Private Brands Help Boost Sanfilippo & Son Q2 Sales
Second quarter sales at John B. Sanfilippo & Son, Inc. were up more than 3% as continued growth in its private label segment helped boost sales.
For the quarter ended December 26, net sales increased 3.4% to $301.1 million. Net income was $13.6 million, down from net income of $19.2 million in the comparable quarter the previous year. Diluted earnings per share decreased 29.3% to $1.16.
According to the company, the increase in net sales is attributed to a 7.1% increase in sales volume (pounds sold to customers) that was partially offset by a 3.4% decrease in the weighted average sales price per pound.
The decrease in the weighted average selling price primarily resulted from higher sales volume of lower priced bars, granola, and private brand recipe nuts (pecans and walnuts). Additionally, strategic pricing decisions and competitive pricing pressures contributed to the overall decrease in weighted average selling prices and contributed to increased sales volume.
“We are pleased to report our largest quarterly sales volume and highest quarterly net sales in our company’s history in the second quarter,” said Jeffrey T. Sanfilippo, company CEO. “This achievement was driven by the second consecutive quarter of sales volume increases across all three of our distribution channels as we execute our Long-Range Plan. Additionally, our bars sales volume increased by approximately 28% over the prior year quarter. We remain encouraged by the sales volume growth across our company and are focused on enhancing profitability through operational efficiencies and optimized pricing strategies.”
Private brand sales volume in the quarter was up 4%, driven by a 27.6% increase in bars volume due to a mass retailer returning to normalized inventory levels.
Additionally, sales volume increases in pecans, walnuts, and snack and trail mix, mainly due to new distribution, contributed to the increase. This was partially offset by a sales volume decrease due to soft consumer demand, as well as downsized pack sizes and the discontinuation of peanut butter, all at the same mass merchandising retailer.
Furthermore, this volume increase was partially offset by soft consumer demand and decreased seasonal nut and trail mix volume at another mass merchandising retailer.
Sales volume in the company’s Branded division was up 3.4%, the Commerical Ingredients Distribution Channel was up 1.4%, and its Contract Manufacturing Distribution Channel was up 55.6%.
Looking ahead, Sanfilippo said the company is working to complete the consolidation of its Elgin and Lakeville distribution operations into our new location in Huntley, Ill. The company is also adding manufacturing equipment to increase production capabilities and increasing efficiency.
