Shares of J&J Snack Foods (JJSF -0.86%), the maker of SuperPretzels and other event snack staples, jumped today after the company delivered a strong second-quarter earnings report.
The stock finished today's session up 16.4%.
J&J Snack Foods shines
J&J reported revenue growth of 6.5% to $359.7 million, beating estimates at $341.1 million.
The company said top-line growth was driven by higher volumes in core products and brands, as well as strong performance with new business in the food service and retail channels. Foodservice sales were up 5.4%, while retail sales jumped 14.1%.
It's beginning to realize the benefit of increasing production capacity in churros and pretzels, which helped margins surge in the quarter.
Gross margin rose 330 basis points to 30.1%, and adjusted operating income jumped 81% to $21.8 million. On the bottom line, adjusted earnings per share rose 95% to $0.84, which was well ahead of the analyst consensus at $0.61.
J&J also opened its third regional distribution channel in the quarter, in Arizona, which will enhance its supply chain capabilities.
CEO Dan Fachner said, "In summary, our second-quarter performance, together with our robust balance sheet and liquidity position, has us well positioned to continue driving growth across our brand portfolio and customer channels."
What's next for J&J
The company didn't give guidance in its press release but said it was poised to build momentum into the second half of fiscal 2024 as it enters the peak summer months.
Though the stock doesn't get a lot of attention, it was a long-term outperformer before the pandemic. After making some key investments, J&J could be set to get back to its winning ways.
