Soft pretzels, J&J Snack Foods
J&J Snack Foods' soft pretzel sales to the food service market increased 1%.

PENNSAUKEN, N.J. — Net income at J&J Snack Foods Corp. in the year ended Sept. 26 increased 8% to $75,975,000, equal to $4.07 per share on the common stock, up from $70,183,000, or $3.76 per share, in fiscal 2015. Net sales also increased, rising 1.7% to $992,781,000 from $976,256,000.

Operating income in the company’s Retail Supermarket business fell 13% to $9,618,000 from $11,020,000, while sales in the division declined 5% to $117,589,000 from $123,377,000.

“Soft pretzel sales to retail supermarkets were $33,279,000 compared to $35,727,000 in 2015, a decrease of 7%,” J&J Snack Foods noted in a Nov. 3 filing with the Securities and Exchange Commission. “About 1/2 of the pretzel sales decline was due to the discontinuance of SuperPretzel Bavarian Soft Pretzel bread, which was introduced in 2015. Sales of frozen juices and ices decreased $3,250,000, or 5%, to $68,924,000. Increased trade spending to introduce Whole Fruit Organic juice tubes and new Philly Swirl products and general declines in sales of our existing Philly Swirl products accounted for all of the sales decline in frozen juices and ices. Philly Swirl sales were down primarily because of lower sales to a customer in Canada due to the stronger U.S. dollar, lower sales to one warehouse club store that carried fewer s.k.u.s (stock-keeping units) this year and decreased sales to one retail supermarket customer of a product that is being discontinued.

Philly Swirl products, J&J Snack Foods
Philly Swirl sales were down primarily because of lower sales to a customer in Canada.

“… Handheld sales to retail supermarket customers decreased 19% to $15,347,000 for the year. Roughly 37% of the handhelds sales decline in the year resulted from increased trade spending to introduce Pillsbury mini dessert pies. The balance of the sales decline was spread over our customer base. Sales of Oreo churros, introduced this year, were approximately $4 million for the year, with about 1/2 of the sales coming in the fourth quarter.”

J&J Snack fared better in its Food Service segment, where operating income during fiscal 2016 increased to $76,539,000 from $75,286,000.

Funnel cake, J&J Snack Foods
Operating income benefited from the company's funnel cake products.

“Operating income for the year benefited from lower marketing expenses, lower ingredient costs, significantly increased volume of our handhelds and funnel cake products, pricing and more favorable product mix and was hurt by higher group health insurance costs and lower volume of our frozen juices and ices and bakery products,” the company said.

Food Service segment sales rose to $621,529,000 in fiscal 2016 from $616,635,000 a year ago.

“Soft pretzel sales to the food service market increased 1% to $170,155,000 for the year with sales increases and decreases throughout our customer base,” J&J Snack Foods said. “Soft pretzel sales to restaurant chains were about the same this year and last year.”

Oreo Churros, J&J Snack Foods
 Sales of Oreo churros, introduced this year, were approximately $4 million for the year.

J&J Snack Foods said frozen juice bar and ices sales decreased $2,656,000, or 5%, to $51,798,000 for the year due primarily to lower sales to two customers. Meanwhile, churro sales to food service customers were up 1% to $57,318,000 for the year with sales increases and decreases throughout the company’s customer base.

Sales of bakery products decreased $6,617,000, or 2%, for the year with sales to one customer down $7 million as the customer added a secondary supplier, J&J Snack Foods said. Handheld sales to food service customers increased 26% to $27,427,000 in 2016 with sales increases to one customer accounting for about 80% of the increase. Sales of funnel cake increased $7,000,000, or 57%, to $19,179,000 due primarily to increased sales to school food service and $4 million of sales to a new restaurant chain customer.