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Category: Stock Market and J&J Snack Foods
Date: 10 November 2019 Stock Price: $180.93 We take a look at the 4th quarter earnings report of their 2019 fiscal year of J&J Snack foods a supplier of branded snack foods and beverages to foodservice and retail supermarket outlets.
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About J&J Snack Foods
J&J Snack Foods Corp. (NASDAQ: JJSF) is a leader and innovator in the snack food industry, providing innovative, niche and affordable branded snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, the #1 soft pretzel brand in the world, as well as internationally known ICEE and SLUSH PUPPIE frozen beverages, LUIGI’S Real Italian Ice, MINUTE MAID* frozen ices, WHOLE FRUIT sorbet and frozen fruit bars, SOUR PATCH KIDS** Flavored Ice Pops, Tio Pepe’s & CALIFORNIA CHURROS, and THE FUNNEL CAKE FACTORY funnel cakes and several bakery brands within DADDY RAY’S, COUNTRY HOME BAKERS and HILL & VALLEY. With nearly twenty manufacturing facilities, and more than $1 billion in annual revenue, J&J Snack Foods Corp. has continued to see steady growth as a company, reaching record sales for 48 consecutive years. The company consistently seeks out opportunities to expand its unique niche market product offering while bringing smiles to families worldwide
Financial overview of J&J Snack Foods' 4th quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $311.872 million (up from $300.715 million for the same quarter of the previous year)
- Net sales increased by 3.7% over the last 12 months
- Cost of goods sold: $218.931 million (up from $209.461 million for the same quarter of the previous year)
- Cost of goods sold increased by 4.5% over the last 12 months
- Net income: $26.067 million (up from $23.385 million for the same quarter of the previous year)
- Diluted earnings per common share $1.36 (up from $1.24 for the same quarter of the previous year)
- PE ratio of J&J Snack Foods: 33.9
- Diluted number of shares outstanding: 19.101 million (up from 18.867 million for the same quarter of the previous year)
- Cash and cash equivalents $192.395 million
- Cash and cash equivalents per share: $10.07
- Cash and cash equivalents makes up 5.6% of J&J Snack Foods' current market capital
- Cash and cash equivalents makes up 18.8% of J&J Snack Foods' total assets
- Accounts receivable, net: $140.938million
- Accounts receivable makes up 13.8% of J&J Snack Foods' total assets
- Total shareholders’ equity in J&J Snack Foods: $833.751 million
- Total shareholders equity per share: $46.27
- J&J Snack Foods is trading at 3.91 times its stockholders equity which is within the expected range of between 2 and 4 time that most firms tend to trade at.
- Cash generated from operations (for fiscal year): $147.499 million
- Cash generated from operations per share (for full fiscal year) : $7.72
- Cash generated from operations per share (for full fiscal year) : $7.72
J&J Snack Foods' management commentary on their 4th quarter 2019 earnings report
PENNSAUKEN, N.J., Nov. 07, 2019 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) today announced sales and earnings for its fourth quarter and year ended September 28, 2019.
Gerald B. Shreiber, J & J’s President and Chief Executive Officer, commented, “We are pleased that all of our business segments had increased operating income for the year. We will continue to work diligently toward improving revenues, margins and operating income going forward.”
Gerald B. Shreiber, J & J’s President and Chief Executive Officer, commented, “We are pleased that all of our business segments had increased operating income for the year. We will continue to work diligently toward improving revenues, margins and operating income going forward.”
FOOD SERVICE
Sales to food service customers increased $15,659,000, or 2 percent, to $761,603,000 in fiscal 2019. Soft pretzel sales to the food service market increased about 1/3 of 1 percent to $209,227,000 for the year with higher sales to convenience store chains offset by lower sales to restaurant chains and with sales increases and decreases throughout our customer base. Our line of BRAUHAUS pretzels contributed to the increased sales. Frozen juice bar and ices sales increased $1,308,000, or 3%, to $43,672,000 for the year due primarily to higher sales to warehouse club stores. Churro sales to food service customers were up 7% to $65,976,000 for the year with sales increases and decreases across our customer base but with particularly strong sales to warehouse club stores. Sales of bakery products increased $13,245,000, or 4%, to $384,636,000 for the year with increased sales to one customer accounting for all of the increase. Handheld sales to food service customers were down 19% to $31,685,000 in 2019 with sales decreases to three customers accounting for all of the decrease. Sales of funnel cake increased $3,223,000, or 15% to $24,793,000 due primarily to increased sales to a quick service restaurant under a limited time offer in our second quarter. Overall food service sales to restaurant chains were down about 2% for the year. Sales of new products in the first twelve months since their introduction were approximately $13.5 million for the year. Price increases accounted for approximately $15 million of sales for the year and net volume including new product sales were essentially flat. Operating income in our Food Service segment increased from $74,056,000 in 2018 to $78,130,000 in 2019 resulting from benefits of improved operations at several of our manufacturing facilities and increased pricing.
RETAIL SUPERMARKETS
Sales of products to retail supermarkets decreased $1,663,000 or 1% to $119,276,000 in fiscal year 2019. Soft pretzel sales to retail supermarkets were $36,264,000 compared to $36,438,000 in 2018. Strong pretzel sales increases from sales of AUNTIE ANNE’S products were offset by lower sales of our SUPER PRETZEL products. Sales of frozen juices and ices decreased $684,000 or 1% to $73,751,000 as we lost some volume and placements due to price increases. Coupon redemption costs, a reduction of sales, decreased 19% to $3,596,000 for the year. Handheld sales to retail supermarket customers decreased 12% to $10,902,000 for the year as sales of this product line in retail supermarkets continues its long-term decline. Sales of new products in the first twelve months since their introduction were approximately $1 million in fiscal year 2019. Price increases provided about $4 million of sales for the year and net volume decreased about $5.5 million for the year. Operating income in our Retail Supermarkets segment increased from $8,304,000 to $8,876,000 for the year. The primary contribution to the higher operating income this year was increased pricing.
FROZEN BEVERAGES
Frozen beverage and related product sales increased 13% to $305,608,000 in fiscal 2019. Beverage sales alone increased 7% or $10,883,000 for the year with increases and decreases throughout our customer base. About one third of the beverage sales increase was from increased flow through sales to one distributor which did not benefit operating income. Gallon sales were up 3% in our base ICEE business, with sales increases spread throughout our customer base. Service revenue increased 8% to $85,103,000 for the year with sales increases and decreases spread throughout our customer base. Machines revenue, primarily sales of machines, increased from $28,652,000 in 2018 to $45,811,000 in 2019. The estimated number of Company owned frozen beverage dispensers was 26,000 and 25,000 at September 28, 2019 and September 29, 2018, respectively. Operating income in our Frozen Beverage segment increased from $28,415,000 in 2018 to $29,950,000 in 2019 as a result of higher sales.
Sales to food service customers increased $15,659,000, or 2 percent, to $761,603,000 in fiscal 2019. Soft pretzel sales to the food service market increased about 1/3 of 1 percent to $209,227,000 for the year with higher sales to convenience store chains offset by lower sales to restaurant chains and with sales increases and decreases throughout our customer base. Our line of BRAUHAUS pretzels contributed to the increased sales. Frozen juice bar and ices sales increased $1,308,000, or 3%, to $43,672,000 for the year due primarily to higher sales to warehouse club stores. Churro sales to food service customers were up 7% to $65,976,000 for the year with sales increases and decreases across our customer base but with particularly strong sales to warehouse club stores. Sales of bakery products increased $13,245,000, or 4%, to $384,636,000 for the year with increased sales to one customer accounting for all of the increase. Handheld sales to food service customers were down 19% to $31,685,000 in 2019 with sales decreases to three customers accounting for all of the decrease. Sales of funnel cake increased $3,223,000, or 15% to $24,793,000 due primarily to increased sales to a quick service restaurant under a limited time offer in our second quarter. Overall food service sales to restaurant chains were down about 2% for the year. Sales of new products in the first twelve months since their introduction were approximately $13.5 million for the year. Price increases accounted for approximately $15 million of sales for the year and net volume including new product sales were essentially flat. Operating income in our Food Service segment increased from $74,056,000 in 2018 to $78,130,000 in 2019 resulting from benefits of improved operations at several of our manufacturing facilities and increased pricing.
RETAIL SUPERMARKETS
Sales of products to retail supermarkets decreased $1,663,000 or 1% to $119,276,000 in fiscal year 2019. Soft pretzel sales to retail supermarkets were $36,264,000 compared to $36,438,000 in 2018. Strong pretzel sales increases from sales of AUNTIE ANNE’S products were offset by lower sales of our SUPER PRETZEL products. Sales of frozen juices and ices decreased $684,000 or 1% to $73,751,000 as we lost some volume and placements due to price increases. Coupon redemption costs, a reduction of sales, decreased 19% to $3,596,000 for the year. Handheld sales to retail supermarket customers decreased 12% to $10,902,000 for the year as sales of this product line in retail supermarkets continues its long-term decline. Sales of new products in the first twelve months since their introduction were approximately $1 million in fiscal year 2019. Price increases provided about $4 million of sales for the year and net volume decreased about $5.5 million for the year. Operating income in our Retail Supermarkets segment increased from $8,304,000 to $8,876,000 for the year. The primary contribution to the higher operating income this year was increased pricing.
FROZEN BEVERAGES
Frozen beverage and related product sales increased 13% to $305,608,000 in fiscal 2019. Beverage sales alone increased 7% or $10,883,000 for the year with increases and decreases throughout our customer base. About one third of the beverage sales increase was from increased flow through sales to one distributor which did not benefit operating income. Gallon sales were up 3% in our base ICEE business, with sales increases spread throughout our customer base. Service revenue increased 8% to $85,103,000 for the year with sales increases and decreases spread throughout our customer base. Machines revenue, primarily sales of machines, increased from $28,652,000 in 2018 to $45,811,000 in 2019. The estimated number of Company owned frozen beverage dispensers was 26,000 and 25,000 at September 28, 2019 and September 29, 2018, respectively. Operating income in our Frozen Beverage segment increased from $28,415,000 in 2018 to $29,950,000 in 2019 as a result of higher sales.
J&J Snack Foods (NASDAQ: JJSF) stock price history
The image below, obtained from Google shows the stock price history of J&J Snack Foods over the last 5 years. And its been a pretty good time for J&J Snack Foods stockholders. 5 years ago the stock of J&J Snack Foods was trading at around $103 a stock and its currently trading at $188.93. That's a very strong return of 75.7% provided to J&J Snack Foods stockholders over the last 5 years.
The stock of J&J Snack Foods is trading at a lot closer to its 52 week high of $196.84 than it is to its 52 week low of $138.0 which to us is a clear indication that the short term sentiment and momentum of J&J Snack Foods is very positive at this point in time.
The stock of J&J Snack Foods is trading at a lot closer to its 52 week high of $196.84 than it is to its 52 week low of $138.0 which to us is a clear indication that the short term sentiment and momentum of J&J Snack Foods is very positive at this point in time.
Recent coverage of J&J Snack Foods
The extract below covers the latest regarding J&J Snack Foods as obtained from TheStreet.com
Pennsauken, NJ, Oct. 03, 2019 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) announced today that its wholly owned subsidiary, The ICEE Company, has acquired the assets of ICEE Distributors, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. The sale was effective on October 1, 2019. Dan Fachner, President of The ICEE Company, commented "We are excited to be able to sell the ICEE branded frozen beverage across the state of Louisiana. ICEE is our flagship brand and we look forward to adding this part of the country to our portfolio." About The ICEE Company Founded in 1967, The ICEE Company is the leader and innovator in the frozen beverage industry, offering the most comprehensive frozen beverage package and service network in the beverage and foodservice categories. The brand portfolio includes ICEE, SLUSH PUPPiE, ARCTIC BLAST , PARROT-ICE fruit smoothies, THELMA's frozen lemonade, Nitro cold brew frozen coffee dispensed out of TWISTED CHILL by ICEE machines, and frozen cocktails. The ICEE Company is also a major service provider to the foodservice category through ICEE Managed Service. The ICEE Company is a subsidiary of J&J Snack Foods Corp. (NASDAQ-JJSF), and operates Service Centers throughout the United States, Mexico, Canada. ICEE is distributed globally across Europe, China, Central America, the GCC and Australia
Pennsauken, NJ, Oct. 03, 2019 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) announced today that its wholly owned subsidiary, The ICEE Company, has acquired the assets of ICEE Distributors, based in Bossier City, Louisiana. ICEE Distributors does business in Arkansas, Louisiana and Texas with annual sales of approximately $13 million. The sale was effective on October 1, 2019. Dan Fachner, President of The ICEE Company, commented "We are excited to be able to sell the ICEE branded frozen beverage across the state of Louisiana. ICEE is our flagship brand and we look forward to adding this part of the country to our portfolio." About The ICEE Company Founded in 1967, The ICEE Company is the leader and innovator in the frozen beverage industry, offering the most comprehensive frozen beverage package and service network in the beverage and foodservice categories. The brand portfolio includes ICEE, SLUSH PUPPiE, ARCTIC BLAST , PARROT-ICE fruit smoothies, THELMA's frozen lemonade, Nitro cold brew frozen coffee dispensed out of TWISTED CHILL by ICEE machines, and frozen cocktails. The ICEE Company is also a major service provider to the foodservice category through ICEE Managed Service. The ICEE Company is a subsidiary of J&J Snack Foods Corp. (NASDAQ-JJSF), and operates Service Centers throughout the United States, Mexico, Canada. ICEE is distributed globally across Europe, China, Central America, the GCC and Australia
J&J Snack Foods (NASDAQ: JJSF) latest stock valuation
Based on J&J Snack Foods' latest earnings report what do we value the stock of J&J Snack Foods' at? Based on reported earnings and the fiscal guidance provided our valuation models provides a target (full value) price for J&J Snack Foods' at $147.00. We therefore believe the stock of J&J Snack Foods' is overvalued.
We usually recommend that long term fundamental or value investors enter a stock at least 10% below our target (full value) price which in this case is $147. We therefore believe a good entry point into J&J Snack Foods' stock is at $133 or below. We expect the stock of J&J Snack Foods to pull back strongly from its current levels to levels closer to our target (full value) price in coming weeks and months.
We therefore rate the stock of J&J Snack Foods as a sell
We usually recommend that long term fundamental or value investors enter a stock at least 10% below our target (full value) price which in this case is $147. We therefore believe a good entry point into J&J Snack Foods' stock is at $133 or below. We expect the stock of J&J Snack Foods to pull back strongly from its current levels to levels closer to our target (full value) price in coming weeks and months.
We therefore rate the stock of J&J Snack Foods as a sell
Next earnings release of J&J Snack Foods
It is expected that J&J Snack Foods' 1st quarter 2020 earnings report will be released towards the middle of February 2020