J&J Snack Foods is rolling out a transformation programme centred on cost savings, factory consolidation and driving an uplift in profits.
Dan Fachner, the CEO of the US snacks and frozen beverages business, said Project Apollo is expected to deliver $20m in annualised operating income once fully in place in its fiscal 2026 year, which started on 28 September
The first phase mainly revolves around the closure of three production plants located in Holly Ridge, North Carolina; Atlanta, Georgia; and Colton, California, Fachner added as he discussed the company's 2024/2025 financial-year results with analysts this week.
Those numbers showed declines across most metrics in the fourth quarter ended 27 September and a similar performance across the full year, which included a 28% decrease in operating income to $84.3m.
“Production from these facilities will either be consolidated into other facilities or discontinued as part of an ongoing portfolio optimisation,” the CEO of the Super Pretzel and Hola Churros snacks brand owner said.
“The closures reflect the next logical step in the evolution of our manufacturing footprint and are enabled by the investments we have made in our plants to modernise and expand capacity for core products and to build out our regional distribution centres.”
Nasdaq-listed J&J Snack Foods, which supplies the retail and foodservice channels, including movie theatres, expects the factory changes will be mostly completed in 2026 and deliver $15m in annualised cost savings.
Another $3m will come from “various initiatives” to be undertaken in distribution.
A second phase of Project Apollo aims to realise efficiencies in the remaining plant network, modernisation projects and tech systems to “streamline additional corporate processes and sharpen the quality of our data analytics”, Fachner said.
Shawn Munsell, the CFO of the Dippin’ Dots ice cream and ICEE frozen treats brands owner, clarified that J&J Snack Foods saw fourth-quarter operating expenses increase 24% to $118.8m, or 29% of group sales, in relation to the site closures.
That included $24.8m of non-recurring charges, along with non-cash asset write downs and write offs of around $21m. A further $3-5m is expected in the new financial year.
In the fourth quarter, the company’s net sales fell 4% to $410.2m. More than half of the decline reflected a “strong” volume performance in frozen beverages a year earlier in relation to the sequel of the Inside Out movie.
However, pretzels sales grew in both retail and foodservice ahead of new innovation centred on added protein planned for 2026.
Elsewhere, adjusted EBITDA decreased 4% to $57.4m and operating income dropped 71% to $11.5m. Net income and diluted EPS were both down 62% at $11.4m and $0.58, respectively.
“Looking ahead, we have several major commercial programmes launching in fiscal 2026 and our innovation pipeline remains robust, with a significant emphasis on better-for-you attributes,” Fachner said in the results commentary.
“With our strong balance sheet, including $106m in cash and no debt, we are exceptionally well positioned to drive sustainable growth and create long-term value for our shareholders, while navigating the evolving consumer environment.”
Annual net sales dipped 1% to $1.58bn. Operating income decreased 28% to $84.3m. Net earnings fell 24% to $65.6m.
