JBSS Telefonkonferenz zu den Ergebnissen des 1. Quartals des Geschäftsjahres 2027: Marge verengt sich bei wachsender Auftragsfertigung

Wichtigste Erkenntnisse

• Der Nettoumsatz im 1. Quartal des Geschäftsjahres 2027 sank im Jahresvergleich um 3,5 % auf 288,1 Mio. US-Dollar, was in erster Linie darauf zurückzuführen ist, dass der gewichtete durchschnittliche Verkaufspreis pro Pfund um 3,6 % fiel. Das Gesamtabsatzvolumen blieb weitgehend unverändert.
• Der Rohertrag verringerte sich um 9,6 % auf 48,9 Mio. US-Dollar, während die Rohmarge aufgrund von wettbewerbsbedingtem Preisdruck, verzögerten Preisanpassungen, höheren Herstellungskosten und einem unvorteilhaften Produktmix von 18,1 % auf 17,0 % sank.
• Der Nettogewinn fiel von 18,7 Mio. US-Dollar auf 13,2 Mio. US-Dollar. Das verwässerte Ergebnis je Aktie lag bei 1,11 US-Dollar im Vergleich zu 1,59 US-Dollar im 1. Quartal des Geschäftsjahres 2026, verbesserte sich jedoch um mehr als 50 % gegenüber dem 4. Quartal des Geschäftsjahres 2026.
• Das Volumen im Verbraucherkanal ging um 6,7 % zurück, einschließlich eines Rückgangs von 6,3 % beim Handelsmarkenvolumen. Das Auftragsfertigungsvolumen stieg um 41,3 %, während das Volumen bei gewerblichen Zutaten um 3,7 % zulegte.
• Das Management geht davon aus, dass zusätzliches Auftragsfertigungsgeschäft das verlorene Verbrauchervolumen ersetzen wird, nicht jedoch notwendigerweise den damit verbundenen Rohertrag, da die Kanalverschiebung zu einem weniger vorteilhaften Umsatzmix führt.
• JBSS plant, Anfang Januar oder Anfang Februar kundenabhängige Preisanpassungen umzusetzen. Das Management hat den potenziellen Nutzen für die Rohmarge nicht quantifiziert, da die Beschaffungskosten für mehrere Rohstoffe weiterhin unsicher sind.

Wichtigste Finanzdaten

Geschäfts- und operative Entwicklung

Das Volumen im Verbraucherkanal sank um 6,7 %, was vor allem einen Rückgang von 6,3 % beim Handelsmarkenvolumen widerspiegelt. Die Lieferungen von Handelsmarken-Nüssen und -Studentenfutter lagen um 8 % niedriger, beeinträchtigt durch Kategorieschwäche, reduzierte Regalflächen bei einem Massenhändler und eine schwächere Innovationsleistung bei einem landesweiten Lebensmitteleinzelhändler.

Die Lieferungen von Handelsmarken-Riegeln gingen um 4 % zurück. Das Mainstream-Riegel-Segment blieb schwach, und Verbraucher wichen auf kleinere Packungsgrößen und Proteinriegel aus, wo nationale Marken stärker vertreten sind. Die Einführung eines neuen "Better-for-you"-Produkts und ein erweitertes Geschäft mit einem Bestandskunden glich den Rückgang teilweise aus.

Nüsse zum Kochen und Backen waren eine relative Stärke. Die Lieferungen von Handelsmarken-Backnüssen von JBSS stiegen um 29 % und übertrafen damit das Volumenwachstum der Kategorie von 9 %, was auf Vertriebsgewinne im Lebensmitteleinzelhandel und in Massenmärkten zurückzuführen ist.

Das Volumen bei gewerblichen Zutaten stieg um 3,7 %, angeführt von höheren Umsätzen mit Erdnuss-Pressware an Erdnussölverarbeiter. Die Umsätze im Foodservice-Bereich verzeichneten ebenfalls einen leichten Zuwachs, der jedoch teilweise durch geringere Industrieumsätze infolge geplanter Geschäftsaustritte, schwächerer Nachfrage und eines unvorteilhaften Bestellzeitpunkts ausgeglichen wurde.

Das Auftragsfertigungsvolumen stieg um 41,3 %, in erster Linie aufgrund höherer Umsätze mit Snacknüssen an einen Bestandskunden. Ein Neukunde trug im Quartal etwa 7,9 Mio. Pfund bei und dürfte nach Erwartung des Managements im weiteren Verlauf des Geschäftsjahres weiter hochfahren.

Ausblick des Managements

Das Management rechnet damit, einen erheblichen Teil des verlorenen Verbrauchervolumens durch zusätzliches Auftragsfertigungsvolumen zu ersetzen. Der resultierende Kanalmix wird jedoch voraussichtlich weniger vorteilhaft sein.

JBSS nimmt neue Hochgeschwindigkeitskapazitäten für Riegel in Betrieb. Das Management erwartet, dass die Vorteile aus den Hochgeschwindigkeitslinien für Frucht-Getreide-, Chewy- und Proteinriegel im 4. Quartal des Geschäftsjahres 2027 einsetzen werden, wobei mehrere Produkteinführungen für das 4. Quartal und das 1. Quartal geplant sind.

Die derzeit in die Kommerzialisierung gehende Riegellinie dürfte innerhalb von drei bis sechs Monaten weitgehend optimiert sein. Die Frucht-Getreide-Linie soll im 3. Quartal des Geschäftsjahres in Betrieb gehen und dürfte gegen Ende des 4. Quartals des Geschäftsjahres vollständig optimiert sein. Die Kundenlieferungen von Proteinriegeln beginnen voraussichtlich gegen Ende des 4. Quartals des Geschäftsjahres und setzen sich bis ins 1. Quartal des Geschäftsjahres hinein fort.

Das Management plant zudem, die Preis-Packungs-Architektur anzupassen, um niedrigere absolute Kaufpreise anzubieten und gleichzeitig den Nährwert und die gesundheitlichen Merkmale von Nüssen und Studentenfutter hervorzuheben.

Risiken und wichtige Beobachtungspunkte

Wettbewerbsbedingter Preisdruck, Volatilität bei den Rohstoffkosten und der Zeitpunkt der Preisanpassungen gegenüber Kunden belasteten die Rohmarge. Auch die Kosten für Fracht, Gerätereparatur und -wartung, Miete und Vergütungen stiegen an.

Das Management beschrieb das Wettbewerbsumfeld aufgrund der Kategorieschwäche und von Überkapazitäten in der Produktion von Nüssen und Studentenfutter als schwieriger als üblich. Zwei Konkurrenten haben jedoch Produktionsstätten geschlossen oder schließen diese derzeit, was nach Ansicht des Managements die Branchenüberkapazitäten verringern und neue Geschäftsmöglichkeiten eröffnen könnte.

Etwa 50 % bis 60 % des Rückgangs bei Handelsmarken-Nüssen und -Studentenfutter waren mit zuvor verlorenem Geschäft bei zwei Kunden verbunden. JBSS rechnet damit, dass die Auswirkungen der Umstellung eines Massenhändlers auf Dual-Sourcing noch zwei bis drei Quartale anhalten werden.

Die Verbrauchernachfrage reagiert weiterhin sensibel auf die Inflation, wobei Einkäufer verstärkt zu preisbewussten Einzelhändlern und kleineren Packungsgrößen greifen. Auch die Prognoseerstellung ist schwieriger geworden, da sich das Kaufverhalten und die Rohstoffmärkte verändern.

Highlights der Fragerunde mit Analysten

• Verlorenes Verbrauchergeschäft: JBSS hat einen Teil des Geschäfts zurückgewonnen, das verloren gegangen war, nachdem ein Online-Händler seine Lieferanten konsolidiert hatte. Das Management rechnet mit der Wiederaufnahme der Lieferungen im 4. Quartal des Geschäftsjahres oder Anfang des 1. Quartals des Geschäftsjahres.
• Wirtschaftlichkeit der Auftragsfertigung: Das Management erklärte, dass zusätzliches Auftragsfertigungsgeschäft das verlorene Verbrauchervolumen ersetzen sollte, jedoch nicht, dass es den verlorenen Rohertrag ersetzen würde.
• Preisanpassungen: Die neuen Preise werden voraussichtlich Anfang Januar oder Anfang Februar in Kraft treten, je nach Kunde. Die Auswirkung auf die Marge bleibt unquantifiziert, da die Beschaffungskosten für Erdnüsse, Pekannüsse und Walnüsse noch nicht vollständig bekannt sind.
• Chancen bei Proteinriegeln: Eine strategische Beraterüberprüfung bestätigte den Fünfjahres-Wachstumsplan von JBSS und dessen Fokus auf Handelsmarken-Proteinriegel, vorbehaltlich wettbewerbsfähiger Preise, Qualität und Produktkonsistenz.
• Hochlauf der Investitionen: Neue Riegellinien sind größer, schneller und komplexer, was zu vorübergehenden Anlaufineffizienzen führt. Das Management geht davon aus, dass die aktuelle Linie innerhalb von drei bis sechs Monaten weitgehend optimiert sein wird.

Vollständiges Transkript des Earnings Call

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Jasper Sanfilippo

Good morning, everyone, and welcome to our 2027 first quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO and President; and Jeffrey Sanfilippo, our Executive Chairman.

We may make some forward-looking statements today. These statements are based on our current expectations and they involve certain risks and uncertainties. The factors that could negatively impact results are explained in various SEC filings that we have made, including Forms 10-K and 10-Q. We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business.

First, I'd like to take this opportunity to thank my brother, Jeff, for his exceptional leadership, guidance and vision. Through Jeff's 20-plus years as CEO, he has well positioned the business for great success. Frank, the management team and myself are looking forward to working with Jeff as he moves into his new role as Executive Chairman. I am honored to serve as Chief Executive Officer and build upon the strong foundation of our company. We remain committed to profitable growth, operational excellence, disciplined capital allocation and maintaining our financial strength while continuing to deliver exceptional service to our customers.

We delivered a solid start to our fiscal 2027 in a difficult economic environment. Sales volume was unchanged from the prior year period, marking our third consecutive quarter of stable or improving volume performance. While last year's exceptionally strong first quarter diluted EPS provided a difficult comparison, we improved diluted EPS by more than 50% compared to the fourth quarter of fiscal 2026, demonstrating a meaningful improvement in profitability and positive momentum during the 2026 calendar year. Looking ahead, we remain focused on executing our strategic priorities and believe we are well positioned to build on this momentum throughout fiscal 2027.

Our long-range plan defines our future growth priorities, focused on accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars, while expanding branded distribution behind Orchard Valley Harvest and Fisher through insight-driven products and packaging innovation. Execution of our long-range plan is anchored in delivering value-added solutions and high-quality innovative products based on our extensive industry and consumer expertise.

Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline aligned with consumer trends such as protein bars. For our branded nut and trail mix business, we are focused on attracting new consumers through product innovation, broader distribution across traditional and alternative channels and expanded purchasing occasions. Promotion and advertising investments are focused on driving branded growth, supported by an omnichannel strategy across recipe nuts, snack nuts and trail mix.

Our long-range plan also includes growth through product and packaging innovation. To support these initiatives, we made significant capital investments in equipment and infrastructure, improvements to expand our production capabilities, improve efficiency and enhance product offerings for our customers. Price inflation and consumer sentiment continue to be a challenge for the snack category across many food segments. We faced significant supply chain cost increases over the past year, and our teams have worked hard to mitigate margin compression through pricing adjustments and efficiency gains. Our team also worked hard to drive additional costs out of our operations and supply chain and manage our inventory levels. Demand planning becomes challenging when consumer behavior changes and markets become volatile. So we are prioritizing resources to work with our key retail partners on better forecasting and order planning.

This is the busy season for our nut and trail business. Our sales, marketing and operations team have done a great job building our business for the upcoming holiday season, and we are in full swing with shipments to customers. As we have shared in our previous call, the inflationary environment has changed consumer behavior and have seen them shift to more value-focused retailers such as club stores. Our teams have worked hard to expand our retail distribution in clubs and alternative channels with innovative product and pack sizes. Our OVH brand has gained a new rotation at a key club retailer and the rollout of our OVH Go-Go Protein snack item is gaining traction, and we gained new distribution at a major grocery retailer.

I am proud of our R&D team for creating amazing innovative snack products and building a pipeline for future growth. And a call-out to our sales team who provided value in building collaborative partnerships with major retailers across the country.

I will now turn the call over to Frank Pellegrino to provide additional information on our financial performance for our first quarter.

Frank Pellegrino

Thanks, Jasper. Starting with the income statement. Net sales for the first quarter of fiscal 2027 decreased by 3.5% to $288.1 million compared to net sales of $298.7 million for the first quarter of fiscal 2026. The decrease in net sales was due to a 3.6% decrease in the weighted average sales price per pound, which is primarily attributable to a shift in product mix toward lower-priced items and lower selling prices for walnuts, trail and snack mix products and peanuts resulting from lower commodity acquisition costs. These decreases were partially offset by higher selling prices for pecans and almonds due to higher commodity acquisition costs. Sales volume decreased for all major product types, except for peanuts, walnuts and pecans, all of which experienced volume growth in the quarter.

Sales volume decreased 6.7% in the consumer distribution channel, primarily due to a 6.3% reduction in private brand sales volume. The decline was driven mainly by lower nut and trail mix volume and, to a lesser extent, lower bar volume. Bar sales were impacted by softness in mainstream bars and consumer migration to smaller pack sizes, partially offset by a successful launch of a new better-for-you bar offering and expanded bar business with an existing customer.

Nut and trail mix sales volume was negatively impacted by lower sales to several existing customers, driven by category softness in snack and trail mix products and peanuts, reduced promotional activity, and the impact of previously lost business. These declines were partially offset by new business to a grocery retailer and additional recipe nut volume to 3 existing customers.

Sales volume increased 3.7% in the commercial ingredients distribution channel, mainly driven by increased sales of peanut crushing stock to peanut oil processors. In addition, Foodservice sales increased modestly due to new business, customer growth and favorable order timing. These increases were partially offset by lower industrial sales resulting from planned business exits, lower customer demand and unfavorable order timing.

Sales volume increased 41.3% in the contract manufacturing distribution channel, primarily due to increased snack nut sales to existing customer, which was partially offset by non-repeat of a prior year granola sales opportunity. Gross profit decreased $5.2 million or 9.6% to $48.9 million compared to last year's first quarter, driven by competitive pricing pressures and the timing of pricing actions for peanuts, bars, snack and trail mix. Additionally, manufacturing expenses increased due to higher freight, equipment repairs and maintenance and rent costs.

Gross profit declined to 17% of net sales compared to 18.1% for the first quarter of fiscal 2026 due to the reasons previously mentioned and an unfavorable shift in product mix. Total operating expenses increased $2.5 million year-over-year, primarily driven by increases in professional fees, freight costs, rent expense and compensation expense. These increases were partially offset by lower incentive compensation expense. Total operating expenses as a percentage of net sales increased to 10.3% from 9.1% in the prior comparable quarter due to the reasons previously mentioned and a lower net sales base. Interest expense was $700,000 for the first quarter of fiscal 2027 compared to $1 million for the first quarter of fiscal 2026 due to lower borrowings under our credit agreement.

Net income for the first quarter of fiscal 2027 was $13.2 million or $1.11 per diluted share compared to $18.7 million or $1.59 per diluted share for the first quarter of fiscal 2026.

Now taking a look at inventory. Total value of inventories on hand at the end of this year's first quarter remained substantially consistent with last year's first quarter. However, weighted average cost per pound of raw nut and dry fruit input stock on hand decreased 20.6% year-over-year, primarily due to higher on-hand quantities of peanuts, both in-shell and meats purchased at lower costs, partially offset by higher acquisition costs of pecans and almonds. Please refer to our Form 10-Q for additional details regarding our financial performance for the first quarter of fiscal 2027.

Now I'll turn the call back over to Jasper to provide additional comments.

Jasper Sanfilippo

Thanks, Frank, for the financial updates. Success requires smart, strategic and the right business model for sustainable growth. It also requires a talented and committed group of leaders across the organization. We have all of those elements of success at JBSS.

Turning over to category data. I will review first quarter category trends and then discuss the shipment performance of businesses. Unless otherwise noted, market volume and dollar trends are based on Circana panel data for the 13 weeks ended September 27, 2026, compared with the same period last year. Pricing trends reflect Circana MULO+ average price per pound. Category references use Circana nut, trail mix and bar syndicated definitions.

We will start with the broader snack aisle as defined by Circana. The first quarter, category volume was essentially flat, declining just 0.3%. Our dollar sales increased 4.5%, driven by higher prices. This represented a modest deceleration in volume compared with the fourth quarter. Within snack nuts and trail mix, category volume declined 6% and dollar sales declined 3%, consistent with the volume softness we saw last quarter.

Average prices per pound increased 4% in snack nuts with increases across all nut types and 6% in trail mixes. Our private label consumer snack and trail shipments underperformed the category with first quarter pound shipments down 8% versus last year. The decline reflected category softness, reduced shelf space at a mass merchandiser and weaker performance from innovation at a national grocer.

Turning now to the recipe nuts category. In the first quarter, the recipe nut category continued its positive momentum with category volume up 9% and dollar sales up 10%. Growth was driven by private label as a discount retailer expanded its store count. Average price per pound was flat overall, although results varied by nut type. Almond and walnut prices declined while pecan prices increased. Our private label recipe nut shipments outperformed the category with first quarter pound shipments up 29% versus last year. The robust performance reflects significant distribution gains across both grocery and mass merchandising channels.

Moving next to the bars category. In the first quarter, bars category volume was essentially flat, down 0.3%, while dollar sales increased 6%. This represented a moderation in volume compared with the last quarter. Dollar growth continued to be led by national brands in the protein bar segment. Private label volume declined 10% and dollar sales declined 5%, reflecting the consumer shift towards protein bars, where national brands are more heavily represented, as well as reduced private label distribution in the mass and club channels. Our private label bar shipments declined 4% versus the prior year, reflecting an unfavorable mix shift and continued softness in mainstream bars.

In closing, as we look ahead to the remainder of fiscal 2027, we are confident in our ability to navigate the near-term challenges in our consumer channel. While we expect to replace a significant portion of the lost consumer volume with incremental contract manufacturing volume, the shift will result in a less favorable sales mix. However, we continue to identify opportunities to grow the consumer business. Our brands and many of our products remain well aligned with consumer demand for nutritious better-for-you snacks, and we are actively responding to current category trends while focusing on initiatives to improve category performance and drive category growth.

We are also encouraged by new business opportunities we are pursuing in our nut and trail mix category. In addition, we continue to see significant opportunities to expand our protein-forward bar offerings where consumer demand and category growth remain strong. We recently completed a strategic consulting engagement that reinforced our long-term growth plan and identified further opportunities to accelerate long-term growth. In addition, we are currently evaluating our cost structure to maximize efficiency, prioritize resources and ensure we proactively respond to evolving market conditions. We are excited about the future of the company and grateful to our employees for their hard work, dedication and commitment to executing our strategy.

All of us have a steadfast commitment to develop plans to create shareholder value and provide relevant, profitable, value-added products and services to our customers and consumers. Our mission is to provide great-tasting, innovative products that brings joy, nourishes people and protects the planet. We appreciate your participation in the call, and thank you for your interest in our company.

We will now open the call to questions. Angelina, please queue up the first question.

Operator

[Operator Instructions] Our first question comes from the line of Balzhan Tleuzhanova of Freedom Broker.

Fragen und Antworten

Balzhan Tleuzhanova

Could you please help us understand how much of the consumer volume decline reflected previously lost business versus weaker demand at existing customers?

Frank Pellegrino

Sure. This is Frank. I'll take that answer. Approximately 50% to 60% of the decline in the private label nuts and trail was due to lost business, and they were focused on 2 main customers. First, an online retailer who consolidated suppliers last year. We saw the impact starting in Q4 of last year. However, we were able to win back some of that business, and we expect to start shipping in Q4 or early Q1. And the second customer is a mass merchandiser, and this was due to that customer dual-sourcing several nut types where we were the sole supplier. So we will see that impact for the next 2 or 3 quarters.

Balzhan Tleuzhanova

My next question, do you expect additional contract manufacturing business to replace gross profit lost in the consumer channel as well as volume?

Frank Pellegrino

The additional business in the contract manufacturing channel will replace the lost volume in the consumer channel.

Balzhan Tleuzhanova

Okay. When do you expect your pricing actions to take full effect? And how much margin improvement could they support from the first quarter level?

Jasper Sanfilippo

We are currently working on our pricing actions that go into effect either early January or early February, depending on the customer. We have not yet calculated what the gross margin impact will be going forward as we still do not know all of the acquisition costs that were vertically integrated, such as peanuts, pecans and walnuts.

Balzhan Tleuzhanova

How much of the contract manufacturing growth came from the new customer? And when do you expect that business to reach its full run rate?

Frank Pellegrino

Sure. We're still on-ramping that new customer, and we will continue on ramping for the rest of the year. So it's hard to give you the exact number. But for instance, Q1, that new customer had approximately I believe, 7.9 million pounds of volume in Q1. So we expect that number to maintain and grow in the next several quarters.

Balzhan Tleuzhanova

When do you expect your recent capital investments to begin making a meaningful contribution to earnings?

Jasper Sanfilippo

We are currently starting up the high-speed bar lines as we speak. We would expect in Q4, you would start seeing the benefit of both high-speed fruit and grain as well as high-speed chewy as well as our protein line as well. We have several launches planned for Q4 and Q1 across those 3 channels.

Operator

Our next question comes from the line of Hamed Khorsand of BWS Financial.

Hamed Khorsand

So first off, just on the bar lines that you're launching now, how long before you fully absorb the cost inefficiencies?

Jasper Sanfilippo

Current projection, as we stated before, is about 3 to 5 years.

Hamed Khorsand

No, I was talking about the inefficiencies like more on the gross margin side because you're ramping...

Jasper Sanfilippo

Yes. So we're commercializing one of the bar lines now. Obviously, they're much bigger, faster and a bit more complicated. So I would say within 3 to 6 months, that bar line should be fairly well optimized. And then fruit and grain is coming online in Q3. So I would expect sometime late Q4 for that line to also be fully optimized.

Hamed Khorsand

Okay. And then can you just talk about the competitive environment? It seems like you lost the online merchant. Now the online merchant is back. Consumers are more gravitating more towards the lower end of the market. How are you guys transitioning with all this? It seems like there's a lot going on for you.

Jasper Sanfilippo

Yes. I would say the competitive environment is tougher than what we have normally seen. Obviously, as the category has softness, other competitors are also looking for ways to continue to maintain or grow their business. So it is challenging in that environment. That being said, however, there are certain competitors that have decided to exit the business, which also gives us additional opportunity.

Jeffrey Sanfilippo

Yes, it's Jeffrey. I would just add that -- so there's a lot of excess capacity in nut and trail manufacturing, which has caused -- obviously, you see the declines in the category. But as Jasper mentioned, there's 2 competitors that are closing down or have closed down their manufacturing sites, which will take some of that excess capacity out of the industry. Thus, we are gaining back some of the market business that we lost over the last 6 months or so. So we're bullish as far as kind of manufacturing and what the opportunities are there with less capacity -- excess capacity in the industry.

Operator

Our next question comes from the line of [Ronald Miterko] of MCM.

Unknown Analyst

Can you hear me all right, guys? Welcome, Jasper, and nice to hear from you, Jeff and Frank. My questions have mostly been answered, but I just wanted to double-check on the protein bar line, we mean Q4 as in calendar Q4, so as we speak.

Jasper Sanfilippo

I'm sorry, our fiscal Q4.

Unknown Analyst

And at that point in fiscal Q4, some of the efficiencies will be absorbed and it will be -- what you're hoping is up to speed in terms of operational?

Jasper Sanfilippo

Correct. We will actually be shipping protein bars at the end of Q4. So that work is done now. We'll be commercializing and fine-tuning that line throughout Q3 and early Q4 with customer shipments beginning at the end of Q4 and Q1.

Unknown Analyst

Okay. And then just on the -- so I know things are changing so dramatically as some of the questioners have pointed out. But could you just give a little bit of clarity on the nature of the consulting effort and what you found in terms of cost reduction possibilities and so forth, just the usual things. It seems like you guys are probably getting into a little bit more in the weeds on this stuff.

Jeffrey Sanfilippo

Yes. So the consulting engagement was to really validate our 5-year growth plan. As you know, part of our thesis is expanding the protein bar category into private brands since there's very little distribution today. And so the consulting agreement validated that. They validated that consumers will buy protein-forward bars, private label versions as long as there's competitive pricing and the quality and consistency is there. So we validated that. They also looked at the nut and trail category, as we've talked about on previous calls, there's been declines in consumption. A lot of that was driven by price inflation across every nut type, packaging, distribution, fuel, surcharges, packaging materials. And so they validated that.

There's still opportunities in the nut and trail category. We've got to educate consumers on the value of nuts and the health benefits of nuts, especially those that are on GLP-1s that are looking for satiating protein-forward healthy snacks. And so the result of that is we've got to do a better job educating consumers on why nuts are still a great snack item. We've got to work on price pack architecture to get lower price points because of inflation and because of the economy today.

So they've given us a lot of good validations on our growth thesis. Now it's a matter of executing some of the things that they recommended. So we're very excited about the results of their study and validates a lot of what we've talked about and what our plans are. Now it's a matter of executing some of the key findings that they provided.

Unknown Analyst

Okay. And what -- if that's it on that one. Then the last question is, could you just give a little bit of almost like standing on one foot explanation of what's going on with pricing? I know in the past, sometimes when it's been difficult as costs come down with certain nuts and then -- almost better when you get a little bit of like pricing flexibility either from some more advantageous procurement techniques -- what's going on?

Jasper Sanfilippo

Yes. As you can imagine, as pricing going up, it is always a challenge for us to execute that with our retail partners, particularly in a category that's showing the softness that it is. Certain attributes of the price increase like fuel-related or anything oil-related as part of our cost are pretty easy. And I think our customers understand what is driving that. It gets more challenging when we have to describe why some of the underlying commodities or ingredients are going up. But in addition to that and being sensitive to the category trends and the macroeconomic environment, as Jeff mentioned, price pack architecture is key.

Great thing is nuts are healthy and nutritious, and we need to do a better job at making those claims. So as consumers go down the aisle, they can see the health benefits of nuts. And so I think what we're going to see going forward is a modification to our price pack architecture to get lower absolute purchase cost at retailers as well as being able to put those claims on the packages so the consumers can see how healthy nuts and trail mix can be for you.

Operator

I am showing no further questions at this time. I would now like to turn it back to Jasper for closing remarks.

Jasper Sanfilippo

Thank you, Angelina. If there are no more questions, I want to thank you again for your interest in JBSS. This concludes the call for our first quarter of fiscal 2027 operating results. Have a great rest of your day.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.