Sanfilippo net income falls to $13.168 million as sales volume holds at 90.5 million pounds
Key Facts
John B. Sanfilippo & Son reported net income fell to $13.168 million in the first quarter of fiscal 2027, from $18.726 million in the year-ago period, while diluted earnings per share were $1.11 versus $1.59. Results varied across distribution channels: total sales volume held steady at 90.5 million pounds, but consumer-channel volume contracted as contract manufacturing and commercial ingredients grew. The weighted-average selling price per pound fell 3.6%, alongside declines in gross profit and margin. The company said volumes of peanuts, walnuts and pecans increased, while volumes of its other major product types declined. The stable overall volume masked divergent performance across channels and products, while prices and sales mix weighed on profitability.
Consumer-channel volume fell 6.7%, with private-label sales in the channel down 6.3%, the company said. It attributed the weakness to declines in nuts and trail mixes, as well as softness in traditional snack bars and consumers' shift to smaller packages. By contrast, commercial-ingredients channel volume rose 3.7%, as sales of peanuts for crushing by peanut-oil manufacturers increased. Contract-manufacturing volume also grew 41.3%, driven by additional snack-nut sales to an existing customer. Chief Executive Jasper Sanfilippo said the company expects to offset a large portion of the lost consumer volume with increased contract manufacturing, but acknowledged that the shift would result in a less favorable sales mix.
The weighted-average selling price per pound fell 3.6%, which the company attributed to a product-mix shift toward lower-priced items and lower prices for walnuts, trail mixes, snacks and peanuts as commodity purchase costs declined. This was partly offset by higher selling prices for pecans and almonds, alongside higher purchase costs for those products. At quarter-end, the average cost per pound of raw nut and dried-fruit input inventory was 20.6% lower year over year. The company said greater availability of peanuts, purchased at lower cost, helped reduce the average, while higher costs for pecans and almonds limited the effect. Lower raw-inventory costs did not prevent gross profit from declining, as they coincided with pressure from prices, product mix and the timing of pricing actions.
Gross profit fell $5.2 million to $48.9 million, and its margin declined to 17.0% of sales, compared with 18.1% in the first quarter of fiscal 2026. The company attributed the pressure to lower prices and the timing of pricing actions for some products, along with a less favorable product mix. It also cited higher freight, equipment repair and maintenance, and rental costs. Cash flow from operating activities fell to $10.6 million from $32.1 million a year earlier. The company attributed the decline in operating cash primarily to changes in working capital, including inventory and lower accrued expenses, as well as lower net income.
Management said it is evaluating its cost structure to improve efficiency, while the company expects to spend about $48 million on capital expenditures in fiscal 2027. The plan includes equipment purchases and upgrades, expanded snack-bar production capacity, maintenance work and food-safety improvements. The company is scheduled to discuss results on a conference call and webcast on Oct. 29, 2026, at 10 a.m. Eastern time, or 9 a.m. Central time. The company's shares closed at $67.11 on Oct. 27, then at $66.34 on Oct. 28, the day results were announced after the market close. The company has placed its capital-spending plan and cost review on the agenda alongside channel performance and sales mix.