What Happened?
Shares of snack food company J&J Snack Foods (NASDAQ: JJSF) fell 11.1% in the morning session after the company reported underwhelming fourth quarter results. Its gross margin fell short of Wall Street's estimates, leading to a large EPS shortfall. The company stated that "our performance was impacted by a less favorable sales mix namely related to our bakery and churros business, along with input cost inflation that was not fully covered with price increases." Overall, this was a weak quarter.
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What The Market Is Telling Us
J&J Snack Foods’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for J&J Snack Foods and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 15.2% on the news that the company reported strong first-quarter results, which blew past analysts' EPS expectations. Its revenue outperformed Wall Street's estimates as it produced higher sales volumes than anticipated. Specifically, its new churros product led the way with 24% year-on-year growth and now represents $30.8 million in revenue - a large chunk of this comes from its partnership with the fast-food restaurant chain Subway. Zooming out, we think this was an impressive quarter that should delight shareholders.
J&J Snack Foods is down 19.3% since the beginning of the year, and at $124.07 per share, it is trading 30.7% below its 52-week high of $179.02 from November 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 $750.76.
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