J&J Snack Foods Corp. Q3 FY2025 earnings call

• Delivered record financial results: Net sales $454.3M (+3.3%), adjusted EBITDA $72M (+1.6%), adjusted EPS $2. - Navigated market challenges including cautious consumer, unfavorable weather, and foreign exchange. - Segment-specific performance: Food Service, Retail, Frozen Beverage details. - Innovations: Pretzel recipe/packaging rollout, Dippin' Dots growth, churro test with QSR, ICEE test with QSR, development of better-for-you products. - Transformation program for enterprise-wide cost savings and efficiency.

Food Service: Sales grew 4.8%, pretzel sales up 12.8% (Bavarian Pretzels up 20%), churro sales down ~13% (impact to taper in Q4), Dippin' Dots sales growing via expanded theater penetration. Retail: Sales declined 7.1% due to frozen novelty and handheld sales decline; frozen novelty down but Dogsters and Dippin' Dots Sundaes growing, Dippin' Dots retail sales ~$2.5M, soft pretzel sales up 3.3%. Frozen Beverage: Sales grew 6.1%, beverage volume down but machine revenue up, foreign exchange headwind, box office sales up 37% in Q3.

• Cautious on Q4 due to consumer backdrop, tariffs, and projected box office decline. - Expect ~10-20% lift in handheld sales in 2026. - Churro test with QSR and ICEE test with QSR could be material for 2026 sales.

• Foreign exchange headwinds impacting beverage sales. - Unfavorable summer weather affecting outdoor venue traffic. - Tariffs threatening margins, exposure to imported raw materials with potential tariff increases.

Q: Modeling for fiscal '26, especially handhelds and churro/Frozen Beverage tests.

A: Expect ~10-20% lift in handhelds in 2026; churro test with QSR and ICEE test with QSR are in progress and could be material, with ICEE programs taking time to roll out but showing positive signs.