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SJ

SANFILIPPO JOHN B & SON INC (JBSS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 net sales rose 15.1% year over year to $269.6M, with gross margin at 18.5% and diluted EPS at $0.86; the quarter was boosted by ~$44.2M of snack bar sales from the Lakeville acquisition but faced margin compression from pricing and mix inefficiencies .
  • Full-year FY2024 surpassed $1.07B in net sales for the first time, with bar revenues of ~$131.0M (including $120.0M from Lakeville) and acquisition dilution far better than initial expectations ($0.17 vs $0.80–$1.00) .
  • Management raised the regular annual dividend to $0.85 and declared a $1.25 special dividend, payable Sept 11, 2024, highlighting capital return amid strategic investments .
  • Near-term catalysts: accelerating private label bar momentum, operational optimization at Lakeville, and expanded capacity via a newly leased 400,000 sq ft warehouse; counterweights include competitive pricing pressure in core nut categories and higher chocolate/cashew costs .

What Went Well and What Went Wrong

What Went Well

  • Crossed $1B in annual net sales for the first time; bar portfolio delivered ~$131.0M in FY2024, with Lakeville contributing ~$120.0M and dilution per share only ~$0.17 vs initial $0.80–$1.00 expectation: “significantly better than our original expected per share dilution” .
  • Consumer channel volume grew +31.0% (+1.8% ex-Lakeville), with private brand volume +35.4%; Orchard Valley Harvest volume +21.8% in Q4 on enhanced promotion and club rotation .
  • Capacity expansion: newly leased 400,000 sq ft Huntley warehouse to free ~250,000 sq ft for bars and nut/trail mix packaging expansion .

What Went Wrong

  • Gross profit fell $4.7M to $50.0M and margin declined to 18.5% (20.7% ex-Lakeville) due to lower selling prices, reduced volume, and product mix inefficiencies; diluted EPS decreased 31.7% YoY to $0.86 .
  • Competitive pricing pressures drove lower weighted average selling price and volume declines in peanuts, almonds, pecans, and walnuts (partly offset by cashews and snack/trail mix) .
  • Branded snack nuts underperformed the category with significant distribution losses; management cited macro headwinds and elevated costs for chocolate and cashews .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Millions)$291.2 $271.9 $269.6
Gross Profit ($USD Millions)$57.9 $49.2 $50.0
Gross Margin (%)19.9% 18.1% 18.5%
Diluted EPS ($)$1.64 $1.15 $0.86

Segment and channel volume (Q4):

Distribution/BrandVolume Change YoYEx-Lakeville
Consumer Channel+31.0% +1.8%
Private Brand+35.4% +1.5%
Branded (Fisher, OVH, SSN)+4.3% N/A
Commercial Ingredients-5.0% -6.3%
Contract Manufacturing+16.9% -20.7%

KPIs and operational metrics (Q4):

KPIValue
Sales Volume (lbs)91.6M
Lakeville Net Sales Contribution~$44.2M
Weighted Avg Selling Price Change-1.9% YoY
Inventory (ending value)$196.6M
Inventory YoY Change+$23.6M (+13.7%)
Weighted Avg Input Cost Change-9.2% YoY (ex-Lakeville)
Total OpEx as % Net Sales13.1% (14.9% ex-Lakeville)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Annual DividendFY2024 payout date Sept 11, 2024Increased by $0.05 vs prior year (implies $0.80) $0.85 per share Raised
Special DividendFY2024 payout date Sept 11, 2024N/A$1.25 per share New
Long-Range Revenue TargetMulti-yearN/AStrategic plan to become a $2B business Strategic ambition

Management did not provide formal quantitative guidance for revenue, margins, OpEx, or tax rate; focus remains on bar distribution expansion, operational efficiencies, and category recovery .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Private label snack bars momentumCategory down in volumes; private label bars +10.1% dollars, +2.1% pounds; Lakeville contributed $28.7M; integration optimization underway Private label bars +10.6% dollars, +6.8% pounds; Lakeville expected accretive in Q4 Category -6% pounds/-4% dollars; private label bars +14% dollars/+12% pounds; dollar share up +1.2 points Strengthening
Consumer demand in nut/trail mixCategory down; pricing near 5-year highs; branded Fisher snack declined due to distribution losses Category down but stabilizing; Fisher snack underperformed; trail mix prices flat Slight stabilization; total nut/trail down 2% dollars/1% pounds; continued trade-down behavior Stabilizing but soft
Lakeville optimization & dilutionEarly optimization; one-time costs; plan to realize efficiencies Expect accretive to operating income in Q4; dilution updated to $0.25–$0.50 Dilution ~ $0.17 for FY; at top end of sales range; optimization ahead of schedule Better than plan
Pricing/pack architectureEmphasis on price pack architecture to entice consumers back Testing price changes; initial success at a major retailer Focus on rebuilding nut and trail via price pack architecture and innovation Ongoing execution
Capacity expansionN/AN/ANew 400k sq ft warehouse leased; frees 250k sq ft production space Capacity up
Commodity cost headwindsPeanuts higher; mixed commodity trends Higher acquisition costs for peanuts/walnuts Higher costs for chocolate and cashews Mixed headwinds

Management Commentary

  • “We exceeded $1 billion in annual net sales for the first time… our snack and nutrition bar offering generated approximately $131.0 million… dilution per share… approximately $0.17 per share, significantly better than our original expected… $0.80 to $1.00” .
  • “Our fourth quarter results, although strong, were impacted by investments we made with our customers that we anticipate will deliver future benefits…” .
  • “We recently leased a new 400,000 square foot warehouse in Huntley, Illinois… free up about 250,000 square feet… to expand production in bars and nut and trail mix packaging” .
  • “Private label bars continued to grow 14% in dollars and 12% in pounds… dollar share… up 1.2 points versus last year” .

Q&A Highlights

  • We were unable to retrieve the Q4 2024 Q&A transcript due to a document processing error; highlights are therefore not available in this recap –.

Estimates Context

  • Wall Street consensus estimates (S&P Global) were unavailable due to access limits at the time of request; as a result, we cannot assess headline beats/misses versus consensus for Q4 2024. If you need this, we can re-run when access resets.

Key Takeaways for Investors

  • Mix shift to private label bars is accretive to scale but dilutive to gross margin; optimization and Lakeville efficiencies are tracking ahead of plan with FY dilution only ~$0.17 vs $0.80–$1.00 originally guided .
  • Core nut and trail categories show tentative stabilization, but competitive pricing continues to pressure selling prices and branded performance; pricing architecture and promotion are central to re-accelerating velocity .
  • Capacity expansion (Huntley warehouse) should unlock incremental throughput for bars and packaged nuts, supporting the long-range $2B revenue ambition .
  • Inventory is higher largely due to Lakeville, while input costs per pound have declined ex-Lakeville, providing some cost relief if pricing normalizes .
  • Capital returns remain robust with a $1.25 special dividend and higher regular dividend ($0.85), reinforcing cash discipline amid growth investments .
  • Near-term focus: drive consumer channel growth in private label bars, rebuild branded velocity (OVH momentum, Fisher recovery), and offset commodity cost headwinds (chocolate, cashews) via procurement and innovation .
  • Re-rating potential hinges on margin recovery in core nuts, continued bar growth, and execution of capacity optimization; absence of formal guidance increases reliance on trend data from subsequent quarters .