J & J Snack Foods misses Q1 sales estimates, sets new buyback plan

Overview

• Snack food maker's fiscal Q1 sales declined, missing analyst expectations

• Adjusted EBITDA for fiscal Q1 grew 7% yr/yr

• Company announced new $50 mln share repurchase authorization

Outlook

• Company expects $20 mln annualized savings from Project Apollo initiatives

• J & J Snack Foods announces new $50 mln share repurchase authorization

• Company plans innovative product launches in second quarter, including Dippin’ Dots for retail

Result Drivers

• PORTFOLIO RATIONALIZATION - Sales decline attributed to strategic portfolio rationalization in bakery business, impacting Food Service segment

• GROSS MARGIN IMPROVEMENT - Gross margin improved to 27.9% due to Apollo transformation initiatives and favorable product mix

• PRETZEL SALES GROWTH - Pretzel sales increased 6.9%, driven by Bavarian formula pretzels

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for J&J Snack Foods Corp is $130.00, about 36.6% above its February 2 closing price of $95.20

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 20 three months ago

Press Release: ID:nGNXbxS0cl

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