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Investing.com -- Shares of John B. Sanfilippo & Son (NASDAQ: JBSS) tumbled 13% after the company reported second-quarter earnings that fell short of analysts’ expectations. The company, known for its production and distribution of nuts and snacks, disclosed a diluted EPS of $1.16, which was $0.28 below the consensus estimate of $1.44. Revenue for the quarter was reported at $301.1 million.
Despite achieving the highest quarterly net sales and largest quarterly sales volume in the company’s history, with a 3.4% increase in net sales and a 7.1% increase in sales volume, John B. Sanfilippo & Son’s stock suffered a significant drop. The company’s gross profit decreased by 9.8% to $52.3 million, and its gross profit margin fell to 17.4% from 19.9% in the comparable quarter of the previous year. The decrease in gross profit is primarily attributed to lower selling prices under competitive pressure and higher commodity acquisition costs for most tree nuts.
The company’s operating expenses also saw an uptick, increasing by $2.5 million due to a one-time gain in the previous year’s quarter that did not recur, as well as increases in freight, rent, and compensation expenses. Inventory values rose by 4.3%, mainly due to higher acquisition costs for major tree nuts and chocolate, alongside increased quantities of almonds and cashews on hand.
For the six-month period, net sales increased by 9.9% to $577.3 million, and sales volume saw a 14.9% increase across all distribution channels, largely due to the impact of the Lakeville Acquisition. However, diluted EPS decreased by 31.4% to $2.16.
CEO Jeffrey T. Sanfilippo expressed optimism about the company’s sales volume growth and plans to focus on enhancing profitability through operational efficiencies and optimized pricing strategies. Looking forward, the company aims to consolidate its Elgin and Lakeville distribution operations and add manufacturing equipment to increase production capabilities and efficiency.
The company’s performance reflects the challenges it faces in a competitive market, with strategic pricing decisions and increased commodity costs impacting profitability despite growth in sales volume. John B. Sanfilippo & Son remains focused on executing its long-term plan and creating shareholder value through strategic initiatives and operational excellence.
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