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5 Takeaways From J&J Snack Foods' Q1 FY 2015 Earnings

Jan. 28, 2015 10:22 AM ETJ&J Snack Foods Corp. (JJSF)
William Bias profile picture
William Bias


  • Increased demand for bakery products, pretzels and machines served as catalysts for revenue increases.
  • J&J Snack Foods’ balance sheet remains strong and debt free.
  • J&J Snack Foods’ dividend is very sustainable.

On Jan. 26, snack and food manufacturer J&J Snack Foods (NASDAQ: NASDAQ:JJSF) came out with its Q1 FY 2015 earnings announcement. The company didn't do so well fundamentally in my opinion. However, it's just one quarter. J&J Snack Foods sells many well-known products such as Icee, Slush Puppie, Luigi, Superpretzel and The Funnel Cake Factory. I doubt it's going anywhere anytime soon. Let's take a look and see what is going on with this company.

Revenue increased

In the most recent quarter J&J Snack Foods saw its revenue increase 4.5% year-over-year. The acquisition of Philly Swirl contributed 1% to the overall sales gain. The organic portion of the revenue came from increased demand for its bakery products within the foodservice segment and increased pretzel demand within all food segments. Also, increased demand for beverages, machines and the need to repair them within the frozen beverage segment contributed to the overall gain in revenue. Customers demonstrated a desire for these products. A long-term shareholder would want to own shares in a company that sells products that are in demand.

Net income decreased

J&J Snack Foods saw its net income decrease 9.4% as growth in operating expenses outpaced the growth in revenue. Some of these expenses are temporary in nature. The company closed down a manufacturing facility in California. This sounds like a one-time event. Incremental expenses stemming from the Philly Swirl operation also contributed to increases in expenses. I'm sure the company will crack down on operating costs. The company also incurred advertising expenses pertaining to the new Superpretzel Bavarian. If demand takes off for this product then the company investment in advertising will pay off.

Free cash flow declined

J&J Snack Foods also saw its free cash flow decline 35% year-over-year. Unfavorable changes in assets and liabilities, especially inventory, accounts payable and accrued liabilities, put

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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