Snack food company J&J Snack Foods (NASDAQ:JJSF) fell short of analysts' expectations in Q1 FY2024, with revenue flat year on year at $348.3 million. It made a non-GAAP profit of $0.52 per share, improving from its profit of $0.42 per share in the same quarter last year.
Is now the time to buy J&J Snack Foods? Find out by reading the original article on StockStory.
J&J Snack Foods (JJSF) Q1 FY2024 Highlights:
- Revenue: $348.3 million vs analyst estimates of $362.9 million (4% miss)
- EPS (non-GAAP): $0.52 vs analyst expectations of $0.78 (33.3% miss)
- Free Cash Flow of $29.02 million, down 23.8% from the previous quarter
- Gross Margin (GAAP): 27.2%, up from 25.9% in the same quarter last year
- Market Capitalization: $3.1 billion
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
Packaged FoodAs America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods, prepared meals, or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options.
Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences.The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales GrowthJ&J Snack Foods is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 16.7% over the last three years was impressive for a consumer staples business.
This quarter, J&J Snack Foods missed Wall Street's estimates and reported a rather uninspiring 0.9% year-on-year revenue decline, generating $348.3 million in revenue.
Key Takeaways from J&J Snack Foods's Q1 Results We struggled to find many strong positives in these results. Its revenue, operating margin, and EPS all missed analysts' estimates. This weakness was driven by a 4.1% year-on-year decline in its Food Service segment, which includes pies and cookies. Two bright spots (but not enough to move the needle) were its Churros and Frozen Beverages categories, which grew 8.9% and 8.5%, respectively. Overall, the results could have been better. The stock is flat after reporting and currently trades at $155 per share.
