and a run rate of $20 million of operating income expected once all initiatives are activated. According to Dan Fachner, CEO, the transformation project "has taken hold," with early benefits combined with pretzel growth and a strong innovation pipeline positioning the company well for fiscal 2026.

Share Repurchase and Capital Allocation

J&J Snack Foods completed its share repurchase authorization by purchasing $42 million of stock and announced a new $50 million repurchase authorization, demonstrating its commitment to returning capital to shareholders. The company's strong balance sheet provides flexibility to invest in growth and return capital to shareholders, enabling long-term value creation.

Valuation and Outlook

With a P/E Ratio of 25.99 and EV/EBITDA of 10.34, the market appears to be pricing in a moderate growth outlook. Analysts estimate next year's revenue growth at 1.7%. The company's guidance for low single-digit growth for the entire year, despite a 3% headwind from SKU rationalization, suggests a steady recovery. With a focus on higher-margin opportunities and operational excellence, J&J Snack Foods is building momentum for sustainable growth.

Dividend Yield and Return on Equity

The company's Dividend Yield stands at 3.83%, indicating a relatively attractive income proposition. Additionally, the Return on Equity (ROE) of 6.48% suggests a decent return on shareholders' capital. The Net Debt / EBITDA ratio of 0.59 indicates a manageable debt burden, providing further support for the company's capital allocation strategy.

3. NewsRoom

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Chuck Royce's Strategic Moves: Significant Reduction in Haemonetics Corp

Feb -09

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J&J Snack Foods' Expected Margin Gains May Already Be Priced In

Feb -06

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J & J Snack Foods (NASDAQ:JJSF) Stock Price Up 8.1% on Strong Earnings

Feb -05

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J&J Snack Foods (JJSF) Loses 11% in 4 Weeks, Here's Why a Trend Reversal May be Around the Corner

Feb -04

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J&J Snack Foods Corp. (JJSF) Q1 2026 Earnings Call Transcript

Feb -03

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4 Miscellaneous Food Stocks Poised for Growth in a Difficult Market

Feb -03

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J&J Snack Foods (JJSF) Q1 Earnings Top Estimates

Feb -03

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J & J Snack Foods Reports Fiscal 2026 First Quarter Results

Feb -03

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.77%)

6. Segments

Food Service

Expected Growth: 2.5%

J&J Snack Foods Corp.'s Food Service segment growth of 2.5% is driven by increasing demand for convenient and portable food options, expansion into new channels such as education and healthcare, and strategic partnerships with major foodservice providers. Additionally, the company's focus on innovation, quality, and customer service has enabled it to maintain market share and attract new customers.

Frozen Beverages

Expected Growth: 3.5%

J&J Snack Foods Corp.'s Frozen Beverages segment growth of 3.5% is driven by increasing demand for convenient and healthy beverages, expansion into new distribution channels, and strategic product innovations such as organic and low-calorie offerings. Additionally, the segment benefits from a strong brand portfolio and effective marketing campaigns.

Retail Supermarket

Expected Growth: 2.8%

The 2.8% growth in Retail Supermarket segment of J&J Snack Foods Corp. is driven by increasing demand for convenient and healthy snacks, expansion of distribution channels, and strategic partnerships with major retailers. Additionally, the company's focus on innovation and new product launches, such as better-for-you options, has contributed to the growth.

7. Detailed Products

Soft Pretzels

Soft, freshly baked pretzels perfect for snacking or as a complement to meals

Frozen Juices

Frozen juice concentrates and ready-to-drink juices for schools, institutions, and foodservice providers

Churros

Cinnamon sugar-coated fried dough pastries, perfect for snacking or as a dessert

Funnel Cakes

Deep-fried batter topped with powdered sugar, perfect for fairs and festivals

Beverages

Frozen and bottled beverages, including iced tea, lemonade, and fruit flavors

Muffins and Baked Goods

Freshly baked muffins, cookies, and other sweet treats

Frozen Desserts

Frozen treats, including ice cream, gelato, and frozen yogurt

8. J&J Snack Foods Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

J&J Snack Foods Corp. operates in a competitive industry with many substitutes available, but the company's strong brand recognition and diversified product portfolio mitigate the threat of substitutes.

Bargaining Power Of Customers

J&J Snack Foods Corp. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are not highly customized, reducing the dependence on specific customers.

Bargaining Power Of Suppliers

J&J Snack Foods Corp. relies on a few large suppliers for its raw materials, giving them some bargaining power. However, the company's scale and diversification of suppliers mitigate this risk.

Threat Of New Entrants

The snack food industry has high barriers to entry, including significant capital requirements and established distribution networks. This makes it difficult for new entrants to compete with J&J Snack Foods Corp.

Intensity Of Rivalry

The snack food industry is highly competitive, with many established players competing for market share. J&J Snack Foods Corp. must continually innovate and invest in marketing to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.80%
Debt Cost 5.31%
Equity Weight 88.20%
Equity Cost 6.65%
WACC 6.49%
Leverage 13.37%

11. Quality Control: J&J Snack Foods Corp. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 5.0/10

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Growth: 5.9

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A-Score: 4.3/10

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Quality: 6.8

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

82.62$

Current Price

82.62$

Potential

-0.00%

Expected Cash-Flows