PENNSAUKEN, NJ — As a company that generates approximately two-thirds of its revenues from venues and locations that have shut down or sharply curtailed their foodservice operations, J&J Snack Foods suffered through a difficult second quarter.
Net income at J&J Snack Foods in the second quarter ended March 28 totaled $7.31 million, equal to 39¢ per share on the common stock, down 64% from $20.35 million, or $1.08 per share, in the same period a year ago. Net sales eased 1.6% to $272.04 million from $276.3 million.
“We have good management in place, strong brands and a broad base of highly respected customers,” Gerald B. Shreiber, president and chief executive officer, said during an April 28 conference call with analysts. “We continue to monitor and adjust our costs and expenses as we evaluate our business on a daily, weekly and monthly basis. We are monitoring consumer behavior, customer shift and industry needs to adopt our product and marketing mix for the post-pandemic landscape.
“In what is the true J&J Snack Foods entrepreneurial spirit, we are ready to fight our way back to sales growth and business performance when customers begin to reopen this summer. Keep in mind that all of our leisure and theme parks and sports venues are either shut down or haven’t begun the 2020 seasons yet.
“We are being careful not to reduce our costs so much that we won’t be able to service our customers when they return, making sure that we have the proper staffing and resources in place when business opens up again. And at the same (time), we are working around the clock, updating preventative measures to keep our employees safe. We have always been a company that has been cautious in the way we spend and use our cash.”
Food service operating income at J&J Snack Foods plummeted 59% in the second quarter to $7.95 million from $19.18 million. Sales decreased 2.2% to $171.33 million from $175.07 million. Within the food service division, sales of bakery products were $89.41 million, up 5.9% from the same quarter a year ago, while sales of churros eased 6.5% to $14.75 million, and sales of soft pretzels fell 8.4% to $45.66 million.
In the retail supermarket segment in the second quarter, operating income was $4.34 million, up 43% from $3.04 million in the previous year’s second quarter. Sales increased nearly 10% to $37.57 million from $34.17 million. Within the retail supermarket segment, sales of soft pretzels rose 14% to $12.33 million. Sales of frozen juices and ices increased 8% to $15.86 million, sales of biscuits rose 4.3% to $6.63 million, and sales of handheld items climbed 26% to $3.12 million.
In the frozen beverages segment, J&J Snack sustained an operating loss of $1.31 million, which compared with operating income of $2.55 million in the same period a year ago. Sales decreased 6% to $63.14 million.
Companywide, net earnings for the six-month period ended March 28 were $24.37 million, or $1.29 per share, down 36% from $37.88 million, or $2.02 per share, in the same time of the previous year. Six-month net sales increased 1.3% to $554.94 million from $547.91 million.