J & J Snack Foods Reports Q2 2025 Results: Earnings Fall Sharply Amid Soft Beverage and Food Service Sales

J & J Snack Foods reported fiscal Q2 2025 net sales of $356.1 million, down 1% from the prior year. Gross profit declined 12% to $95.7 million, with gross margin dropping to 26.9% from 30.1%. Operating income fell 66% to $6.0 million, and net earnings were $4.8 million, down 64%. Earnings per diluted share dropped from $0.69 to $0.25. Adjusted EPS came in at $0.35, down 58% year over year.
Segment performance was mixed:
• Food Service revenue declined 1.7% to $226.1 million, with a steep 18.7% fall in churro sales due to the end of a large limited-time offer in the prior year. Operating income dropped 84% to $1.2 million.
• Retail Supermarket sales increased 1.8% to $53.8 million. Frozen novelties rose 14.7%, while handhelds fell 28.4% due to capacity issues following a facility fire. Segment operating income fell 46% to $2.8 million.
• Frozen Beverages revenue dipped 0.9% to $76.2 million, with beverage sales down 7.1% due to weak theater attendance. Equipment sales rose 17%. Operating income fell 59% to $2.0 million.
Adjusted EBITDA declined 33% to $26.2 million. Adjusted operating income fell 59% to $8.9 million. The company attributed the weak quarter to soft theater traffic, unfavorable foreign exchange, loss of high-margin volumes from last year, and rising input costs—particularly chocolate.
Despite the tough quarter, J & J Snack Foods expects a stronger second half, citing theater box office projections and additional pricing actions. The company repurchased $5 million in shares and maintains a strong balance sheet with no long-term debt and $48.5 million in cash at quarter-end.