Net income at J&J Snack Foods in the year ended Sept. 28 totaled $94,819,000, equal to $5.04 per share on the common stock, down 9% from $103,596,000, or $5.54 per share, in fiscal 2018. Fiscal 2018 results benefited from a $20.9 million gain on the re-measurement of deferred tax liabilities and an $8.8 million reduction in income taxes related primarily to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act in December 2017.
Net sales increased 4% to $1,186,487,000 from $1,138,265,000.
“Foodservice’s soft pretzels continued its recent strong sales growth in convenience store chains, but sales to restaurant chains have been down slightly,” Gerald B. Shreiber, president and chief executive officer, said during a Nov. 8 conference call with analysts. “Churros sales continue to be strong in warehouse club stores and across the board. Funnel cake sales continue to do well in schools. Bakery sales were up this quarter as we had significantly higher sales to one customer. Handheld sales were down 23% for the quarter because of a drop-off in the co-pack business and sales to restaurants chains. Frozen juice bars and Icee sales were up in the quarter and the year due to increased warehouse club store business.
“Overall sales to restaurant chains are down this year while sales to schools have been up modestly.”
Overall, total foodservice operating income at J&J Snack Foods increased 5.5% in fiscal 2019 to $78,130,000 from $74,056,000 in the same period a year ago. Sales, meanwhile, increased 2% to $761,603,000. Within the foodservice division, sales of bakery products totaled $384,636,000, up 3.5% from the same period a year ago, while soft pretzel sales increased narrowly to $209,227,000 from $208,544,000, and churros decreased 19% to $31,685,000.
In the retail supermarket segment, operating income totaled $8,876,000, up 7% from $8,304,000 a year ago. Total sales in the retail supermarket segment were $119,276,000, down from $120,939,000 in the same period a year ago. Within the retail supermarket division, sales of soft pretzels decreased less than 1% to $36,264,000, frozen juices and ices decreased 1% to $73,751,000, and handhelds fell 12% to $10,902,000.
Looking ahead to fiscal 2020, Shreiber identified a few main priorities.
“We want to continue with our growth, and we’re looking for solid mid-percentage growth in our overall business,” he said. “And that will be hopefully augmented by some of our newer products that we’re doing presently.”
Shreiber said the company believes its innovation pipeline heading into 2020 is “at least as good as and perhaps a couple of points even better” than what it was in 2019.
“We continue to overinvest in our manufacturing, which includes our R.&D., and we have multiple products in the pipeline that we plan on introducing during the next 12 months,” he said.
Gerard G. Law, senior vice-president, said new products include soft pretzels and frozen desserts geared toward the c-store and health care channels.