J&J Snack Foods (JJSF)

Snack food company J&J Snack Foods (NASDAQ:JJSF) announced better-than-expected revenue in Q2 CY2025, with sales up 3.3% year on year to $454.3 million. Its non-GAAP profit of $2 per share was 13.4% above analysts’ consensus estimates.

Company Overview

Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.

As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.

Competitors in the snack food space include PepsiCo (NASDAQ:PEP), Nestle (SWX:NESN), and Utz Brands (NYSE:UTZ).

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $1.6 billion in revenue over the past 12 months, J&J Snack Foods is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.

As you can see below, J&J Snack Foods’s sales grew at a decent 7.1% compounded annual growth rate over the last three years. This shows its offerings generated slightly more demand than the average consumer staples company, a useful starting point for our analysis.

This quarter, J&J Snack Foods reported modest year-on-year revenue growth of 3.3% but beat Wall Street’s estimates by 2%.

Looking ahead, sell-side analysts expect revenue to grow 2.3% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products will face some demand challenges.

J&J Snack Foods’s unit economics are higher than the typical consumer staples company, giving it the flexibility to invest in areas such as marketing and talent to reach more consumers. As you can see below, it averaged a decent 30.4% gross margin over the last two years. That means for every $100 in revenue, $69.59 went towards paying for raw materials, production of goods, transportation, and distribution.

This quarter, J&J Snack Foods’s gross profit margin was 33%, in line with the same quarter last year and exceeding analysts’ estimates by 2.6%. On a wider time horizon, J&J Snack Foods’s full-year margin has been trending down over the past 12 months, decreasing by 1.5 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

J&J Snack Foods’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 7.3% over the last two years. This profitability was mediocre for a consumer staples business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, J&J Snack Foods’s operating margin might fluctuated slightly but has generally stayed the same over the last year. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, J&J Snack Foods generated an operating margin profit margin of 13.3%, up 1.9 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, and administrative overhead.

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

In Q2, J&J Snack Foods reported adjusted EPS at $2, up from $1.98 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects J&J Snack Foods’s full-year EPS of $4.28 to grow 24.3%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

J&J Snack Foods has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 5.4% over the last two years, slightly better than the broader consumer staples sector.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

J&J Snack Foods historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 8%, somewhat low compared to the best consumer staples companies that consistently pump out 20%+.

J&J Snack Foods reported $77.38 million of cash and $167.2 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $183.2 million of EBITDA over the last 12 months, we view J&J Snack Foods’s 0.5× net-debt-to-EBITDA ratio as safe. We also see its $1.92 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We were impressed by how significantly J&J Snack Foods blew past analysts’ EBITDA expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $115.21 immediately following the results.

Updated: November 14, 2025 at 9:59 PM EST

Are you wondering whether to buy J&J Snack Foods or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

J&J Snack Foods isn’t a terrible business, but it isn’t one of our picks. Although its revenue growth was decent over the last three years, it’s expected to deteriorate over the next 12 months and its brand caters to a niche market. And while the company’s EPS growth over the last three years has significantly beat its peer group average, the downside is its cash profitability fell over the last year.

J&J Snack Foods’s EV-to-EBITDA ratio based on the next 12 months is 31.7x. Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $125 on the company (compared to the current share price of $86.55).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.