J & J Snack Foods (JJSF) investor relations material

Executive summary

• Adjusted EBITDA increased 7% to $27 million on $343.8 million in Q1 2026 sales, despite a 5.2% net sales decline due to portfolio and bakery business optimization.

• Gross margin expanded 200 basis points to 27.9%, driven by transformation initiatives and favorable product mix.

• Project Apollo delivered $3 million in net savings and is on track for $20 million in annualized savings.

• Focus remains on higher margin opportunities, operational excellence, and innovation, with strong performance in pretzels and Dogsters frozen novelties.

• Announced a new $50 million share repurchase authorization after completing $42 million in buybacks during the quarter.

Financial highlights

• Adjusted EBITDA rose 7% year-over-year to $27 million; adjusted operating income was $8 million, nearly flat with last year.

• Net sales declined 5.2% to $343.8 million, mainly due to bakery business SKU optimization and lower-margin product exits.

• Gross profit increased to $96 million, with gross margin at 27.9% from 25.9% year-over-year.

• Adjusted EPS was $0.33, unchanged from last year; reported EPS was $0.05, impacted by one-time charges.

• Operating cash flow was $36 million; capital expenditures totaled $19 million.

Outlook and guidance

• Portfolio optimization expected to reduce sales by 3% for fiscal 2026.

• Anticipate low single-digit growth for the full year, excluding SKU rationalization.

• Project Apollo expected to deliver $20 million in annual run-rate operating income, with full plant consolidation benefits in Q2 and remaining savings ramping up by Q4.

• Commodity pricing expected to be more favorable in 2026, supporting further gross margin improvement.

• Several new product launches, including Dippin' Dots for retail and better-for-you pretzel and frozen novelties, are expected in the second quarter.