How the Wheels Came Off J&J Snack Foods' Bus

Seth Jayson, The Motley Fool
Updated

J&J Snack Foods (NAS: JJSF) reported earnings on Jan. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 24 (Q1), J&J Snack Foods met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased, and earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
J&J Snack Foods notched revenue of $173 million. The three analysts polled by S&P Capital IQ predicted net sales of $174 million. Sales were 11% higher than the prior-year quarter's $156 million

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.29. The three earnings estimates compiled by S&P Capital IQ predicted $0.40 per share. GAAP EPS of $0.29 for Q1 were 24% lower than the prior-year quarter's $0.38 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.9%, 270 basis points worse than the prior-year quarter. Operating margin was 4.9%, 220 basis points worse than the prior-year quarter. Net margin was 3.2%, 140 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $184 million. On the bottom line, the average EPS estimate is $0.49.

Next year's average estimate for revenue is $804 million. The average EPS estimate is $2.85.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 130 members out of 135 rating the stock outperform, and five members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give J&J Snack Foods a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on J&J Snack Foods is hold, with an average price target of $56.33.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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