Sanfilippo EPS Jumps 34% in Fiscal Q4

Key Points

• Diluted earnings per share (GAAP) jumped 33.7% in Q4 FY2025, even though revenue remained nearly flat year over year.

• Core consumer and branded sales volumes declined sharply in Q4 FY2025 (consumer distribution channel -11.5%, branded -19.7%), but this was partially offset by strength in contract manufacturing ( 18.7%) and ingredient ( 8.7%) channels.

• Operating expenses decreased by $6.7 million in Q4 FY2025, driven by lower incentive compensation, freight, warehousing, and marketing costs, even as gross margin slipped due to higher commodity costs.

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John B. Sanfilippo & Son (NASDAQ:JBSS), a major nut processor and snack food company, released its earnings for the fourth quarter of fiscal 2025 on August 20, 2025. The biggest news was a strong surge in diluted earnings per share (EPS), which rose to $1.15 from $0.86 in the prior year quarter, representing a 33.7% increase. Total revenue (GAAP) was nearly unchanged at $269.1 million, just slightly below last year’s figure, but underlying sales volumes fell in the company’s core branded (-19.7%) and private label (-10.7%) categories. Gross profit and margin both declined in FY2025, mainly due to higher nut acquisition costs. Overall, the quarter showed resilient profits but underlined ongoing challenges in consumer demand and margin strength.

About John B. Sanfilippo & Son and Its Business Model

John B. Sanfilippo & Son is a leading processor and distributor of nuts and related snack products in the United States. It sells peanuts, almonds, cashews, walnuts, pecans, and snack bars through brands like Fisher, Orchard Valley Harvest, and Southern Style, as well as private label and contract manufacturing partnerships.

The company’s core strengths are its vertical integration and multi-channel sales strategy. Vertical integration means John B. Sanfilippo & Son manages most steps in its supply chain, from procurement of raw nuts directly from growers to processing and packaging. This approach helps it control quality and costs, while spreading its products across retail, commercial ingredient, and contract manufacturing channels gives resilience against swings in any single market.

Quarter Highlights: Data and Key Developments

The quarter exposed notable shifts in the company’s operations. Overall volume sold fell 5.9% in Q4 FY2025, driven by lower demand in branded and private label products. Consumer channel sales volume dropped 11.5% in Q4 FY2025, including a sharp 19.7% reduction for branded products. The Orchard Valley Harvest brand was hit hardest, declining 42.9% in Q4 FY2025, mostly due to the loss of distribution from a major customer. Private brand sales also declined, down 10.7%, with snack bars falling 16.7% in Q4 FY2025 as the surge following last year’s recall faded. Other snack products like trail mixes and mixed nuts also saw weaker demand.

At the same time, commercial ingredients and contract manufacturing performed better in Q4 FY2025. Volume in the commercial ingredients channel grew 8.7% in Q4 FY2025, driven by higher peanut and peanut butter sales to existing customers. Contract manufacturing volume rose 18.7% in Q4 FY2025, due to increased granola snack bar production at the Lakeville facility, acquired in 2024, and new customer wins. These segments cushioned the impact of weaker consumer sales, but could not fully compensate for declines elsewhere.

The company’s overall gross profit fell by $1.2 million, and gross margin slipped to 18.1% from 18.5% in Q4 FY2025. The main driver was higher acquisition costs for nearly all nut types except pecans in Q4 FY2025. The weighted average cost per pound of nuts increased 30.4% year over year in Q4 FY2025. These rising costs could only partially be offset by operational efficiencies and manufacturing improvements. The increased cost pressure also resulted in a $58.0 million jump in inventory value, reaching $254.6 million in Q4 FY2025. This was due to both elevated nut prices and larger stockpiles ahead of anticipated seasonal demand.

John B. Sanfilippo & Son made aggressive reductions to operating expenses, cutting costs by $6.7 million in Q4 FY2025. Lower incentive compensation, as well as reduced spending on freight, warehousing, and marketing, drove this saving. Operating expenses as a percentage of sales fell to 10.6% in Q4 FY2025.

Dividends were also increased, with the annual payout raised 5.9% to $0.90 per share and a special dividend of $0.60 per share declared for payment in September 2025, both announced in connection with FY2025 results.

Business Focus and Key Success Drivers

The company’s vertical integration remains a central driver. By sourcing inshell nuts directly from growers, especially for pecans, peanuts, and walnuts, it can better manage costs and maintain a steady supply during peak seasons. This approach allows Sanfilippo & Son to pass some cost increases to customers but also exposes it to risks when supply chain volatility or commodity cost surges take place. During Q4 FY2025, higher nut acquisition costs were only partially offset by higher average selling prices and streamlined manufacturing.

John B. Sanfilippo & Son competes in three main channels: consumer products sold through retailers, providing ingredients for food producers, and contract manufacturing for other snack brands. The consumer channel supplies brands and private labels to retailers such as Wal-Mart and Target, and recent periods have seen volatility in sales volumes.

Customer concentration risk is high, with Wal-Mart and Target together accounting for 52% of the company’s net sales in fiscal 2024.

Fluctuations in demand or distribution choices from these customers have a direct and powerful effect on results.

Meanwhile, the ingredient and contract manufacturing channels are now providing important offsets as consumer demand has softened.

Quarter in Review: Analysis and Context

A clear theme this quarter was the divergence between profit growth and underlying business momentum. Despite strong GAAP EPS growth in Q3 and Q4 FY2025, sales volumes in core branded and private label categories declined sharply. Bars, a key area of focus since the company acquired new production capacity last year, saw volumes fall in Q4 FY2025 as the recall-driven demand spike from the prior year was not repeated. Snack and trail mix products also lost ground, driven by the end of certain product lines and weaker retail demand.

Gross margin slipped to 18.1% in Q4 FY2025.

This reflects the ongoing impact of commodity inflation, as higher nut prices and tariffs eat into profitability. Company management pointed to continued improvements in manufacturing efficiency but acknowledged these were insufficient to fully offset cost pressures. Full-year results show a similar margin trend, with gross profit margin (GAAP) dropping from 20.1% to 18.4% in FY2025 compared to FY2024.

The company saved on incentive compensation, freight, warehousing, and marketing, reducing operating expenses to 10.6% of revenue—down from 13.1% last year—in Q4 FY2025.

The inventory buildup was notable. At the end of Q4 FY2025, inventory value was up 29.5% to $254.6 million. Management attributed this to higher per-pound nut acquisition costs and larger quantities of finished goods held in advance of potential seasonal demand. While this helps insulate against supply disruptions, it raises risk if demand remains weak or if nut prices retreat and force inventory write-downs. Debt also increased, with revolving credit facility borrowings and long-term debt rising to $72.1 million in FY2025 from $26.8 million in FY2024, likely to support the inventory strategy and capital spending.

Dividends were increased in two ways: the regular annual dividend was raised 5.9% to $0.90 per share, and a special dividend of $0.60 per share was declared for FY2025. This payout reflects confidence in the company’s ability to generate cash.

No major new product launches were mentioned in the release.

Outlook and What to Watch

Looking forward into fiscal 2026, the company’s management did not provide precise quantitative guidance. Instead, it reiterated its intent to pursue further manufacturing investments, especially in operational efficiency. Management expressed optimism for “strong momentum” in the new year, while acknowledging risks from economic uncertainty, tariffs, ongoing nut price volatility, and consumer demand shifts. No specific revenue or profit targets were made public.

Investors should monitor several areas in upcoming quarters. Inventory levels and nut input costs are also key, as they could impact profitability if market conditions shift. Watch for any major changes involving significant retail partners, given the high customer concentration risk. Finally, keep an eye on capital expenditure execution and possible trends in dividend policy, as these indicate how management views its near-term prospects and cash requirements.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends John B. Sanfilippo & Son. The Motley Fool has a disclosure policy.