John B. Sanfilippo & Son, Inc. (JBSS), the mum or dad firm of Fisher Nuts, reported robust monetary outcomes for the fourth quarter of fiscal 2024, surpassing $1 billion in annual gross sales for the primary time.
The corporate’s profitable integration of the Lakeville bar facility performed a big function on this milestone, contributing to a 15.1% enhance in web gross sales for the quarter.
Regardless of going through headwinds equivalent to decreased promoting costs, lowered gross sales quantity, and manufacturing inefficiencies, which led to a lower in gross revenue for the quarter, Sanfilippo stays optimistic in regards to the future.
Key Takeaways
- Sanfilippo achieved over $1 billion in gross sales for the primary time.
- Internet gross sales for This autumn rose by 15.1% to $269.6 million, pushed by the Lakeville acquisition.
- Gross revenue for This autumn decreased by 8.6% to $50 million.
- The annual dividend was raised, and a particular dividend is to be paid on September 11, 2024.
- Internet revenue for the fiscal yr was $60.2 million, or $5.15 per diluted share.
Firm Outlook
- Sanfilippo plans to develop its personal model bar portfolio and manufacturing capabilities.
- They’re specializing in rebuilding their nut and path combine enterprise.
- Steady enchancment initiatives and investments in manufacturers and processes are underway to boost customer support and shareholder worth.
Bearish Highlights
- Gross revenue for the quarter decreased as a consequence of decrease promoting costs and gross sales quantity, together with manufacturing inefficiencies.
- Complete working bills elevated, primarily from incentive and fairness compensation.
- Sure subcategories, together with recipe nuts, snack nuts, and snack bars, skilled declines in gross sales.
Bullish Highlights
- The snack and diet bar providing generated $131 million in web gross sales.
- The Southern model nut model and Orchard Valley Harvest carried out higher than their respective subcategories.
- The corporate has seen 5 consecutive years of file earnings previous to this yr.
Misses
- Internet revenue for fiscal 2024 was down from the earlier yr, at $60.2 million in comparison with $62.9 million.
- Gross sales within the snack class declined, although there was an enchancment in comparison with the earlier quarter.
- Non-public label bars continued to realize market share regardless of a decline within the general snack bar class.
Q&A Highlights
- The corporate addressed challenges within the snack class and elevated prices for chocolate and cashew nuts.
- Plans for promotional actions and new product launches are in place to have interaction shoppers extra successfully.
- Sanfilippo is optimistic about overcoming present challenges and specializing in progress and profitability.
InvestingPro Insights
John B. Sanfilippo & Son, Inc. (JBSS) has demonstrated resilience and strategic foresight in its monetary efficiency. In response to InvestingPro knowledge, the corporate boasts a market capitalization of $1.1 billion, reflecting its vital presence within the business. The P/E ratio, an indicator of the corporate’s valuation, stands at 18.35, with a slight enhance to 18.86 when adjusted for the final twelve months as of This autumn 2024. This means that traders are prepared to pay a premium for the corporate’s earnings, maybe as a consequence of its constant profitability and progress potential.
Income progress is one other vibrant spot, with a 6.71% enhance over the past twelve months as of This autumn 2024, and an much more spectacular quarterly surge of 15.09% in This autumn 2024. This aligns with the corporate’s report of surpassing $1 billion in annual gross sales. The gross revenue margin throughout this era stands at 20.07%, indicating a wholesome distinction between the price of items offered and web gross sales.
An InvestingPro Tip highlights that JBSS’s money flows can sufficiently cowl its curiosity funds, which is a robust indicator of economic well being and its skill to handle debt responsibly. Moreover, the corporate’s liquid belongings surpass its short-term obligations, offering additional proof of its stable monetary footing. These elements might contribute to the administration’s confidence in elevating the annual dividend and issuing a particular dividend to its shareholders.
For these concerned about a deeper evaluation, InvestingPro presents further recommendations on JBSS, together with insights on the corporate’s average stage of debt and its excessive return over the past decade, which may very well be notably helpful for traders contemplating the corporate’s long-term efficiency.
InvestingPro has 6 further suggestions listed for JBSS, offering a complete view of the corporate’s monetary well being and funding potential. For detailed evaluation and extra knowledgeable suggestions, traders can go to InvestingPro’s devoted web page for John B. Sanfilippo & Son, Inc. at https://www.investing.com/professional/JBSS.
Full transcript – John B Sanfilippo & Son Inc (JBSS) This autumn 2024:
Jeffrey Sanfilippo: [Technical Difficulty] 2024 Fourth Quarter Earnings Convention Name. Thanks for becoming a member of us. On the decision with me as we speak is Frank Pellegrino, our CFO; and Jasper Sanfilippo, our COO. We might make some forward-looking statements as we speak. These statements are based mostly on our present expectations they usually contain sure dangers and uncertainties. The elements that would negatively influence outcomes are defined within the varied SEC filings that we have now made, together with Types 10-Okay and 10-Q. We encourage you to discuss with the filings to study extra about these dangers and uncertainties which can be inherent in our enterprise. I’m proud to report a profitable and historic fiscal 2024 as we exceeded $1 billion in gross sales for the primary time in our firm’s historical past. We additionally efficiently executed a key part of our strategic plan by additional diversifying our product choices by way of the acquisition, integration and optimization of our Lakeville bar facility and operations. We raised our annual dividend by 6.3% to $0.85 per share and supplemented our annual dividend with a further particular dividend of $1.25 per share, each of which might be paid on September 11, 2024. These outcomes have been as a consequence of our workforce’s unyielding perseverance and management as we navigated by way of a difficult working atmosphere in fiscal 2024. Moreover, we acknowledged and rewarded our proficient workforce members for his or her excellent contributions in executing our strategic plan. I’m so pleased with our associates throughout the corporate who labored arduous on increasing our product portfolio. Their dedication to high quality, service and innovation, their dedication to our prospects and shoppers is exceptional. Our snack and diet bar providing generated roughly $131 million in web gross sales for the fiscal yr, of which $120 million was associated to the Lakeville acquisition. As well as, we made substantial progress in optimizing the operations in Lakeville forward of schedule and are excited in regards to the anticipated influence it’ll have on our working ends in fiscal 2025 and past. By way of the arduous work of our workforce, our web gross sales from Lakeville operations have been on the high finish of our authentic vary and dilution per share from the Lakeville acquisition. Within the final — and for the fiscal yr was roughly $0.17 per share, which was considerably higher than our authentic anticipated per share dilution of $0.80 to a $1.00. For the previous fiscal yr, our client channel has confronted vital headwinds with declining consumption as a consequence of inflation and different financial elements within the snack, path and recipe nut classes. Our fourth quarter outcomes, though robust, have been impacted by investments we made with our prospects what we anticipate will ship future advantages by way of class progress and elevated gross sales quantity. Trying forward for fiscal ’25, we’re targeted on accelerating our quantity progress by increasing on the success of our personal model bar portfolio, rebuilding our nut and path enterprise by way of value, pack structure and innovation, and increasing our manufacturing capabilities. We not too long ago leased a brand new 400,000 sq. foot warehouse in Huntley, Illinois, just some miles from our Elgin headquarters. We plan to maneuver our warehouse operations to that facility, which can release about 250,000 sq. toes of area to develop manufacturing, bars and nut and path combine packaging. We’re assured we will proceed to ship robust working outcomes and create long-term worth for our shareholders by way of the execution of our lengthy vary plan to grow to be a $2 billion enterprise. We’re nuts about creating actual meals that brings pleasure, nourishes folks and protects the planet. JBSS is executing on that mission. I will now flip the decision over to Frank to debate our monetary efficiency.
Frank Pellegrino: Thanks, Jeffrey. Beginning with the revenue assertion. Internet gross sales for the fourth quarter of fiscal 2024 elevated 15.1% to $269.6 million in comparison with web gross sales of $234.2 million for the fourth quarter of fiscal 2023. Internet gross sales for the present fourth quarter included roughly $44.2 million of web gross sales within the Lakeville acquisition. Excluding the Lakeville acquisition, web gross sales decreased $8.9 million, or 3.8%. Decline was as a consequence of a 1.9% lower in gross sales quantity, which is outlined as pound offered to prospects mixed with a 1.9% lower within the weighted common gross sales value per pound. The lower within the weighted common promoting value primarily resulted from decrease promoting costs for all main nut sorts as a consequence of aggressive pricing pressures and strategic pricing selections. Gross sales quantity declined for peanuts, almonds, pecans and walnuts, which was partially offset by gross sales quantity will increase for cashews and snack and path combine within the fourth quarter. Gross sales quantity elevated 31% within the client distribution channel, primarily as a consequence of Lakeville acquisition. Gross sales quantity predominantly consists of personal model bars and accounted for a 35.4% enhance in personal model gross sales. Excluding the influence of the Lakeville acquisition, gross sales quantity elevated 1.8% within the client distribution channel primarily as a consequence of a 1.5% enhance in personal model gross sales quantity. The gross sales quantity elevated for our personal manufacturers and client distribution channel was primarily pushed by new peanut butter distribution and elevated quantity of combined nuts at a mass merchandising retailer as a consequence of retail value changes which have been partially offset by decreased client demand for almonds on the similar retailer. Distribution of snack and path combine at new grocery retailer retailer and elevated distribution of snack and path combine at present grocery retailer retailer was tempered by decrease client demand for snack and path combine merchandise at one other mass merchandising retailer. The 4.3% enhance in gross sales quantity for our branded merchandise, which incorporates Fisher recipe nuts, Fisher snack nuts, Orchard Valley Harvest and Southern Fashion Nuts in client distribution channel was primarily attributable to a 21.8% enhance within the gross sales quantity of Orchard Valley Harvest as a consequence of enhanced promotional exercise at grocery retailer retailer and new rotational distribution at a membership retailer buyer. Gross sales quantity decreased 5% within the business substances channel, primarily as a consequence of lowered distribution brought on by aggressive pricing pressures at a number of prospects and non-recurring peanut butter gross sales at a foodservice distributor that occurred within the fourth quarter of fiscal 2023. Excluding the influence of the Lakeville Acquisition, gross sales quantity decreased 6.3% within the business substances distribution channel. Gross sales quantity elevated 16.9% within the contract manufacturing distribution channel, as a consequence of elevated granola quantity processed in our Lakeville facility for a significant buyer on this channel. Excluding the influence of the Lakeville acquisition, gross sales quantity decreased 20.7% within the contract manufacturing distribution channel as a consequence of lowered peanut distribution by a significant buyer brought on by smooth client demand. Moreover, the prior yr comparable quarter was positively impacted by a brand new product launch at one other buyer, which didn’t reoccur within the present quarter. Gross revenue for a fourth quarter of present yr — present yr decreased $4.7 million or 8.6% to $50 million. Excluding the $3.3 million in gross revenue associated to Lakeville acquisition, gross revenue decreased by roughly $8 million as a consequence of decreased promoting costs, lowered gross sales quantity and product combine manufacturing inefficiencies. Gross revenue margin decreased to 18.5% of web gross sales within the present fourth quarter in comparison with 23.4% within the fourth quarter of fiscal 2023, primarily as a consequence of greater web gross sales base from the Lakeville acquisition. Excluding the Lakeville acquisition, gross revenue margin decreased to twenty.7% as a consequence of causes beforehand talked about. Complete working bills within the quarterly comparability elevated $2.2 million, of which $1.9 million have been immediately associated to the Lakeville acquisition. Excluding the Lakeville acquisition, whole working bills elevated by $300,000, primarily as a consequence of a rise in incentive and fairness compensation, which was partially offset by a lower in promoting bills. Moreover, the prior comparable quarter was negatively impacted by a one-time impairment of a minority funding, which didn’t reoccur within the present quarter. Complete working bills as proportion of web gross sales decreased to 13.1% from 14.2% within the prior yr fourth quarter as a consequence of a better web gross sales base ensuing from Lakeville acquisition. Excluding the Lakeville acquisition, whole working bills as a proportion of web gross sales elevated to 14.9% from 14.2% because of the causes beforehand talked about and a decrease web gross sales base. Curiosity expense elevated to $500,000 within the fourth quarter of fiscal 2024 from $300,000 in final yr’s quarter. Internet revenue was $10 million or $0.86 per share diluted for the fourth quarter of fiscal 2024 in comparison with $14.7 million or $1.26 per diluted share. Now check out stock. The full worth of inventories readily available on the finish of the present fiscal yr elevated by $23.6 million or 13.7% in comparison with whole worth of inventories on the finish of fiscal 2023. The rise in whole worth of inventories was primarily as a consequence of $21.8 million of further stock related to the Lakeville acquisition. Excluding the Lakeville Acquisition, the entire worth — the worth of whole inventories readily available elevated $1.8 million or 1.1% year-over-year as a consequence of greater portions of inshell pecans and walnuts and better commodity acquisition prices for walnuts. This was offset by decrease portions of completed items and pecan meats and decrease portions and commodity acquisition prices for peanuts and cashews. The weighted common value per pound of uncooked nut and dried fruit enter inventory readily available, excluding the influence of the Lakeville acquisition decreased 9.2% year-over-year, primarily as a consequence of greater portions of inshell pecans and walnuts readily available. Shifting on to year-to-date outcomes. Fiscal 2024 web gross sales elevated 6.7% to $1.07 billion in comparison with fiscal 2023 web gross sales of $999.7 million, primarily as a consequence of Lakeville Acquisition. Excluding the influence of the Lakeville acquisition, web gross sales decreased 5.3% to $946.9 million, primarily attributable to a 3.3% decline in gross sales quantity and a couple of% lower within the weighted common promoting value per pound. Gross sales quantity elevated 12.3%, primarily as a consequence of Lakeville acquisition. Excluding the influence of Lakeville acquisition, gross sales quantity decreased 3.3% as a consequence of gross sales quantity decreases in all three distribution channels. Gross revenue for present fiscal yr elevated 1.2% to $214.1 million and gross revenue margin decreased from 21.2% to twenty.1% of web gross sales, primarily as a consequence of Lakeville acquisition, which was partially offset by decrease commodity acquisition value for all main tree nuts. Complete working bills for fiscal 2024 elevated $7.5 million to $129 million, primarily as a consequence of will increase in incentive compensation, incremental direct working bills related to the Lakeville acquisition, elevated promoting expense and charitable meals donations. These will increase have been partially offset by the one-time discount buy positive factors from the Lakeville acquisition and a lower in freight expense. Internet revenue for fiscal 2024 was $60.2 million, or $5.15 per diluted share, in comparison with $62.9 million, or $5.40 per diluted share. I’ll now flip the decision again over to Jeffrey to supply further feedback on our efficiency for the present quarter and monetary yr.
Jeffrey Sanfilippo: Thanks, Frank. Monetary updates. Now let’s shift to consumption exercise and class updates. I’ll share some class and model outcomes with you for the quarter. As at all times, the market data I will be referring to is Circana reported knowledge and for as we speak it’s for the interval ending June 16, 2024. After I discuss with This autumn, I am referring to 13 weeks of the quarter ending June 16, 2024. References to modifications in quantity or value versus the corresponding interval one yr in the past. We have a look at the class of Circana’s whole US definition, which incorporates meals, drug, mass, Walmart (NYSE:), navy and different shops, except in any other case specified. Once we focus on pricing, we’re referring to the typical value per pound. Breakouts of the recipe, snack and produce nut sub-categories are based mostly on our customized definitions developed at the side of Circana. The snack bar class is the syndicated view as outlined by Circana. The time period velocity refers back to the gross sales per level of distribution. Within the final quarter, we began to see stabilization within the broader snack class. Snack isle as outlined by Circana declined 0.8 factors in kilos and 0.3 factors in {dollars}. That is an enchancment versus the traits we have been seeing in Q3. The full nut and path combine class was down 2% in {dollars} and down 1% in pound quantity in This autumn. That is higher efficiency than we noticed final quarter. Nut and path combine costs have moderated and value per pound declined 1% versus the prior yr. We’re nonetheless seeing shoppers commerce all the way down to inexpensive snacks, bar sizes and nut sorts and deal search as broader meals and important costs stays elevated. Now we’ll cowl every subcategory in additional depth, beginning with recipe nuts. The recipe nut sub class was down 5% in {dollars} and 4% in pound gross sales. This can be a decline in efficiency versus what we noticed in Q3. Pricing is secure with each walnuts and pecans, the majority of this subcategory being flat to barely down on a value per pound foundation. Our Fisher model declined in This autumn, pushed primarily by velocity efficiency within the grocery channel. Fisher declined 11% in {dollars} and 9% in kilos, on par with the efficiency we noticed in Q3. The model was flat within the mass channel. Fisher continues to be the branded recipe nut chief, and we’re actively engaged on methods to have interaction shoppers with the proper value pack structure and promotions as we plan for this vacation season. Now let me flip to the snack subcategory. In This autumn, the snack class was down 3% in greenback gross sales and down 2% in pound gross sales. That is an enchancment versus the efficiency we noticed in Q3. Pricing continues to stabilize and value is flat versus a yr in the past. Fisher snack carried out principally in a subcategory on 29% in {dollars} and 33% in kilos. This continues to be pushed by vital distribution losses. We’re actively engaged on new promotional plans and new merchandise that give the shoppers new thrilling merchandise with the worth they’re in search of. Non-public label snack nuts are performing according to the subcategory, down 4% in {dollars} and down 1% in kilos. The path and snack combine subcategory was down 2% in {dollars} and down 2% in kilos in This autumn, an enchancment versus final quarter. Costs of path mixes have been flat versus a yr in the past. Our Southern model nut model grew 2% in {dollars} and 6% in kilos, pushed by robust velocity efficiency in mass and membership. Non-public manufacturers, the share chief in path combine carried out barely worse than the subcategory, down 3% in {dollars} and kilos, pushed by poor efficiency within the mass channel. Our final subcategory, produce nuts, declined 1% in {dollars} and grew 1% in pound quantity in This autumn, higher than the efficiency we noticed in Q3. Our produce nut model, Orchard Valley Harvest, carried out higher than the subcategory, up 10% in greenback gross sales and 16% in pound gross sales, pushed by velocity and distribution positive factors within the grocery channel. We’re coming into yr two of our relaunch and are excited to introduce new merchandise and pack sizes to proceed momentum on this model. Now we’ll change to the snack bar class. In This autumn, the snack bar class declined 6% in kilos and 4% in {dollars}. We’re persevering with to see the impact of the entire recall of the key branded snack bar participant earlier this yr. Snack bar pricing elevated by 2% in This autumn. Non-public label debtors continued to develop 14% in {dollars} and 12% in kilos. Non-public label bars proceed to develop in shops, choosing up 12% extra in TDP distribution, whereas costs rose 2%. We proceed to see optimistic momentum in personal label on this class, with greenback share within the quarter, up 1.2 factors versus final yr. In closing, we see nice alternatives to construct our bar enterprise and enter new snack bar section with revolutionary merchandise. Our Fisher recipe portfolio, the primary model within the recipe class is nicely positioned for a profitable vacation season arising in Q2. We do proceed to face challenges sooner or later on a macro stage. which incorporates declining consumption traits within the snack class, additionally greater prices for chocolate and cashew nuts as a consequence of provide and demand. Nevertheless, our gross sales and advertising, R&D and procurement groups are working with a way of urgency to search out options to beat these headwinds. By way of fiscal ’23, the corporate achieved 5 consecutive years of file earnings. Whereas we didn’t proceed that efficiency pattern this yr, our groups achieved a lot in fiscal 2024 that may place JBSS for robust progress and profitability sooner or later. These outcomes show the underlying energy and resilience of our firm. These achievements are additionally a testomony to the fortitude of our enterprise mannequin, the dedication of our folks and the mutual belief and depth of our buyer and provider partnerships. We’re executing our progress methods, implementing steady enchancment initiatives all through the corporate to optimize our value construction. And we proceed to spend money on our manufacturers and processes to higher serve our prospects and shoppers and create worth for our shareholders. We recognize your participation within the name, and thanks to your curiosity in our firm. I’ll now open the decision to questions.
Operator:
Jeffrey Sanfilippo: We might wish to thanks for collaborating in our earnings name as we speak. Have a terrific day. Thanks.
Operator: This concludes the participation in as we speak’s convention. It’s possible you’ll now disconnect.
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