J&J Snack Foods is embarking on a comprehensive transformation program focused on cost savings, factory consolidation, and driving profit growth.
According to CEO Dan Fachner, Project Apollo is anticipated to generate $20 million in annualized operating income by its full implementation during fiscal 2026, which commenced on September 28.
Phase one primarily involves the closure of three production facilities in Holly Ridge, North Carolina; Atlanta, Georgia; and Colton, California. Fachner shared these details while discussing the company’s financial results for 2024/2025 with analysts earlier this week.
These results indicated declines across most metrics in the fourth quarter ending September 27, with similar trends throughout the fiscal year, including a 28% decrease in operating income to $84.3 million.
“Production from these facilities will either be consolidated into other facilities or discontinued as part of an ongoing portfolio optimization,” stated the CEO, who oversees the Super Pretzel and Hola Churros brands.
“The closures represent the next logical step in evolving our manufacturing footprint and rely on recent investments made to modernize plants. These upgrades expand our capacity for core products and enhance our regional distribution centers,” he elaborated.
J&J Snack Foods, which is publicly traded on Nasdaq and serves retail and foodservice sectors—including movie theatres—anticipates that the factory changes will largely conclude by 2026, delivering $15 million in annualized cost savings and an additional $3 million from distribution initiatives.
The second phase of Project Apollo aims to achieve efficiencies across the remaining plant network by modernizing projects and technological systems. This will streamline corporate processes and refine data analytics quality, noted Fachner.
CFO Shawn Munsell indicated that the company’s fourth-quarter operating expenses surged 24% to $118.8 million, accounting for 29% of total sales, mainly due to site closures.
This increase included $24.8 million in non-recurring charges and approximately $21 million in non-cash asset write-downs and write-offs, with an anticipated further $3 to $5 million expected in the new financial year.
In the fourth quarter, net sales decreased 4% to $410.2 million. The decline was notably affected by a strong performance in frozen beverages a year prior, linked to the release of the Inside Out sequel.
Conversely, pretzel sales grew across both retail and foodservice channels ahead of anticipated innovations incorporating added protein planned for 2026.
Additionally, adjusted EBITDA fell 4% to $57.4 million, while operating income plummeted 71% to $11.5 million. Net income and diluted EPS both decreased 62% to $11.4 million and $0.58, respectively.
“Looking ahead, we are set to launch several major commercial programs in fiscal 2026, with a robust innovation pipeline emphasizing better-for-you attributes,” Fachner remarked during the earnings discussion.
“With our strong balance sheet—boasting $106 million in cash and no debt—we are exceptionally positioned to achieve sustainable growth and create long-term value for our shareholders as we navigate the evolving consumer landscape.”
Annual net sales dipped 1% to $1.58 billion, while operating income decreased by 28% to $84.3 million, and net earnings fell 24% to $65.6 million.
