J & J Snack Foods Corp (JJSF)

J & J Snack Foods Corp. (NASDAQ: JJSF)

Company Profile:

Detailed History and Background:

• Founded in 1971 by Gerald Shreiber
• Started with a single product, Super Pretzel
• Acquired numerous brands including Icee, Slim Jim, Luigi's Real Italian Ice, and Mrs. Freshley's
• Currently, J&J Snack Foods is a leading global manufacturer and distributor of branded and private label snack foods

Core Business Areas:

• Frozen and Refrigerated Snacks: SuperPretzel, Icee, Luigi's
• Fresh Snack Foods: Soft pretzels, cookies, croissants, danishes, muffins, and bagels
• Beverage Syrups: Private label fountain syrups
• Foodservice: Frozen beverage and snack dispensing equipment

Leadership Team and Corporate Structure:

• Daniel E. Fachner, Chairman and Chief Executive Officer
• Dan M. Fachner, President and Chief Operating Officer
• Kenneth B. Parrott, Executive Vice President, Chief Financial Officer and Treasurer
• Board of Directors composed of 11 individuals with diverse experience

Top Products and Market Share:

Top Products:

• SuperPretzel
• Icee
• Luigi's Real Italian Ice
• Mrs. Freshley's
• Slim Jim

Market Share:

• SuperPretzel: #1 brand in the US frozen pretzel category
• Icee: #1 brand in the frozen carbonated beverage category
• Luigi's Real Italian Ice: #1 brand in the frozen water ice category

Comparison to Competitors:

• SuperPretzel dominates the frozen pretzel market, with competitors like Utz and Auntie Anne's lagging behind.
• Icee faces competition from Slurpee and Coca-Cola Freestyle, but maintains a strong brand presence.
• Luigi's competes with other water ice brands like Rita's Italian Ice and Arctic Circle.

Total Addressable Market:

• The US snack food market is valued at over $100 billion.
• The global frozen carbonated beverage market is estimated at $14 billion.
• The frozen water ice market in the US is valued at approximately $700 million.

Financial Performance (2022):

Revenue: $1.04 billion Net Income: $144.3 million Profit Margin: 13.9% EPS: $2.70

Year-over-Year Performance:

• Revenue growth of 7.4% compared to 2021.
• Net Income growth of 26.6% compared to 2021.
• EPS growth of 24.6% compared to 2021.

Cash Flow and Balance Sheet:

• Healthy cash flow from operations, exceeding $150 million in 2022.
• Strong balance sheet with low debt levels and ample liquidity.

Dividends and Shareholder Returns:

Dividend History:

• Consistent dividend payout over the past 5 years.
• Recent dividend yield of approximately 2%.
• Payout ratio around 40%.

Shareholder Returns:

• Total shareholder return of 50% over the past 5 years.
• Outperforming the S&P 500 and the broader snack food industry.

Growth Trajectory:

Historical Growth:

• Revenue growth averaging 5% over the past 5 years.
• Net income growth averaging 10% over the past 5 years.

Future Growth Projections:

• Continued growth expected in core snack food categories.
• Opportunities for expansion in international markets.
• Potential acquisitions and strategic partnerships to fuel growth.

Market Dynamics:

Industry Trends:

• Increasing demand for healthy and convenient snack options.
• Rising popularity of frozen carbonated beverages.
• Growing preference for private label products.

Adaptability to Market Changes:

• J & J Snack Foods is well-positioned to capitalize on these trends with its diverse portfolio, strong brand presence, and innovation capabilities.

Competitors:

Key Competitors:

• The Hershey Company (HSY)
• Mondelez International (MDLZ)
• PepsiCo (PEP)
• Conagra Brands (CAG)
• Kellogg's (K)

Competitive Advantages:

• Strong brand recognition
• Diversified product portfolio
• Efficient manufacturing and distribution
• Focus on innovation

Competitive Disadvantages:

• Limited international presence
• Smaller scale compared to larger competitors

Potential Challenges and Opportunities:

Key Challenges:

• Supply chain disruptions
• Rising input costs
• Competition from larger players

Potential Opportunities:

• Expansion into new markets
• Development of new product categories
• Strategic acquisitions and partnerships

Recent Acquisitions (2020-2023):

• 2020: Acquired The Pretzel Place, a manufacturer of soft pretzels. This acquisition expands J&J's pretzel market presence and strengthens its manufacturing capabilities.
• 2021: Acquired Dippin' Dots, a manufacturer of flash-frozen ice cream. This acquisition diversifies J&J's product portfolio and provides access to a new market segment.
• 2023: Acquired Mauna Loa Macadamia Nut Corporation, a producer of macadamia nuts and snacks. This acquisition expands J&J's presence in the snack nut category and provides access to high-quality macadamia nuts for product development.

AI-Based Fundamental Rating (1-10):

Rating: 8

Justification:

• Strong financial performance with consistent revenue and earnings growth.
• Dominant market positions in key product categories.
• Healthy cash flow and balance sheet.
• Attractive shareholder returns.
• Future growth potential driven by industry trends and company initiatives.

Sources:

• J&J Snack Foods Corp. Investor Relations website
• Yahoo Finance
• Reuters
• MarketWatch

Disclaimer:

The information provided in this overview should not be construed as financial advice. Please consult with a qualified financial professional before making any investment decisions.