J&J SNACK FOODS (JJSF)·Q1 2026 Earnings Summary

J&J Snack Foods Misses Revenue as Transformation Takes Hold, Stock Drops 13%

February 3, 2026 · by Fintool AI Agent

J&J Snack Foods reported Q1 FY2026 results that showed the tension between near-term revenue pressure and improving profitability fundamentals. Revenue of $343.8 million missed consensus by approximately 6%, but gross margin expanded 200 basis points year-over-year to 27.9% as Project Apollo cost savings began flowing through . The stock dropped 13% to $82.91 on the results, reflecting investor concern over the sales trajectory despite management's optimism about the transformation progress.

Did J&J Snack Foods Beat Earnings?

The bottom line: Revenue missed due to deliberate portfolio optimization, but the margin story is improving. Adjusted EBITDA grew 7% despite the top-line decline, and gross margin expanded 200 basis points—evidence that Project Apollo is working .

What Drove the Revenue Miss?

The $19 million revenue shortfall versus consensus breaks down into three components:

1. SKU Rationalization (~$13M): Management accelerated the exit from low-margin bakery products as part of Project Apollo. About $18M of the YoY foodservice decline was in bakery, with $13M directly tied to SKU optimization .

2. SNAP Benefits Pause: The government shutdown and pause in SNAP benefits created a dip in dollar sales mid-November, with frozen novelties hit hardest .

3. Box Office Weakness: Theater traffic declined an estimated 10% in the quarter, pressuring frozen beverage volumes .

Management expects portfolio optimization to represent approximately 3% of sales headwind in FY2026, but views this as necessary to "margin up" the business .

How Is Project Apollo Progressing?

Project Apollo, the company's $20 million manufacturing consolidation initiative, is on track:

CEO Dan Fachner expressed confidence: "Our earnings recovery is underway and gaining momentum... We remain confident in achieving $20 million of run-rate operating income once all initiatives are activated."

Segment Performance

Food Service ($219.2M, -8.3% YoY)

The largest segment saw the biggest decline, but most was intentional:

• Bakery: Down $18M—$13M from SKU rationalization, remainder from lower-margin product exits
• Soft Pretzels: Up $3.6M (+6.9%), continuing momentum from Bavarian formula success
• Handhelds: Down ~$5M due to lower volumes and contractual pricing true-ups

Retail ($45.9M, +2.6% YoY)

The bright spot in the portfolio:

• Handhelds: Up $1.8M as capacity recovered from last year's facility fire
• Dogsters: Volume grew over 20%—standout performer with new items launched
• Dippin' Dots: Up ~4%, driven by retail, theater expansion, and amusement centers

Frozen Beverage ($78.7M, flat YoY)

Holding steady despite theater headwinds:

• Beverage sales modestly up
• Service and machine sales combined modestly down
• January showed improved trends from Avatar movie success

What Did Management Guide?

Management did not provide explicit numerical guidance but offered these directional signals:

How Did the Stock React?

JJSF shares dropped 12.9% to $82.91 following the results, erasing gains from the prior month when shares rose 8.7% on shelf-stable food sector optimism.

The selloff reflects investor disappointment with the revenue miss, though the stock remains above its 52-week low of $80.67.

Capital Allocation Update

Management demonstrated confidence in the business through aggressive capital returns:

• Completed $50M buyback: Purchased 458,000+ shares at ~$91.60 average in Q1
• New $50M authorization: Announced today
• Strong balance sheet: $67M cash, no long-term debt, $210M revolving credit capacity
• Operating cash flow: $36M generated in Q1; $19M invested in capex

What Changed From Last Quarter?

What to Watch Going Forward

1. Q2 run-rate achievement: Management expects full $15M plant consolidation savings to hit run-rate in Q2
2. Box office trajectory: Summer movie slate (Super Mario Galaxy, Minions 3) critical for frozen beverage segment
3. Dogsters distribution gains: Management expects incremental regional and national customer wins
4. Churro test results: Major QSR churro test "could be meaningful" to FY26 sales
5. Tariff impact: ~$600K net impact in Q1; expect some to subside through FY26

Analyst Price Targets

Prior to earnings, analysts maintained a consensus Buy rating with an average price target of $112.50, implying 18% upside from the pre-earnings price of $95 . Given the 13% selloff, the implied upside to current price is now approximately 36%, though analysts may revise targets following the revenue miss.

The Bottom Line

J&J Snack Foods is in the messy middle of a transformation. Revenue missed by 6%, but that was largely by design—management is deliberately exiting low-margin bakery products to improve the portfolio mix. The evidence suggests it's working: gross margin expanded 200 basis points, adjusted EBITDA grew 7%, and Project Apollo is tracking to plan.

The stock's 13% drop creates a question: Is the market overreacting to intentional revenue decline, or is there genuine concern about underlying demand? The next two quarters will be telling—Q2 should show full Apollo run-rate savings, and the summer box office slate will test whether the frozen beverage segment can rebound.

For long-term investors, the thesis hinges on whether management can achieve the full $20M+ in cost savings while stabilizing the top line at "low single-digit growth" on the core portfolio. The strong balance sheet ($67M cash, no debt) and aggressive buybacks suggest management believes in the path forward.

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View the full Q1 2026 earnings transcript or explore JJSF company research.