Vending

John B Sanfilippo boosts earnings as sales fall for Q3 2021

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April 29, 2021

John B. Sanfilippo & Son Inc.'s net sales fell from $211.6 million for the third quarter of fiscal 2020 to $207.9 million for the third quarter of fiscal 2021 ending March 25, 2021, according to an earnings release.

The company reported record net income and diluted earnings per share in the quarter despite the continuing challenges in its foodservice business and in its contract packaging distribution channel due to the impact of COVID-19.

Net income in the quarter rose from $13.46 million in Q3 2020 to $14.7 million in Q3 2021.

Basic earnings per share rose from $1.17 in Q3 2020 to $1.28 in Q3 2021, while diluted EPS rose from $1.17 to $1.27.

The $207.9 million in sales beat analyst expectations by $5.2 million, according to Seeking Alpha, while the GAAP EPS of $1.27 beat analyst estimates by 9 cents.

Shares traded at $88.17 Wednesday against a 52-week range of $69.07-$93.96.

"As was the case in the second quarter of fiscal 2021, we reported record net income and diluted earnings per share despite the continuing challenges we faced in our foodservice business, in our contract packaging distribution channel and with our Orchard Valley Harvest brand due to the impact of COVID-19," CEO Jeffrey T. Sanfilippo said in the press release. "These record results were again driven in large part by lower commodity acquisition costs for all major tree nuts and strong sales volume growth for private brand products in our consumer distribution channel."

Sales volume increased 9.1% in the consumer distribution channel due to an 11.8% increase in sales volume for private brand snack nuts and trail and snack mixes. The increase in sales volume for these private brand products came from new distribution at existing customers, a shift in consumer preferences to lower priced private brand products and growth in snacking as many consumers continue to purchase food for consumption at home.

Sales volume in the consumer distribution channel accounted for 77.7% of total sales volume in the current third quarter.

The sales volume decline for Fisher recipe nuts primarily resulted from lost distribution at two grocery customers.

The sales volume decrease for the Orchard Valley Harvest brand was attributable to lower foot traffic at a major customer in the non-food sector due to COVID-19.

The sales volume decrease for Fisher snack nuts was due primarily to reduced merchandising activity for Fisher inshell peanuts as the company is in the process of discontinuing that product line, which will be completed by the end of the fourth quarter of fiscal 2021.

The sales volume decline for Southern Style Nuts was due primarily to the discontinuance of an item at a major customer.

Sales volume declined 29.8% in the commercial ingredients distribution channel primarily as a result of a 25.7% decline in foodservice sales volume and a decline in sales of peanut crushing stock to peanut oil processors.

The decline in foodservice sales volume was mainly due to a decline in air travel and nationwide restrictions on indoor restaurant dining from COVID-19.

Sales volume declined 19.2% in the contract packaging distribution channel due to the impact of lower convenience store foot traffic on one customer's business from COVID-19.

"We continued to see improvement in our foodservice business as we did in the first two quarters of fiscal 2021 with dining out and air travel having increased," Sanfilippo said. "Finally, our record performance over the last two quarters put us in a position to pay a $2.50 per share special dividend during the current third quarter."

For an update on how the coronavirus pandemic is affecting convenience services, click here.