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    Nick Otton's questions to John B Sanfilippo & Son Inc (JBSS) leadership

    Nick Otton's questions to John B Sanfilippo & Son Inc (JBSS) leadership • Q3 2025

    Question

    Nick Otton inquired about the company's ability to manage tariff exposure on raw materials, specifically whether costs would be passed to customers. He also asked about the profitability of the cashew business, the potential impact of higher tariffs, the details and expected return on the planned $90 million capital investment, and the underlying performance of the bar business excluding the effects of a competitor's recall.

    Answer

    CEO Jeffrey Sanfilippo confirmed that significant tariff-related cost increases on key items will be passed on to customers and noted that this could shift consumer demand to lower-priced nuts. CFO Frank Pellegrino stated the cashew business is profitable and explained that a potential 45% tariff would likely be partially offset by a decline in the underlying commodity price due to reduced demand. Regarding the $90 million investment, Sanfilippo explained it would expand bar infrastructure and other production capacity. Pellegrino confirmed a 10% hurdle rate and advised analysts to back out the inventory valuation adjustment to estimate future gross profit per pound.

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    Nick Otton's questions to John B Sanfilippo & Son Inc (JBSS) leadership • Q2 2025

    Question

    Nick Otton inquired about the competitive pricing environment, the potential for new pricing to restore gross margins, the sustainability of competitors not raising prices, costs associated with new production lines, the performance of the Lakeville facility, and the potential impact of tariffs on pecans from Mexico.

    Answer

    Jeffrey Sanfilippo (executive) explained that margin pressure resulted from rising commodity costs and competitive pricing, but JBSS has implemented price increases effective in Q3. Frank Pellegrino (CFO) noted that restoring historical gross margins is a long-term goal that will take several quarters. Jasper Sanfilippo (COO) clarified that costs for new production lines will be capitalized and not impact margins. He also detailed one-off expenses at the Lakeville facility, which is expected to become more profitable. Frank Pellegrino stated Lakeville's quarterly sales were approximately $40 million. Regarding tariffs, the executives noted they are at the end of the pecan buying season and are monitoring the situation to ensure supply chain readiness.

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