Foodservice

J&J Snack Foods swings to Q3 loss from COVID-19

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July 28, 2020

J&J Snack Foods Corp., a maker of pretzels, juice bars and baked goods, swung to a fiscal third quarter loss, as customer locations curtailed their foodservice operations during COVID-19.

The company lost $12.6 million, or 67 cents during the quarter ended June 27, compared to earnings of $30.9 million, or $1.63 per share, in the year-ago quarter. One factor driving down earnings this year was a $5.1 million cost from plant shutdown impairment.

Sales fell 34% to $214.6 million in the quarter from $326.7 million in the year-ago quarter, the company reported. Company officials reported gradual improvements as the nationwide lockdown began to lift and the economy opened up.

"Although we had an operating loss this quarter, we progressed nicely with each month improving from the prior month," Dan Fachner, company president, said in the press release. "Our retail division was strong as that end of the business continues to outperform the previous year. Much of the foodservice locations are slow to open but we continue to see improvement during our current quarter."

The company sells a number of well known snack brands, including Luigi's ices, and Minute Maid frozen juice bars, Whole Fruit sorbet, Superpretzel, Tio Pepe's and The Funnel Cake Factory.

The company's reliance on foodservice did not work in its favor for the third quarter, as foodservice sales was $116.6 million compared to $193.35 million for last year's third quarter.

Approximately two thirds of the company's sales are to venues and locations that have shut down or sharply curtailed their foodservice operations so the company anticipates COVID-19 will continue to have a negative impact on its business.

Retail, a smaller part of the overall business, showed improvement. Retail supermarket sales were $57.5 million for the third quarter compared to $41.76 million for the same period in 2019.

The company said that sales for the last five weeks of the fiscal quarter improved to being down approximately 24% from a year ago as parts of the economy that impact its operations began to open up.