What Happened?
Shares of snack food company J&J Snack Foods (NASDAQ: JJSF) jumped 6% in the afternoon session after the company reported fourth-quarter earnings that beat analyst expectations, even though sales declined.
The company's adjusted earnings were $1.58 per share, easily surpassing the average analyst forecast of $1.24 per share. This positive result came despite a 4% year-over-year drop in net sales to $410.24 million. Reported net income also decreased to $11.38 million from $29.64 million in the same quarter the previous year. The stronger-than-expected profitability was driven by a gross margin of 31.7%, which was better than anticipated. Following the release, one analyst firm, Benchmark, kept its 'Buy' rating on the stock but lowered its price target to $130 from $150.
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What Is The Market Telling Us
J&J Snack Foods’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 12.1% on the news that the company reported weak first quarter 2025 results which saw revenue, gross margin, EPS, and EBITDA all fall short of Wall Street's estimates. A drop in volume across big segments like churros and pretzels, dragged sales and caused a sharp fall in gross profit. Also, slower theater traffic and the end of a one-time churro promo hurt sales, while price hikes didn't land fast enough to offset rising costs. Overall, this was a weaker quarter.
J&J Snack Foods is down 42.1% since the beginning of the year, and at $89.00 per share, it is trading 49% below its 52-week high of $174.56 from December 2024. Investors who bought $1,000 worth of J&J Snack Foods’s shares 5 years ago would now be looking at an investment worth $559.65.
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