Sanfilippo EPS jumps 34% in the Q4 | Motley fool

John B. Sanfilippo & Son (JBSS -0.84%)The main processor for nuts and Snack Food Company, released its income in the fourth quarter of the fiscal year 2025 20. August 2025. The biggest news was the chain of dilute earnings (EPS), which increased to $ 1.15 from $ 0.86 in the previous year by $ 33.7%. The overall stay (GAAP) was necessary not to change to $ 269.1 million, only a little less than last year, but the basic volumes of sales fell in the company’s main brands (-19.7%) and private label (-10.7%). Gross profit and margins have fallen in FY2025, mainly due to the higher cost of obtaining nuts. Overall, the quarter showed durable profits, but emphasized permanent challenges in the area of ​​consumer demand and margin strength.

About John B. Sanfilippo & Son and his business model

John B. Sanfilippo & Son is a leading processor and distributor of nuts and related refreshments in the United States. It sells peanuts, almonds, cashew, waluts, pecans and refreshments through brands such as Fisher, Orchard Valley Harvest and Southern Style, as well as private brands and contractual production partnerships.

The main strengths of the company are its vertical integration and sales strategies. Vertical integration means John B. Sanfilippo & Son most of the steps in its supplier chain, from buying raw nuts directly from growers to processing and packaging. This IT approach helps to control quality and cost while spreading its products across retail, commercial ingredients and contracting channels of contracts provides swings resistance on any single market.

High Highlights: Data and Key Development

A quarter revealed remarkable shifts in the company’s operation. The total volume sold has fallen by 5.9% in Q4 FY2025, powered by lower ones requires branded and private products. The volume of consumer channel sales fell by 11.5% in the fourth quarter of FY2025, included in a sharp reduction of 19.7% for branded products. The Valley Orchard Harvest brand was hit by the most difficult and fallen by 42.9%in the fourth quarter of the FY2025, mostly due to the loss of distribution from the main customer. The sale of a private brand also fell by 10.7%, while refreshments dropped by 16.7% in Q4 FY2025 when the increase after last year’s withdrawal disappeared. Other refreshments, such as a mixture and mixed nuts, also noticed weaker demand.

At the same time, commercial components and contractual production led better in Q4 FY2025. The volume of commercial ingredients increased by 8.7% in the fourth quarter of FY2025, powered by higher sales of peanuts and peanut butter to existing customers. Contract production of pink volume 18.7% in the fourth quarter of FY2025, due to increased production of Granola refreshments in the Lakeville device, won in 2024 and a new customer victory. These segments dominated the impact of weaker consumers’ sales, but could not fully compensate for a decline at another time.

The company’s total gross profit dropped by $ 1.2 million and the gross margin slipped to 18.1% of 18.5% in Q4 FY2025. The main driver was the higher cost of acquisitions for almost all types of nuts exceptions to the nuts in Q4 FY2025. Weighted average pounds of nuts increased by 30.4% in the fourth quarter of the FY2025 year -on -year. These rising costs could only be partially compensated by the operational efficiency and production of production. Increased pressure on cost also leads to a jump of $ 58.0 million in stocks and reaches $ 254.6 million in the fourth quarter of FY2025. The reason was the increased price of nuts and larger stocks before the expected seasonal demand.

John B. Sanfilippo & Son made an aggressive reduction in operating expenditures and reduced the costs to $ 6.7 million in the fourth quarter of FY2025. Lower motivational compensation, as well as reduced freight, storage and marketing expenses, managed this savings. Operating expenditure as a percentage of sales dropped to 10.6% in the fourth quarter of FY2025.

Dividends were also increased, with an annual payout increased by 5.9% to $ 0.90 per share and a special $ 0.60 dividend for shared in September 2025, both announced in connection with the results of FY2025.

Business focus and key factors of success

The vertical integration of the company remains a central driver. By acquiring inssell nuts directly from growers, especially for nuts, peanuts and Waluts, can better manage the cost and main offer during the peak period. This approach allows Sanfilippo & Son to pass on a certain increase in customer costs, but also exposes it to risks when the supply chain is volatility or commodity costs increase. During the Q4 FY2025, the higher cost of obtaining nuts was only partially compensated by higher average selling prices and streamlined production.

John B. Sanfilippo & Son composes in three main channels: consumer products sold through retailers, providing ingredients for food manufacturers and contractual production for other brands of snacks. The consumer channel supplies brands and private labels to retailers such as Wal-Mart and Target, and recently recorded volatility of sales volume.

The risk of customer concentration is high, while Wal-Mart and Target Target represents 52% net sales of the company in the fiscal year 2024.

The fluctuations in demand or distribution from these customers have a direct and strong effect on the results.

Meanwhile, channels for the production of folders and contracts now provide important compensation that the consumer requires, has softened.

A quarter in review: Analysis and context

A clear theme in this quarter was the divergence between profit growth and basic business momentum. Despite the strong GAAP EPS growth in the fourth quarter and the Q4 FY2025, the volumes of sales in the categories of basic branded and private labels were cut. Bars, the key, focus because the company gained new production capacity last year, recorded the volumes of decline in the fourth quarter of FY2025, because the recurring demand from the previous year did not repeat. Snack and Trail Mix products have also lost land powered by the end of certain product lines and weaker retail dequest.

The gross margin slipped to 18.1% in Q4 FY2025.

This reflects the impact of nails on commodity inflation, because high prices of nuts and tariffs eat profitability. The company management has pointed to continuing improvement in production efficiency, but acknowledged that it is not enough to fully compensate costs. Year -round results show a similar trend of margins, while gross profit margin (GAAP) dropped from 20.1% to 18.4% in FY2025 compared to FY2024.

The company saved on incentive compensation, transport, storage and marketing, reducing operating expenditures to 10.6% return – Dow from 13.1% last year – in the fourth quarter of FY2025.

The accumulation of stocks was remarkable. At the end of the Q4 FY2025, the inventory value increased by 29.5% to $ 254.6 million. Management assigned this to the high cost of obtaining nuts to the pound and a larger amount of fine goods held before the potential seasonal demand. Although it helps to isolate against the disturbance of the offer, it risked if the demand remains weak or if the prices of nuts retreat and enforce inventory depreciation. The debt has also increased, while the loans of revolving credit facilities and long -term debts increased to $ 72.1 million in FY2025 from $ 26.8 million in FY2024, probably supporting stock strategy and capital expenditure.

Dividends were increased in two ways: regular annual dividends were increased by 5.9% to $ 0.90 per share and a special dividend of $ 0.60 for shared for FY2025. This paycheck reflects confidence in the company’s ability to generate cash.

No major introduction of new products was mentioned in the edition.

The outlook and what to watch

We are looking forward to the fiscal year 2026, the company management did not provide accurate quantitative instructions. Instead, he repeated his intention to make further investments in production, especially in operational efficiency. Management explicitly optimism for “strong dynamics” in the New Year, while recognizing the risks of economic ucretaints, tariffs, volatility of nuts and consumer prices assume changes. No specific goals returned or profitable objectives have been published.

Investors should watch several areas in the upcoming neighborhoods. The levels of inventories and the input costs of the matrix are also crucial, asy could affect profitability if the conditions for transfer to the market. Follow any major changes that relate to significant retail partners, due to the high risk of customer concentration. Finly, follow the implementation of capital that spends expenditures and possible trends in dividend policy, as these suggest how leadership perceives its short -term prospects and cash requirements.

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