First Quarter Sales At John B. Sanfilippo & Son Grow
John B. Sanfilippo & Son reported strong sales growth in its fiscal year first quarter driven by increased volume across its three distribution channels.
Net sales in the quarter were $276.2 million, an increase of 18% or $42.1 million from the comparable quarter the previous year. The figures include approximately $40.5 million from its acquisition of the Lakeville, Minn., manufacturing facility and snack bars business from TreeHouse Foods.
Excluding the Lakeville acquisition, net sales increased $1.6 million, or 0.7%. This increase was driven by slight increases in sales volume, defined as pounds sold to customers, and the weighted average sales price per pound.
Gross profit decreased by $10.5 million to $46.5 million, which includes the $0.4 million positive impact from the Lakeville acquisition. This decrease was mainly due to lower selling prices caused by competitive pricing pressures and strategic pricing decisions, as well as higher commodity acquisition costs for peanuts and most tree nuts. Additionally, a one-time price concession to a snack bar customer and increased manufacturing spending due to capacity constraints at our Lakeville facility contributed to the overall decrease in gross profit.
“We were encouraged by sales volume increases across all three of our distribution channels in the first quarter, said Jeffrey T. Sanfilippo, the company’s CEO. “The consumer distribution channel delivered its strongest quarterly sales volume growth (excluding the impact from the Lakeville acquisition) in the past eight quarters, as the overall core nut and trail mix category continues to stabilize and recover. We remain optimistic that the strategic pricing actions we initiated last quarter will continue to drive positive momentum in our consumer distribution channel. However, the category may be challenged by increasing commodity costs and corresponding selling price increases in the next few quarters.”
In its private brand division, sales were up 36.1% (3.9% when excluding the impact of the Lakeview acquisition). Growth was mainly due to new peanut butter and nutrition bar distribution, as well as increased volumes of mixed nuts and snack and trail mix at a mass merchandising retailer, which resulted mainly from retail pricing adjustments and rotational distributions. Private brand sales volume, including the Lakeville acquisition, represented approximately 88% of total sales volume in this channel.
Sales were also up in other divisions including Branded (5.4%), Commercial Ingredients Distribution Channel (1.2%), and its Contract Manufacturing Distribution Channel (13.3%).
“We will continue to execute on our strategic plan as we navigate through the upcoming fiscal quarters,” Sanfilippo said. “Moving forward, our main priorities will be to optimize commodity acquisition costs and selling price alignment, drive category growth for snack and trail mix, increase our snack and nutrition bar distribution, and identify additional operational efficiencies. I believe we have the right strategy and a best-in-class team to create long-term shareholder value.”