J&J Snack Foods’ third quarter results reflected the impact of a challenging demand environment and segment-specific headwinds, as sales declined year-over-year and GAAP earnings per share fell well below analyst expectations. Management attributed the drop in revenue largely to a sharp decline in frozen beverage volumes, particularly as the company lapped strong prior-year results tied to the Inside Out 2 movie. CEO Dan Fachner also pointed to growth in pretzel sales, driven by recent product innovation, as a partial offset to weak frozen novelty performance and ongoing capacity constraints in the handheld product line.
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J&J Snack Foods (JJSF) Q3 CY2025 Highlights:
- Revenue: $410.2 million vs analyst estimates of $409.8 million (3.9% year-on-year decline, in line)
- Adjusted EPS: $1.58 vs analyst estimates of $1.24 (27.8% beat)
- Adjusted EBITDA: $57.37 million vs analyst estimates of $50.87 million (14% margin, 12.8% beat)
- Operating Margin: 2.8%, down from 9.3% in the same quarter last year
- Market Capitalization: $1.77 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From J&J Snack Foods’s Q3 Earnings Call
- Jon Andersen (William Blair) asked about the impact of plant closures and portfolio optimization on sales and margins. CEO Dan Fachner explained these changes may reduce growth by about 1-1.5 percentage points but are expected to yield substantial efficiency gains.
- Scott Marks (Jefferies) questioned the timeline for efficiency gains from Project Apollo’s second phase. CFO Shawn Munsell clarified that most benefits from current closures would be realized by the second quarter, with further automation improvements targeted for 2027.
- Todd Brooks (The Benchmark Company) requested details on the most impactful commercial opportunities for 2026. Fachner identified the upcoming churro QSR program, expansion in the convenience channel, and the restoration of handheld capacity as major contributors.
- Todd Brooks (The Benchmark Company) also inquired about long-term gross margin potential post-Project Apollo. Munsell stated the company aims to exceed a 30% gross margin, with further improvements tied to ongoing automation and top-line growth.
- Jon Andersen (William Blair) probed the company’s approach to capital allocation and share repurchases. Munsell and Fachner indicated an intention to accelerate buybacks, while remaining cautious about potential M&A activity.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) the pace and effectiveness of cost savings from Project Apollo, (2) the stabilization and recovery of frozen novelty and handheld product sales as category trends and capacity improve, and (3) the success of new product rollouts and partnerships—particularly the QSR churro launch and Dippin’ Dots expansion. Execution in these areas will be key to offsetting ongoing consumer caution and restoring margin performance.
J&J Snack Foods currently trades at $91.24, up from $83.09 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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