Executive Summary

Net sales rose 18.0% to $276.2M on 24.5% volume growth to 91.2M pounds, largely from the Lakeville snack bar acquisition; however, gross margin compressed to 16.9% and diluted EPS fell 33.8% to $1.00 as pricing pressure and higher nut costs weighed on profitability .
Management cited a one-time concession to a snack bar customer and Lakeville capacity constraints as primary profit headwinds, noting these constraints have been resolved and efficiencies are being implemented to restore margins .
Consumer channel volume was the strongest in eight quarters ex-Lakeville; Southern Style Nuts rebounded at club, OVH grew double-digits, and private label bars continued to ramp, reinforcing the bar-led diversification strategy .
No formal financial guidance was provided; management highlighted planned pricing actions to offset rising chocolate, cashew, almond and walnut costs, and operational initiatives including a new 446k sq ft Huntley, IL distribution center to support growth .
Wall Street consensus estimates from S&P Global were unavailable at query time; as such, beats/misses vs estimates cannot be determined (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

Broad-based volume growth: Sales volume +24.5% to 91.2M pounds; consumer channel volume +30.8% (+3.4% ex-Lakeville) with private brand +36.1% driven by new peanut butter/nutrition bar distribution and improved mixed nuts/snack/trail mix at a mass merchandiser .
Branded recovery pockets: Southern Style Nuts volume +5.4% on normalized club inventory; OVH shipments +14.3% in pounds across channels with new product launches planned for Q2 FY25 .
Strategic capacity and logistics: Lease of a 446,000 sq ft Huntley, IL distribution center; already shipping largest customers, enabling added bar and nut/trail mix packaging capacity .

Quote: “We remain optimistic that the strategic pricing actions we initiated last quarter will continue to drive positive momentum in our consumer distribution channel.” – CEO Jeffrey T. Sanfilippo .

What Went Wrong

Margin compression: Gross profit down 18.4% to $46.5M; gross margin down to 16.9% from 24.4% YoY due to competitive pricing, strategic price actions, higher commodity costs (peanuts/tree nuts), one-time concession, and Lakeville capacity-related manufacturing spend .
Profitability impact: Diluted EPS decreased 33.8% to $1.00, net income fell to $11.7M vs $17.6M YoY; interest expense rose to ~$0.5M on higher average debt levels .
Mixed channel dynamics ex-Lakeville: Contract manufacturing volume fell 19.8% ex-Lakeville on reduced peanut distribution and lack of prior-year club rotation; commercial ingredients down slightly ex-Lakeville .

Financial Results

Sequential Quarterly Comparison (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($USD Millions)	$271.884	$269.572	$276.196
Sales Volume (Million lbs)	92.0	91.6	91.2
Gross Profit ($USD Millions)	$49.177	$50.001	$46.544
Gross Margin (%)	18.1%	18.5%	16.9%
Income from Operations ($USD Millions)	$18.352	$14.657	$17.007
Net Income ($USD Millions)	$13.477	$10.013	$11.659
Diluted EPS ($)	$1.15	$0.86	$1.00

Year-over-Year Comparison

Metric	Q1 2024	Q1 2025
Net Sales ($USD Millions)	$234.105	$276.196
Gross Profit ($USD Millions)	$57.022	$46.544
Gross Margin (%)	24.4%	16.9%
Net Income ($USD Millions)	$17.588	$11.659
Diluted EPS ($)	$1.51	$1.00

Distribution Channel and Brand Volume Trends

Category	Q3 2024	Q4 2024	Q1 2025
Consumer Channel Volume	+33.1% (+0.3% ex-Lakeville)	+31.0% (+1.8% ex-Lakeville)	+30.8% (+3.4% ex-Lakeville)
Private Brand (Consumer)	+38.6%	+35.4%	+36.1%
Branded	-5.8%	+4.3%	+5.4%
Commercial Ingredients	-2.4% (−3.0% ex-Lakeville)	−5.0% (−6.3% ex-Lakeville)	+1.2% (−0.6% ex-Lakeville)
Contract Mfg/Packaging	−11.3%	+16.9% (−20.7% ex-Lakeville)	+13.3% (−19.8% ex-Lakeville)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY25/Q1 update	None provided	None provided	Maintained: No formal guidance
Gross Margin	FY25/Q1 update	None provided	No formal guidance; expects pricing actions to align with rising commodity costs (chocolate, cashews, almonds, walnuts)	N/A
OpEx	FY25/Q1 update	None provided	Focus on operational efficiencies; OpEx decreased YoY in Q1	N/A
Capabilities/Capacity	FY25/Q1	N/A	New Huntley DC leased; additional bar and packaging capacity	N/A
Dividends	FY25/Q1	N/A	No new dividend actions disclosed in Q1 PR; prior FY24 increase and special dividend noted in Aug-2024	N/A

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
AI/Technology Initiatives	Not discussed in PR/8-K	Not discussed in PR	Internal team formed; executing AI use cases in coming quarters	New, building
Pricing Alignment/Margins	Competitive pricing pressure; lower nut prices except walnuts	Lower selling prices; margin dilution from Lakeville net sales base	Strategic pricing actions ongoing; commodity cost increases (chocolate, cashews, almonds, walnuts)	Continued focus
Capacity/Supply Chain	Lakeville integration progress and efficiencies	Lakeville granola drove volume; operational efficiencies effort	Lakeville capacity constraints caused one-time concession; constraints resolved; new DC adds capacity	Near-term resolved; capacity expanding
Consumer Behavior/Channels	Cautious consumer; branded declines; private brand stabilized	Mixed consumer demand; club rotation benefits	Shift to value-focused retailers; club rotations; strong consumer channel growth ex-Lakeville	Improving volume; price-sensitive
Product Performance (Bars)	Lakeville bars incremental; accretive ahead of schedule	Bars drove contract volume; mixed price/mix	Private label bars up significantly; continued momentum	Structural growth driver

Management Commentary

“We remain optimistic that the strategic pricing actions we initiated last quarter will continue to drive positive momentum… However, the category may be challenged by increasing commodity costs and corresponding selling price increases in the next few quarters.” – CEO Jeffrey T. Sanfilippo .
“Our profitability in the quarter was impacted by a one-time concession to a snack bar customer due to capacity constraints at our Lakeville facility. We believe these capacity constraints have been resolved.” – CEO Jeffrey T. Sanfilippo .
“AI technology is already having an extraordinary impact… we have developed an internal team to assess how JBSS can use AI… Several use cases have been identified, and we will be executing projects in the coming fiscal quarters.” – CEO Jeffrey T. Sanfilippo .
“Gross profit decreased… due to lower selling prices… higher commodity acquisition costs… a one-time price concession… and increased manufacturing spending due to capacity constraints at our Lakeville facility.” – CFO Frank S. Pellegrino .

Q&A Highlights

Pricing and cost inflation: Management emphasized the need for price adjustments with customers to offset significant cost increases in chocolate, cashews, almonds, and rising walnut markets; conversations are ongoing to preserve quality and service levels .
Capacity and operations: Lakeville constraints that necessitated a one-time concession have been resolved; ongoing projects aim at cost savings and operational efficiencies across the organization, supported by the new Huntley distribution center .
Category trends and retail mix: Shift toward value-focused retailers and club channel rotations; branded Fisher snack/trail mix underperformed category due to distribution loss/non-repeating promotions, while Southern Style Nuts and OVH showed strength .

Estimates Context

S&P Global consensus estimates for revenue and EPS for Q1 FY25 and forward periods were unavailable at the time of query due to data access limits; therefore, we cannot assess beats/misses vs Wall Street consensus (S&P Global data unavailable).

Key Takeaways for Investors

Bar-led diversification continues to scale, driving volume and net sales; expect margins to normalize as Lakeville constraints are resolved and efficiency projects progress .
Near-term profitability hinges on pricing power versus commodity inflation; watch customer acceptance of price actions in chocolate, cashews, almonds and walnuts and any demand elasticity impacts .
Consumer channel momentum ex-Lakeville is encouraging amid value-channel shifts; branded recovery is uneven, but club and OVH show traction, supporting a mixed brand/private label strategy .
Operational capacity expansion (Huntley DC) should support throughput and logistics, enabling added bar and nut/trail mix packaging capacity and potentially lowering unit costs over time .
Inventory values and nut input costs are rising; monitor working capital and revolver utilization as commodity cost cycles progress .
With no formal guidance, focus on cadence of gross margin recovery and EPS trajectory across FY25, including seasonal Q2 holiday period and mix effects in bars/granola .
Structural drivers (private label bars, operational efficiencies, AI-enabled process improvements) underpin medium-term margin resiliency and potential re-rating if execution offsets input inflation .

Additional Data Reference (Prior Two Quarters)

Q4 FY2024: Net sales $269.6M; gross margin 18.5%; diluted EPS $0.86; consumer channel +31.0% (+1.8% ex-Lakeville); branded +4.3%; commercial −5.0%; contract +16.9% (−20.7% ex-Lakeville) .
Q3 FY2024: Net sales $271.9M; gross margin 18.1%; diluted EPS $1.15; consumer channel +33.1% (+0.3% ex-Lakeville); branded −5.8%; commercial −2.4% (−3.0% ex-Lakeville); contract −11.3% .

Conference call scheduling press release for Q1 FY25 confirms the call timing following the earnings release .

SANFILIPPO JOHN B & SON INC (JBSS)·Q1 2025 Earnings Summary