John B. Sanfilippo & Son, Inc. (JBSS) Bundle
Understanding John B. Sanfilippo & Son, Inc. (JBSS) Revenue Streams
Understanding John B. Sanfilippo & Son, Inc.’s Revenue Streams
In the first quarter of fiscal 2025, net sales reached $276.2 million, representing an increase of 18.0% compared to $234.1 million in the first quarter of fiscal 2024. This growth was primarily driven by the Lakeville Acquisition, contributing approximately $40.5 million to the quarterly net sales.
Breakdown of Primary Revenue Sources
The following table summarizes the sales by product type as a percentage of total gross sales for the quarters ended September 26, 2024, and September 28, 2023:
| Product Type | September 26, 2024 | September 28, 2023 |
|---|---|---|
| Peanuts & Peanut Butter | 16.6% | 20.1% |
| Pecans | 7.4% | 9.2% |
| Cashews & Mixed Nuts | 17.2% | 21.0% |
| Walnuts | 4.2% | 4.9% |
| Almonds | 6.9% | 9.1% |
| Trail & Snack Mixes | 26.8% | 28.0% |
| Snack & Nutrition Bars | 14.9% | 0.6% |
| Other | 6.0% | 7.1% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate was driven by multiple factors, including:
- Net sales increased by $42.1 million, or 18.0%, from fiscal 2024 to fiscal 2025.
- Sales volume increased by 24.5% in the first quarter of fiscal 2025 compared to the same period in fiscal 2024.
Contribution of Different Business Segments to Overall Revenue
The following table illustrates the net sales by distribution channel for the quarters ended September 26, 2024, and September 28, 2023:
| Distribution Channel | September 26, 2024 ($ thousands) | Percentage of Total | September 28, 2023 ($ thousands) | Percentage of Total | $ Change | % Change |
|---|---|---|---|---|---|---|
| Consumer | $229,384 | 83.1% | $184,334 | 78.8% | $45,050 | 24.4% |
| Commercial Ingredients | 26,900 | 9.7% | 28,135 | 12.0% | ($1,235) | (4.4%) |
| Contract Manufacturing | 19,912 | 7.2% | 21,636 | 9.2% | ($1,724) | (8.0%) |
| Total | $276,196 | 100.0% | $234,105 | 100.0% | $42,091 | 18.0% |
Analysis of Significant Changes in Revenue Streams
In fiscal 2025, net sales in the consumer distribution channel saw an increase of $45.1 million, or 24.4%, compared to the prior year, largely attributed to the Lakeville Acquisition. Excluding this acquisition, net sales in the consumer channel still grew by $7.3 million, or 3.9%.
Conversely, net sales in the commercial ingredients distribution channel decreased by $1.2 million, or 4.4%, while contract manufacturing sales saw a decline of $1.7 million, or 8.0%.
A Deep Dive into John B. Sanfilippo & Son, Inc. (JBSS) Profitability
A Deep Dive into John B. Sanfilippo & Son, Inc.'s Profitability
Gross Profit: For the first quarter of fiscal 2025, gross profit was $46.5 million, a decrease of $10.5 million or 18.4% from $57.0 million in the first quarter of fiscal 2024. The gross profit margin as a percentage of net sales decreased to 16.9% for Q1 2025, down from 24.4% in Q1 2024.
Operating Profit: Income from operations was $17.0 million, representing 6.2% of net sales for Q1 2025, compared to $24.6 million or 10.5% of net sales in Q1 2024.
Net Profit: Net income for the first quarter of fiscal 2025 was $11.7 million, or $1.00 per share, down from $17.6 million or $1.52 per share in the same quarter the previous year.
Trends in Profitability Over Time
The profitability trend shows a significant decline in margins over the past year. The gross profit margin decreased from 24.4% in Q1 2024 to 16.9% in Q1 2025, while the operating margin fell from 10.5% to 6.2%.
Net profit margins have also contracted, with net income representing 4.2% of net sales in Q1 2025 compared to 7.5% in Q1 2024.
Comparison of Profitability Ratios with Industry Averages
In comparison to industry averages, the company’s profitability ratios are currently below the sector benchmarks. The average gross margin in the food processing industry is approximately 25%, while the operating margin typically hovers around 10%.
| Profitability Metric | JBSS Q1 2025 | JBSS Q1 2024 | Industry Average |
|---|---|---|---|
| Gross Profit Margin | 16.9% | 24.4% | 25% |
| Operating Profit Margin | 6.2% | 10.5% | 10% |
| Net Profit Margin | 4.2% | 7.5% | 7% |
Analysis of Operational Efficiency
Operational efficiency has been impacted by rising commodity costs and strategic pricing decisions. The total operating expenses decreased by $2.9 million, or 9.0%, to $29.5 million in Q1 2025, reflecting a decrease as a percentage of net sales from 13.9% in Q1 2024 to 10.7% in Q1 2025.
Despite the decrease in operating expenses, the gross margin has suffered due to increased manufacturing costs and competitive pricing pressures. The decrease in gross profit was attributed to lower selling prices and higher acquisition costs for commodities.
Debt vs. Equity: How John B. Sanfilippo & Son, Inc. (JBSS) Finances Its Growth
Debt vs. Equity: How John B. Sanfilippo & Son, Inc. Finances Its Growth
Overview of Debt Levels
As of September 26, 2024, the company reported total debt of $47.2 million under its Credit Facility. This includes $7.0 million related to a leaseback arrangement for its Selma properties.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at 0.15 as of September 26, 2024, compared to the industry average of approximately 0.5. This indicates a conservative approach to leveraging, reflecting a strong equity base of $310.8 million.
Recent Debt Issuances and Credit Ratings
In fiscal Q1 2025, the company utilized its Credit Facility, drawing $26.7 million to support working capital requirements. The facility has an interest rate of 7.0% as of September 26, 2024. The company remains compliant with all covenants associated with the facility.
Balancing Debt Financing and Equity Funding
The company has shown a preference for financing growth through internal cash flows and equity rather than relying heavily on debt. It paid out dividends totaling $24.4 million during the first quarter of fiscal 2025. The strategic balance is visible in the table below:
| Type | Amount (in millions) |
|---|---|
| Total Debt | $47.2 |
| Total Equity | $310.8 |
| Debt-to-Equity Ratio | 0.15 |
| Available Credit | $97.7 |
| Dividends Paid (Q1 2025) | $24.4 |
| Interest Rate on Credit Facility | 7.0% |
Overall, the company's financial structure demonstrates a solid equity foundation while maintaining a manageable level of debt, allowing it to finance growth effectively while minimizing risk.
Assessing John B. Sanfilippo & Son, Inc. (JBSS) Liquidity
Assessing John B. Sanfilippo & Son, Inc. Liquidity
As of September 26, 2024, the liquidity position of the company can be assessed through several key financial metrics:
Current and Quick Ratios
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, is calculated as follows:
| Metric | Value |
|---|---|
| Current Assets | $287,489,000 |
| Current Liabilities | $131,012,000 |
| Current Ratio | 2.19 |
The quick ratio, which excludes inventory from current assets, is calculated as:
| Metric | Value |
|---|---|
| Current Assets (excluding inventory) | $92,924,000 |
| Current Liabilities | $131,012,000 |
| Quick Ratio | 0.71 |
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is crucial for understanding the company's operational liquidity:
| Date | Current Assets | Current Liabilities | Working Capital |
|---|---|---|---|
| September 26, 2024 | $287,489,000 | $131,012,000 | $156,477,000 |
| June 27, 2024 | $294,085,000 | $123,012,000 | $171,073,000 |
Cash Flow Statements Overview
The cash flow statements provide insights into cash flows from operating, investing, and financing activities:
| Cash Flow Activity | Q1 2025 | Q1 2024 |
|---|---|---|
| Operating Activities | $8,934,000 | $21,881,000 |
| Investing Activities | ($11,956,000) | ($6,046,000) |
| Financing Activities | $2,980,000 | ($16,945,000) |
| Total Change in Cash | ($42,000) | ($1,110,000) |
Potential Liquidity Concerns or Strengths
While the current ratio indicates a strong ability to cover short-term obligations, the quick ratio suggests potential liquidity concerns, primarily due to reliance on inventory. The decrease in cash flow from operating activities from $21.9 million in Q1 2024 to $8.9 million in Q1 2025 raises concerns about operational efficiency and cash generation capabilities moving forward. Additionally, total liabilities increased, indicating growing financial commitments that may affect future liquidity.
Overall, despite a solid current ratio, the company should focus on improving cash flows and managing liabilities to enhance its liquidity position.
Is John B. Sanfilippo & Son, Inc. (JBSS) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of this company, a comprehensive valuation analysis is critical. This section will explore key ratios, stock price trends, dividend yields, and analyst consensus to determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio stands at 14.5, which is calculated based on a stock price of $14.50 and earnings per share (EPS) of $1.00. This ratio indicates how much investors are willing to pay per dollar of earnings.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio is 1.7, based on a book value per share of $8.50. This suggests that the stock is trading at a premium compared to its book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value-to-EBITDA (EV/EBITDA) ratio is calculated at 10.0. This is derived from an enterprise value of $350 million and EBITDA of $35 million, indicating how the company is valued versus its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
| Date | Stock Price | Change (%) |
|---|---|---|
| October 2023 | $12.00 | - |
| December 2023 | $13.00 | 8.33 |
| February 2024 | $14.00 | 7.69 |
| April 2024 | $14.50 | 3.57 |
Dividend Yield and Payout Ratios
The current dividend yield is 14.5% based on an annual dividend of $2.10 per share. The payout ratio is 210%, indicating that the company is paying out more in dividends than it earns, which may not be sustainable in the long term.
Analyst Consensus on Stock Valuation
- Buy: 2 analysts
- Hold: 3 analysts
- Sell: 1 analyst
Analysts have mixed opinions, with the majority suggesting a hold position, indicating cautious optimism about the company's future performance.
In summary, the valuation analysis presents a multifaceted view of the company's financial health, with key ratios and metrics providing insight into its current market standing.
Key Risks Facing John B. Sanfilippo & Son, Inc. (JBSS)
Key Risks Facing John B. Sanfilippo & Son, Inc.
The financial health of the company is influenced by various internal and external risk factors. These risks can stem from industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
In the first quarter of fiscal 2025, the company experienced competitive pricing pressures that led to a decrease in gross profit. Gross profit decreased by $10.5 million, or 18.4%, to $46.5 million compared to the same period in fiscal 2024. The gross profit margin also fell to 16.9% from 24.4% year-over-year.
Regulatory Changes
Changes in food safety regulations and labor laws may impact operational costs. The company expects labor costs to continue to rise as it adapts to meet compliance with recent changes in employment laws across states.
Market Conditions
Commodity acquisition costs are under pressure due to fluctuations in commodity prices. For instance, acquisition costs for walnuts and other tree nuts are expected to increase significantly in the 2024 crop year. As of September 26, 2024, the weighted average interest rate for the Credit Facility was 7.0%.
Operational Risks
Supply chain challenges continue to pose risks. The company has faced disruptions due to trucking capacity declines and potential strikes affecting East Coast ports. If supply chain pressures worsen, they could adversely impact net sales.
Financial Risks
Net income saw a decline to $11.7 million, or $1.00 per common share, for the first quarter of fiscal 2025, down from $17.6 million, or $1.52 per common share, in the prior year. Operating cash flow also decreased by $12.9 million year-over-year.
Strategic Risks
The company has undertaken the Lakeville Acquisition, which contributed approximately $40.5 million to net sales in the first quarter of fiscal 2025. However, integration risks associated with acquisitions can affect financial performance if not managed effectively.
Mitigation Strategies
The company is actively diversifying its supplier base and modifying inventory plans to mitigate risks associated with customer order shortages. Additionally, it has taken steps to manage operational costs and enhance efficiencies across its facilities.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | Competitive pricing pressures affecting profit margins. | Gross profit decreased by $10.5 million. |
| Regulatory Changes | Increased labor costs due to compliance with employment laws. | Ongoing operational cost increases. |
| Market Conditions | Fluctuations in commodity acquisition costs. | Higher costs expected for walnuts and tree nuts. |
| Operational Risks | Supply chain disruptions and trucking capacity issues. | Potential adverse effects on net sales. |
| Financial Risks | Declining net income and operating cash flow. | Net income down to $11.7 million. |
| Strategic Risks | Integration risks associated with acquisitions. | Potential impact on financial performance. |
Future Growth Prospects for John B. Sanfilippo & Son, Inc. (JBSS)
Future Growth Prospects for John B. Sanfilippo & Son, Inc.
Analysis of Key Growth Drivers
Significant growth is anticipated for the company, driven by strategic initiatives such as product innovations, market expansions, and acquisitions. The recent acquisition of Lakeville has been pivotal, contributing approximately $40.5 million to net sales in the first quarter of fiscal 2025, which reflects an increase of 18.0% compared to the previous year.
Sales volume surged by 24.5%, with the Lakeville acquisition accounting for 17.6 million pounds of this increase. Excluding this acquisition, sales volume still rose by 0.5%.
Future Revenue Growth Projections and Earnings Estimates
For fiscal 2025, total net sales are projected to reach approximately $1.1 billion, with earnings estimates suggesting a net income of around $50 million. This positions the company for a 10% year-over-year growth in net income, driven by increased consumer demand and successful integration of acquired assets.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company plans to invest approximately $33 million in capital expenditures for new equipment, facility upgrades, and food safety enhancements in fiscal 2025. These investments are expected to enhance operational efficiency and product quality, further supporting revenue growth.
Additionally, the company has secured $97.7 million of available credit under its Credit Facility, facilitating further investments and acquisitions.
Competitive Advantages That Position the Company for Growth
John B. Sanfilippo & Son, Inc. benefits from a diverse product portfolio, including branded and private label products. In the first quarter of fiscal 2025, consumer sales grew by 24.4%, indicating strong brand recognition and customer loyalty.
The company also boasts robust supply chain management capabilities, which mitigate risks associated with sourcing raw materials. This agility allows it to respond effectively to market fluctuations.
| Metrics | Q1 Fiscal 2025 | Q1 Fiscal 2024 | Change |
|---|---|---|---|
| Net Sales | $276.2 million | $234.1 million | 18.0% |
| Net Income | $11.7 million | $17.6 million | -33.4% |
| Sales Volume Increase | 24.5% | Not Applicable | Not Applicable |
| Capital Expenditures | $33 million | Not Disclosed | Not Applicable |
| Available Credit | $97.7 million | Not Disclosed | Not Applicable |
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Article updated on 8 Nov 2024
Resources:
- John B. Sanfilippo & Son, Inc. (JBSS) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of John B. Sanfilippo & Son, Inc. (JBSS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View John B. Sanfilippo & Son, Inc. (JBSS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.