JBSS

Full Year 2026 Financial and Shareholder Outcomes

• Full year 2026 delivered record net sales of $1.2 billion, with diluted earnings per share increasing 4.6% year-over-year to $5.26 per share.
• The company increased its annual dividend by 5.6% to $0.95 per share and declared a $1.05 per share special dividend (a 75% increase from the prior year), marking the 15th consecutive year of returning capital via dividends and 9th consecutive year of annual dividend increases.

2026 Q4 Operational Updates

• Company-wide sales volume returned to growth after five consecutive quarters of decline.
• A voluntary product recall of Southern Style Nuts Hunter Mix occurred due to a contaminated third-party dried milk powder ingredient, generating $2.7 million in recall-related gross profit costs.
• New high-speed bar manufacturing lines at the Elgin facility are progressing toward full operational status, with a robust pipeline of new bar products already developed and presented to customers.

2027 Key Strategic Priorities

• Restore volume in snack nut and trail mix categories: Conduct a consumer study with an external partner to understand how to re-engage value-conscious shoppers, optimize price architecture, promotional effectiveness, and make selective price adjustments without sacrificing margins, leveraging existing health and wellness tailwinds in the nut category.
• Expand bar portfolio and utilize new Elgin manufacturing capacity: Bring the two new high-speed bar lines fully online by Q2 fiscal 2027, capture an estimated $300 million in total long-term growth potential by meeting growing consumer demand for higher protein and higher fiber bar products, and secure new distribution for new offerings.
• Manage cost volatility via productivity improvements: Focus on cost reduction and efficiency across the business, with key initiatives including AI-enabled process enhancements, plant efficiency improvements, SKU rationalization, improved trade spend effectiveness, procurement savings, and end-to-end supply chain optimization.

Leadership Transition

• Outgoing CEO Jeffrey Sanfilippo will step down in October 2026 to assume the role of Executive Chairman, and COO Jasper Sanfilippo will succeed him as CEO.

Management did not issue formal numerical guidance for fiscal 2027, but provided the following forward-looking statements:

• The new high-speed chewy bar line will be fully operational by the end of October 2026 (Q2 fiscal 2027), with the fruit and grain bar line coming online shortly after; first customer shipments from the new lines are expected to begin in Q3 fiscal 2027.
• The full $300 million in potential new growth from the new bar capacity is expected to be realized over a 3 to 5 year timeline.
• Price increases to pass through unexpected Q4 higher transportation and packaging costs will take effect in Q2 fiscal 2027.
• The company expects to deliver long-term sustainable growth, expanded margins, and increased shareholder value through disciplined execution of its strategic plan.

For Q4 2026:

• Consumer Distribution Channel: Net sales volume increased 0.8% overall. Private brand sales rose 2.4% on higher private label nut and trail mix volume, driven by initial shipments to a new grocery retailer and expanded distribution at two existing retailers, partially offset by lost private label business at an online retailer and lower bar volume from a strategic decision to reduce sales to one grocery retailer. Branded sales were negatively impacted by lower recipe nut sales (due to Easter holiday timing) and a 27% drop in Southern Style Nuts shipments from a product recall.
• Commercial Ingredients Channel: Sales volume decreased 5.4%, driven by timing of peanut crush stock sales after elevated volume in the prior quarter.
• Food Service Channel: Sales volume remained flat year-over-year.
• Contract Manufacturing Channel: Sales volume increased 12.6%, driven by higher snack nut sales to a large new customer added in Q2 of the prior fiscal year, partially offset by lower granola sales volume.

For full fiscal 2026:

• Overall net sales increased 6.2% to $1.2 billion, driven by an 8.9% increase in weighted average selling price, partially offset by a 2.5% overall sales volume decrease. Volume decreased in the consumer channel but grew in both commercial ingredients and contract manufacturing channels.

• The company faces ongoing external uncertainties, including unpredictable commodity costs, tariffs, persistent inflation, broader macroeconomic weakness, and continued consumer value consciousness that may pressure volume growth.
• Input, transportation, packaging, energy, labor, and freight costs can be volatile and higher than expected, as seen in Q4 2026, which compressed profitability.
• Unexpected customer deductions and charges can negatively impact quarterly results, and recovery of these costs remains subject to ongoing negotiation.
• Operational inefficiencies associated with onboarding a new large contract manufacturing customer weighed on Q4 2026 profitability.
• Product recall risk from contaminated third-party sourced ingredients can lead to significant unexpected costs, lost sales, and reputational impact.

Q: What drove unexpected Q4 customer charges, and is there potential to recover these costs? / A: Unexpected Q4 customer charges came from unplanned deductions imposed by a major customer, which were outside of the company's control. Management is actively negotiating with the customer to recover these funds. The total unexpected cost from these charges and higher input/transport costs was a couple million dollars.

Q: What is the timeline and progress for the new Elgin bar manufacturing lines, and is there already customer interest? / A: The chewy bar line will be operational by the end of October 2026, with the fruit and grain bar line coming online shortly after. The company has already sent product samples to key customers and received a positive response; first commercial shipments will start in Q3 fiscal 2027. The total $300 million growth opportunity from the new capacity is expected to be realized over 3 to 5 years, with opportunities across private label retail, co-manufacturing for major branded bar players, and club channels including Costco and Sam's Club.

Q: Can the company pass through recent unexpected increases in input and transportation costs to customers, and when will that take effect? / A: Management will pass through these increased costs in the next pricing review, with the full price increases expected to go into effect in Q2 fiscal 2027. The cost increases are primarily driven by fuel-related freight surcharges and elevated resin prices for packaging.

Q: What is the company's strategic focus for the bar business, and how do the new lines expand capabilities? / A: The company is currently focused on developing private label bar offerings to match fast-growing branded protein bar trends, with additional opportunities for co-manufacturing for existing branded bar companies. The new high-speed lines add high-volume production capability to complement existing low-volume capacity, balancing the company's manufacturing portfolio to serve all customer types and sizes, with a specific focus on high-growth, high-margin protein-forward bars.