SANFILIPPO JOHN B & SON INC

Previous wording

References herein to the second quarter of fiscal 2025 and fiscal 2024 are to the quarters ended December 26, 2024 and December 28, 2023, respectively.

Current wording

References herein to the third quarter of fiscal 2025 and fiscal 2024 are to the quarters ended March 27, 2025 and March 28, 2024, respectively.

Previous wording

References herein to the first three quarters or first twenty-six weeks of fiscal 2025 and fiscal 2024 are to the twenty-six weeks ended December 26, 2024 and December 28, 2023, respectively.

Current wording

References herein to the first three quarters or first thirty-nine weeks of fiscal 2025 and fiscal 2024 are to the thirty-nine weeks ended March 27, 2025 and March 28, 2024, respectively.

Previous wording

Our Long-Range Plan defines our future growth priorities and focuses on growing our private brand business across key customers, as well as transforming Fisher, Orchard Valley Harvestand Squirrel Brand into leading brands while increasing distribution and diversifying our portfolio into high growth snacking segments. We will execute on our Long-Range Plan by providing our private brand customers value-added solutions and innovative products based on our extensive industry and consumer expertise, such as our newly developed product line of private brand nutrition bars. We will focus on growing our branded business by reaching new consumers via product expansion and packaging innovation, expanding distribution across current and alternative channels, diversifying our product offerings and focusing on new ways for consumers to buy our products, including sales via e-commerce platforms. Our Long-Range Plan also contemplates increasing our sales through product innovation and targeted, opportunistic acquisitions, such as the acquisition of certain snack bar assets including inventory, product formulas, a manufacturing facility and related equipment located in Lakeville, Minnesota, (the “Lakeville Acquisition”) which we completed the first day of the second quarter of fiscal 2024. The Lakeville Acquisition expanded our ability to produce private brand snack bars, increased our overall production capabilities and allows us to provide our private brand customers with a complete snack bar portfolio. In addition, we also acquired additional snack bar production assets in the first quarter of fiscal 2025 that will expand our manufacturing capacity and support further growth in our bar business. Beginning in the current fiscal quarter and continuing into the next fiscal year, we plan to allocate significant additional capital to purchase new equipment (and incur related expenses) in order to further expand our production capabilities, increase our efficiency and enhance our product offerings for our customers.

Current wording

Our Long-Range Plan defines our future growth priorities and focuses on growing our private brand business across key customers, as well as transforming Fisher, Orchard Valley Harvestand Squirrel Brand into leading brands while increasing distribution and diversifying our portfolio into high growth snacking segments. We will execute on our Long-Range Plan by providing our private brand customers value-added solutions and innovative products based on our extensive industry and consumer expertise, such as our newly developed product line of private brand nutrition bars. We will focus on growing our branded business by reaching new consumers via product expansion and packaging innovation, expanding distribution across current and alternative channels, diversifying our product offerings and focusing on new ways for consumers to buy our products, including sales via e-commerce platforms. Our Long-Range Plan also contemplates increasing our sales through product innovation and targeted, opportunistic acquisitions, such as the acquisition of certain snack bar assets including inventory, product formulas, a manufacturing facility and related equipment located in Lakeville, Minnesota, (the “Lakeville Acquisition”) which we completed the first day of the second quarter of fiscal 2024. The Lakeville Acquisition expanded our ability to produce private brand snack bars, increased our overall production capabilities and allows us to provide our private brand customers with a complete snack bar portfolio. In addition, we also acquired additional snack bar production assets in the first quarter of fiscal 2025 that will expand our manufacturing capacity and support further growth in our bar business. Beginning in the second quarter of fiscal 2025 and continuing into the next fiscal year, we plan to invest significant additional capital to purchase new equipment and make infrastructure improvements (and incur related expenses) in order to further expand our production capabilities, increase our efficiency and enhance our product offerings for our customers.

Previous wording

We will continue to focus our promotional and advertising activity to invest in our brands to achieve sales volume growth. We intend to execute on an omnichannel approach to win in key categories including recipe nuts, snack nuts, trail mix and other snacking categories. We continue to see e-commerce sales volume growth across our branded portfolio and anticipate taking various actions with the goal of maintaining that growth across a variety of established e-commerce platforms. We continue to face the ongoing challenges and/or regulations specific to our business, such as food safety and regulatory matters, the maintenance and growth of our customer base and overall category growth for branded and private brand products and varying consumer demand for nut and nut-related products and snack bars in a challenging snack food environment.

Current wording

We focus our promotional and advertising activity to invest in our brands to achieve sales volume growth. We are executing an omnichannel approach to win in key categories including recipe nuts, snack nuts and trail mix. We continue to see e-commerce sales volume growth across our branded portfolio and anticipate taking various actions with the goal of maintaining that growth across a variety of established e-commerce platforms for our consumer channel. We continue to face the ongoing challenges and/or regulations specific to our business, such as food safety and regulatory matters, the maintenance and growth of our customer base and overall category growth for branded and private brand products and varying, decreasing or shifting consumer demand for snack nuts, trail mix and snack bars in a challenging snack food environment and against an uncertain macroeconomic backdrop.

Previous wording

We face a number of challenges in the future, which include the impacts of higher prices in food, in part due to underlying commodity acquisition costs, uncertainty over interest rates that may negatively impact economic growth, consumers reducing their snack purchases, including branded nut products or products with lower gross profit margin, potential for economic downturn in the markets in which we operate and supply chain challenges. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase in the 2025 fiscal year and beyond.

Current wording

We face a number of challenges in the future, which include the impacts of higher prices in food, in part due to increasing underlying commodity acquisition costs and tariffs (actual, pending implementation or threatened) by the U.S. government or other governments. We continue to see uncertainty over interest rates that may negatively impact economic growth, consumers reducing their branded and private label snack purchases, including snack nuts, trail mix and snack bars, intense competition in the snack food industry and potential for economic downturn in the markets in which we operate and supply chain challenges. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase in the remainder of the 2025 fiscal year and beyond.

Previous wording

We face changing industry trends as consumers' purchasing preferences evolve. We have continued to see higher selling prices at retail, with price increases starting to moderate for some products, including snack nuts and trail mix, and decrease for other products. While moderated, these higher prices across our categories and the broader food market, coupled with a potential economic downturn and tightening of consumer finances due to reduced government support through programs such as SNAP or a variety of other macroeconomic reasons, are causing consumers to purchase fewer snack products. We have seen sales volume stabilize for snack nuts, trail mix and snack bars while sales volume for recipe nuts has continued to decline given higher prices. Consumers continue to shift their preferences to private brands or lower priced nuts or snack bars or purchase snack products outside the snack nut, trail mix and snack bar categories. We are also seeing signs of consumers shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, the increased use and/or prevalence of certain weight loss drugs, which may suppress a person’s appetite and/or impact a person's preferences, may impact the demand or consumption patterns for certain of our products. We have responded by focusing on our strengths, including our knowledge of the snack and trail nut categories, product innovation and judicious use of trade spending and pricing actions.

Current wording

We face changing industry trends as consumers' purchasing preferences evolve. We continue to see higher selling prices at retail across snack nuts and trail mix, with price increases starting in January 2025 driven by higher commodity costs. These higher prices across our categories and the broader market, coupled with a potential economic downturn and tightening of consumer finances due to reduced government support through programs such as SNAP or a variety of other macroeconomic reasons, are causing consumers to purchase fewer branded and private label snack products. This declining demand is leading to sales volume declines for snack nuts, recipe nuts, trail mix and snack bars both for the Company and across the snack food industry. Consumers continue to shift their preferences to private brands or lower priced nuts or snack bars or purchase snack products outside the snack nut, trail mix and snack bar categories. We have also seen consumers shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, the increased use and/or prevalence of certain weight loss drugs, which may suppress a person’s appetite and/or impact a person's preferences, may impact the demand or consumption patterns of our products. We have responded by focusing on our strengths, including our knowledge of the snack nut and trail mix and snack bar categories, product innovation and judicious use of trade spending and pricing actions.

Previous wording

Global supply chain pressures have eased compared to fiscal 2024, but pockets of challenges, delays and extended lead-times still exist. While we do not have direct exposure to suppliers in Russia, Ukraine or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs. Overall packaging and ingredient inflation appears to be moderating or leveling off in the 2025 fiscal year. With the change in the presidential administration, there is a risk of new tariffs being levied on products we purchase from foreign countries such as China, Canada and Mexico. These tariffs could lead to an increase in the cost of certain raw materials we use in our business and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers.

Current wording

Global supply chain pressures have eased compared to fiscal 2024, but pockets of challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to be moderating or leveling off in the 2025 fiscal year; however, the U.S. government has implemented and announced new import tariffs on products from foreign countries such as China, Canada and Mexico, along with specific tariffs on steel and aluminum products. Approximately 2% of our material costs, primarily pepitas and pine nuts, are currently sourced from China and are subject (at present) to a combined 170% tariff. These tariffs, or tariffs imposed on imports from other countries, will lead to an increase in the cost of certain raw materials we use in our business and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers. While we do not have direct exposure to suppliers in Russia, Ukraine or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs. In addition, the ultimate impact of tariffs may be difficult to predict as their amount and duration is uncertain, making our planning process more difficult, and the threat of tariffs can also have adverse implications to our business and the business of our suppliers and customers.

Previous wording

Trucking capacity continues to decline, potentially leading to further instability in the transportation industry in the 2025 fiscal year. While indicators suggest transportation prices are stabilizing, the overall transportation environment remains unpredictable.

Current wording

Trucking capacity continues to slowly decline, potentially leading to further instability in the transportation industry in the remainder of 2025 fiscal year. While indicators suggest transportation prices are stabilizing, the overall transportation environment remains unpredictable. Additionally, fuel prices have been unpredictable in fiscal 2025 and may vary depending on the level of economic activity in the areas where we ship and receive shipments.

Previous wording

Our most significant ingredient requirements include cocoa products, dried fruits, sweeteners, vegetable oils, oats, flour and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, other market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), and on-going political instability and other factors beyond our control.

Current wording

Our most significant ingredient requirements include cocoa products, dried fruits, sweeteners, vegetable oils, oats, flour and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, other market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), and ongoing political instability and other factors beyond our control.

Previous wording

We have remained agile by proactively identifying risks, modifying inventory plans and diversifying our supplier base to mitigate risk of customer order shortages and maintain our supply chain. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainty and intend to take steps to further mitigate impacts to our supply chain as they develop. If these supply chain pressures continue or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations in the remainder of fiscal 2025. Furthermore, record cocoa prices have been fueled by a third-consecutive short crop in calendar 2024. Cocoa market prices have continued to be volatile and have reached new highs. Cocoa production was down significantly in Ivory Coast and Ghana due to a combination of inclement weather, crop disease and lack of farm investment. Despite higher cocoa prices, consumption remained strong, leading to predictions of a large production deficit. Additionally, as costs increase due to these circumstances or due to overall inflationary pressures, there is a further risk of our not being able to pass (in part or in full) such potential cost increases on to our customers or in a timely manner. If we cannot align costs with prices for our products, our financial performance could be adversely impacted.

Current wording

We have remained agile by proactively identifying risks, modifying inventory plans and diversifying our supplier base to mitigate risk of customer order shortages and maintain our supply chain. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainties and intend to take steps to further mitigate impacts to our supply chain as they develop. If these supply chain pressures continue or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations in the remainder of fiscal 2025 and potentially into fiscal 2026.

Previous wording

Sales volume, measured as pounds sold to customers, increased 7.1% compared to the second quarter of fiscal 2024. Sales volume for the first twenty-six weeks of fiscal 2025 increased 14.9% compared to the first twenty-six weeks of fiscal 2024.

Current wording

Sales volume, measured as pounds sold to customers, decreased 7.9% compared to the third quarter of fiscal 2024. Sales volume for the first thirty-nine weeks of fiscal 2025 increased 6.7% compared to the first thirty-nine weeks of fiscal 2024.

Previous wording

Gross profit decreased $5.7 million, and our gross profit margin, as a percentage of net sales, decreased to 17.4% for the second quarter of fiscal 2025 compared to 19.9% for the second quarter of fiscal 2024. Gross profit decreased $16.2 million, and our gross profit margin decreased to 17.1% from 21.9% for the first twenty-six weeks of fiscal 2025 compared to the first twenty-six weeks of fiscal 2024.

Current wording

Gross profit increased $6.7 million, and our gross profit margin, as a percentage of net sales, increased to 21.4% for the third quarter of fiscal 2025 compared to 18.1% for the third quarter of fiscal 2024. Gross profit decreased $9.5 million, and our gross profit margin decreased to 18.5% from 20.6% for the first thirty-nine weeks of fiscal 2025 compared to the first thirty-nine weeks of fiscal 2024.

Previous wording

Total operating expenses for the second quarter of fiscal 2025 increased by $2.5 million, or 8.4%, compared to the second quarter of fiscal 2024. As a percentage of net sales, total operating expenses in the second quarter of fiscal 2025 increased to 10.9% from 10.4% for the second quarter of fiscal 2024. Total operating expenses for the first twenty-six weeks of fiscal 2025 decreased by $0.4 million, or 0.6%, compared to the first twenty-six weeks of fiscal 2024. As a percentage of net sales, total operating expenses for the first twenty-six weeks of fiscal 2025 decreased to 10.8% from 12.0% for the first twenty-six weeks of fiscal 2024.

Current wording

Total operating expenses for the third quarter of fiscal 2025 decreased by $3.1 million, or 10.2%, compared to the third quarter of fiscal 2024. As a percentage of net sales, total operating expenses in the third quarter of fiscal 2025 decreased to 10.6% from 11.3% for the third quarter of fiscal 2024. Total operating expenses for the first thirty-nine weeks of fiscal 2025 decreased by $3.5 million, or 3.7%, compared to the first thirty-nine weeks of fiscal 2024. As a percentage of net sales, total operating expenses for the first thirty-nine weeks of fiscal 2025 decreased to 10.8% from 11.7% for the first thirty-nine weeks of fiscal 2024.

Previous wording

The total value of inventories on hand at the end of the second quarter of fiscal 2025 increased $8.5 million, or 4.3%, in comparison to the total value of inventories on hand at the end of the second quarter of fiscal 2024.

Current wording

The total value of inventories on hand at the end of the third quarter of fiscal 2025 increased $47.1 million, or 22.4%, in comparison to the total value of inventories on hand at the end of the third quarter of fiscal 2024.

Previous wording

We have seen acquisition costs for walnuts increase significantly and cashew and pecan costs increase modestly, and we have seen acquisition costs for peanuts slightly decrease in the 2024 crop year (which falls into our current 2025 fiscal year). We completed procurement of inshell walnuts during the first half of fiscal 2025. During the third quarter, we will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual final liability will be determined during the third quarter of fiscal 2025 and will be recognized in our financial results at that time.

Current wording

We have seen acquisition costs for walnuts increase significantly and all other tree nut and peanut costs increase modestly in the 2024 crop year (which falls into our current 2025 fiscal year). We completed procurement of inshell walnuts during the first half of fiscal 2025 and the final total payments due to our walnut growers were determined in the current quarter. The final prices paid, and remaining to be paid to the walnut growers, were based upon current market prices and other factors, such as crop size and export demand. A large majority of payments to walnut growers were completed in the third quarter of fiscal 2025. Remaining amounts to be paid to walnut growers as of March 27, 2025 are final and are not subject to revision. We increased our walnut grower liability by approximately $1.2 million during the third quarter of fiscal 2025, as the final payments due to walnut growers are slightly more than the amounts estimated at the end of the second quarter. This increase is insignificant compared to our total inshell walnut procurement costs for the year, and the portion of this adjustment to cost of sales was immaterial to our results of operations.

Previous wording

In the second quarter of fiscal 2025, our net sales increased 3.4% to $301.1 million compared to net sales of $291.2 million for the second quarter of fiscal 2024. Sales volume, which is defined as pounds sold to customers, increased 7.1%. The weighted average sales price per pound decreased 3.4% primarily due to higher sales volume of lower priced snack bars, granola and private brand recipe nuts (pecans and walnuts). Additionally, strategic pricing decisions and competitive pricing pressures contributed to the overall decrease in weighted average selling price.

Current wording

In the third quarter of fiscal 2025, our net sales decreased 4.0% to $260.9 million compared to net sales of $271.9 million for the third quarter of fiscal 2024. Sales volume, which is defined as pounds sold to customers, decreased 7.9%. The weighted average sales price per pound increased 4.2% primarily due to higher commodity acquisition costs for all major tree nuts

Previous wording

For the first twenty-six weeks of fiscal 2025 our net sales were $577.3 million, an increase of $51.9 million, or 9.9%, compared to the same period of fiscal 2024 primarily due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales increased 2.2% to $536.8 million, which was primarily attributable to a 4.1% increase in sales volume which was offset by a 1.9% decrease in weighted average selling price per pound.

Current wording

For the first thirty-nine weeks of fiscal 2025 our net sales were $838.2 million, an increase of $41.0 million, or 5.1%, compared to the same period of fiscal 2024 primarily due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales remained relatively unchanged rising from $797.2 million to $797.7 million and sales volume also remained relatively unchanged.

Previous wording

Sales of branded products were approximately 21% and 22% of total consumer sales during the second quarter of fiscal 2025 and fiscal 2024, respectively. Fisher branded products were approximately 72% and 73% of branded sales during the second quarter of fiscal 2025 and fiscal 2024, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Current wording

Sales of branded products were approximately 13% and 14% of total consumer sales during the third quarter of fiscal 2025 and fiscal 2024, respectively. Fisher branded products were approximately 56% and 54% of branded sales during the third quarter of fiscal 2025 and fiscal 2024, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Previous wording

Sales of branded products were approximately 19% and 21% of total consumer sales during the first twenty-six weeks of fiscal 2025 and fiscal 2024, respectively. Fisher branded products were approximately 66% and 69% of branded sales during the first twenty-six weeks of fiscal 2025 and fiscal 2024, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Current wording

Sales of branded products were approximately 17% and 19% of total consumer sales during the first thirty-nine weeks of fiscal 2025 and fiscal 2024, respectively. Fisher branded products were approximately 63% and 65% of branded sales during the first thirty-nine weeks of fiscal 2025 and fiscal 2024, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Previous wording

In the first twenty-six weeks of fiscal 2025, net sales in the consumer distribution channel increased $55.0 million, or 12.9%, and sales volume increased 15.0% compared to the same period of fiscal 2024 due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the consumer distribution channel increased $17.3 million, or 4.1%, and sales volume increased 3.1%. Private brand sales volume increased 18.0% largely due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, private brand sales volume increased 3.9% due to growth in bars from a mass merchandising retailer returning to normalized inventory levels. These increases were partially offset by soft consumer demand at another mass merchandising retailer, in addition to decreased seasonal nut and trail mix volume.

Current wording

In the first thirty-nine weeks of fiscal 2025, net sales in the consumer distribution channel increased $43.8 million, or 6.7%, and sales volume increased 6.1% compared to the same period of fiscal 2024 due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the consumer distribution channel increased $6.0 million, or 0.9%, and sales volume decreased 1.4%. This sales volume decrease was due to soft consumer demand and decreased seasonal nut and trail mix volume at a mass merchandising retailer. Additionally, decreases in almonds and peanuts caused by increased retail prices and the discontinuance of peanut butter at another mass merchandising retailer. However, these declines were partially mitigated by increased sales of snack nuts and trail mix, walnuts and pecans at the same retailer. Private brand sales volume increased 8.0% largely due to the Lakeville Acquisition. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, private brand sales volume decreased 0.7% due to the same reasons cited previously.

Previous wording

Net sales in the commercial ingredients distribution channel decreased $1.1 million, or 4.1%, and sales volume increased 1.4% in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. The sales volume increase was primarily driven by higher sales of peanut crushing stock to peanut oil processors and higher sales from new distribution to a foodservice customer, partially offset by lost business to another customer.

Current wording

Net sales in the commercial ingredients distribution channel decreased $2.3 million, or 8.6%, and sales volume decreased 8.3% in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The sales volume decrease was mainly driven by competitive pricing pressures and decreased foodservice peanut butter sales.

Previous wording

In the first twenty-six weeks of fiscal 2025, net sales in the commercial ingredients distribution channel decreased $2.4 million, or 4.2%, and sales volume increased 1.3% compared to the same period of fiscal 2024. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the commercial ingredients channel decreased $2.6 million, or 4.7%, and sales volume increased 0.4%. The net sales decrease was due to lost business at a customer and the sales volume increase was attributable to the same reasons cited in the quarterly comparison.

Current wording

In the first thirty-nine weeks of fiscal 2025, net sales in the commercial ingredients distribution channel decreased $4.7 million, or 5.6%, and sales volume decreased 2.0% compared to the same period of fiscal 2024. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the commercial ingredients channel decreased $5.0 million, or 6.0%, and sales volume decreased 2.6%. The sales volume decrease was due to competitive pricing pressures. This decrease was partially offset by higher sales from new distribution to a foodservice customer and higher sales of peanut crushing stock to peanut oil processors.

Previous wording

Net sales in the contract manufacturing distribution channel increased $1.0 million, or 4.4%, and sales volume increased 55.6% in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. The increase in sales volume was due to increased granola volume processed in our Lakeville facility. This increase was partially offset by reduced peanut and cashews sales volume to a major customer due to soft consumer demand.

Current wording

Net sales in the contract manufacturing distribution channel increased $2.6 million, or 13.6%, and sales volume increased 6.0% in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The increase in sales volume was due to increased granola volume processed in our Lakeville facility. Sales to a new customer and an opportunistic sale to a current customer contributed to the overall increase. These gains were significantly offset by reduced peanut sales volume to a major customer due to soft consumer demand.

Previous wording

In the first twenty-six weeks of fiscal 2025, net sales in the contract manufacturing distribution channel decreased $0.8 million, or 1.7%, and sales volume increased 34.4% compared to the same period of fiscal 2024. The sales volume increase was due to increased granola volume. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the contract manufacturing channel decreased $3.1 million, or 7.3%, and sales volume increased 17.8% for the reason cited in the quarterly comparison.

Current wording

In the first thirty-nine weeks of fiscal 2025, net sales in the contract manufacturing distribution channel increased $1.8 million, or 2.9%, and sales volume increased 25.2% compared to the same period of fiscal 2024. The sales volume increase was due to increased granola volume. Excluding the fiscal 2025 first quarter's impact of the Lakeville Acquisition, net sales in the contract manufacturing channel decreased $0.6 million, or 1.0%, and sales volume increased 14.0% for the reasons cited in the quarterly comparison.

Previous wording

Selling expenses for the second quarter of fiscal 2025 were $22.6 million, an increase of $1.6 million, or 7.7%, from the second quarter of fiscal 2024. The increase was driven by a $1.0 million increase in rent expense related to our new Huntley facility lease, a $0.9 million increase in freight expense and a $0.6 million increase in compensation-related expenses. These increases were partially offset by a $0.6 million decrease in incentive compensation expense.

Current wording

Selling expenses for the third quarter of fiscal 2025 were $18.6 million, a slight decrease of 0.1% from the third quarter of fiscal 2024. The decrease was driven by a $1.5 million decrease in incentive compensation expense which was largely offset by a $1.4 million increase in rent expense related to our new Huntley, IL facility lease.

Previous wording

Total operating expenses for the first twenty-six weeks of fiscal 2025 decreased by $0.4 million, or 0.6%, to $62.4 million. Operating expenses decreased to 10.8% of net sales for the first twenty-six weeks of fiscal 2025 compared to 12.0% of net sales for the first twenty-six weeks of fiscal 2024. The decrease in total operating expenses is net of the $2.2 million net gain on bargain purchase that occurred in the second quarter of fiscal 2024 due to the Lakeville Acquisition.

Current wording

Total operating expenses for the first thirty-nine weeks of fiscal 2025 decreased by $3.5 million, or 3.7%, to $90.1 million. Operating expenses decreased to 10.8% of net sales for the first thirty-nine weeks of fiscal 2025 compared to 11.7% of net sales for the first thirty-nine weeks of fiscal 2024. The decrease in total operating expenses is net of the $2.2 million net gain on bargain purchase that occurred in the second quarter of fiscal 2024 due to the Lakeville Acquisition.

Previous wording

Selling expenses for the first twenty-six weeks of fiscal 2025 were $42.5 million, a decrease of $0.5 million, or 1.2%, from the first twenty-six weeks of fiscal 2024. The decrease was driven primarily by a $4.0 million decrease in advertising and consumer insight research expense, and a $1.5 million decrease in incentive compensation expense. These decreases were largely offset by a $2.0 million increase in rent expense related to our new Huntley facility lease, a $1.8 million increase in freight expense due to an increase in delivered sales pounds, and a $1.1 million increase in compensation-related expenses.

Current wording

Selling expenses for the first thirty-nine weeks of fiscal 2025 were $61.1 million, a decrease of $0.6 million, or 0.9%, from the first thirty-nine weeks of fiscal 2024. The decrease was driven primarily by a $4.0 million decrease in advertising and consumer insight research expense and a $3.1 million decrease in incentive compensation expense. These decreases were largely offset by a $3.4 million increase in rent expense related to our new Huntley, IL facility lease, a $1.5 million increase in freight expense due to an increase in delivered sales pounds, and a $1.7 million increase in compensation-related expenses.

Previous wording

Due to the factors discussed above, income from operations was $19.4 million, or 6.4% of net sales, for the second quarter of fiscal 2025 compared to $27.6 million, or 9.5% of net sales, for the second quarter of fiscal 2024.

Current wording

Due to the factors discussed above, income from operations was $28.2 million, or 10.8% of net sales, for the third quarter of fiscal 2025 compared to $18.4 million, or 6.7% of net sales, for the third quarter of fiscal 2024.

Previous wording

Due to the factors discussed above, income from operations was $36.4 million, or 6.3% of net sales, for the first twenty-six weeks of fiscal 2025 compared to $52.2 million, or 9.9% of net sales, for the first twenty-six weeks of fiscal 2024.

Current wording

Due to the factors discussed above, income from operations was $64.6 million, or 7.7% of net sales, for the first thirty-nine weeks of fiscal 2025 compared to $70.5 million, or 8.8% of net sales, for the first thirty-nine weeks of fiscal 2024.

Previous wording

Interest expense was $0.8 million for the second quarter of fiscal 2025 compared to $1.1 million for the second quarter of fiscal 2024.

Current wording

Interest expense was $1.1 million for the third quarter of fiscal 2025 compared to $0.8 million for the third quarter of fiscal 2024.

Previous wording

Net rental and miscellaneous expense was $0.3 million for both the second quarter of fiscal 2025 and fiscal 2024.

Current wording

Net rental and miscellaneous expense was $0.6 million for the third quarter of fiscal 2025 compared to $0.3 million for the third quarter of fiscal 2024 due to the departure of a tenant upon lease expiration.

Previous wording

Net rental and miscellaneous expense was $0.8 million for the first twenty-six weeks of fiscal 2025 and $0.6 million for the first twenty-six weeks of fiscal 2024.

Current wording

Net rental and miscellaneous expense was $1.4 million for the first thirty-nine weeks of fiscal 2025 compared to $0.9 million for the first thirty-nine weeks of fiscal 2024.

Previous wording

Pension expense (excluding service costs) was $0.4 million for both the second quarter of fiscal 2025 and fiscal 2024 and $0.7 million for both the first twenty-six weeks of fiscal 2025 and fiscal 2024.

Current wording

Pension expense (excluding service costs) was $0.4 million for both the third quarter of fiscal 2025 and fiscal 2024 and $1.1 million for both the first thirty-nine weeks of fiscal 2025 fiscal 2024.

Previous wording

Income tax expense was $4.3 million, or 24.0% of income before income taxes (“effective tax rate”), for the second quarter of fiscal 2025 compared to $6.8 million, or 26.1% of income before income taxes, for the second quarter of fiscal 2024. The decrease in the effective tax rate is primarily due to a larger than anticipated research and development credit for the current fiscal year. Additionally, there is a reduction in the disallowed deduction related to officer compensation. These factors, along with the impact of lower pretax income, contributed to the decrease in effective tax rate.

Current wording

Income tax expense was $6.0 million, or 22.9% of income before income taxes (“effective tax rate”), for the third quarter of fiscal 2025 compared to $3.4 million, or 20.2% of income before income taxes, for the third quarter of fiscal 2024. The effective tax rate is higher in the current quarter because the prior year comparable quarter contained a larger research and development tax credit.

Previous wording

Income tax expense was $8.4 million, or 24.9% of income before income taxes, for the first twenty-six weeks of fiscal 2025 compared to $12.8 million, or 25.9% of income before income taxes, for the first twenty-six weeks of fiscal 2024.

Current wording

Income tax expense was $14.3 million, or 24.0% of income before income taxes, for the first thirty-nine weeks of fiscal 2025 compared to $16.2 million, or 24.4% of income before income taxes, for the first thirty-nine weeks of fiscal 2024.

Previous wording

Net income was $13.6 million, or $1.17 per common share basic and $1.16 per common share diluted, for the second quarter of fiscal 2025, compared to $19.2 million, or $1.65 per common share basic and $1.64 per common share diluted, for the second quarter of fiscal 2024.

Current wording

Net income was $20.2 million, or $1.73 per common share basic and $1.72 per common share diluted, for the third quarter of fiscal 2025, compared to $13.5 million, or $1.16 per common share basic and $1.15 per common share diluted, for the third quarter of fiscal 2024.

Previous wording

Net income was $25.3 million, or $2.17 per common share basic and $2.16 per common share diluted, for the first twenty-six weeks of fiscal 2025, compared to $36.8 million, or $3.17 per common share basic and $3.15 per common share diluted, for the first twenty-six weeks of fiscal 2024.

Current wording

Net income was $45.4 million, or $3.90 per common share basic and $3.87 per common share diluted, for the first thirty-nine weeks of fiscal 2025, compared to $50.2 million, or $4.33 per common share basic and $4.30 per common share diluted, for the first thirty-nine weeks of fiscal 2024.

Previous wording

The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand programs, modernize and expand our equipment, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under the Retirement Plan. Also, various uncertainties, including cost uncertainties, could result in additional uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning in the current fiscal quarter and continuing into the next fiscal year, we plan to invest approximately $90.0 million in capital expenditures (and related expenses) to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency, and further enhance our product offerings to our customers. We intend to obtain one or more equipment loans to finance a portion of this capital investment, and for the remainder we may fund with borrowings under our Credit Facility and/or use available cash generated from our operations. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the aforementioned equipment loan or loans will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to devote more funds to promote our products, increase consumer insight capabilities and promotional efforts, reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions, such as the Lakeville Acquisition, and explore and pursue other growth strategies outlined in our Long-Range Plan.

Current wording

The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand programs, modernize and expand our equipment, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under the Retirement Plan. Also, various uncertainties, including cost uncertainties, could result in additional uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning second quarter of fiscal 2025 and continuing into the next fiscal year, we plan to invest approximately $90.0 million in capital expenditures (and related expenses) to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers. We intend to obtain an equipment loan to finance a portion of this capital investment, and for the remainder we intend to fund with borrowings under our Credit Facility and/or use available cash generated from our operations. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the aforementioned equipment loan will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to devote more funds to promote our products, increase consumer insight capabilities and promotional efforts, reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions, such as the Lakeville Acquisition, and explore and pursue other growth strategies outlined in our Long-Range Plan.

Previous wording

The following table sets forth certain cash flow information for the first half of fiscal 2025 and 2024, respectively (dollars in thousands):

Current wording

The following table sets forth certain cash flow information for the first three quarters of 2025 and 2024, respectively (dollars in thousands):

Previous wording

Operating Activities Net cash provided by operating activities was $19.9 million for the first twenty-six weeks of fiscal 2025 compared to net cash provided by operating activities of $61.2 million for the comparative period of fiscal 2024. The decrease in operating cash flow was primarily due to changes in working capital and a lower net income.

Current wording

Operating Activities Net cash used in operating activities was $6.0 million for the first thirty-nine weeks of fiscal 2025 compared to net cash provided by operating activities of $66.4 million for the comparative period of fiscal 2024. The decrease in operating cash flow was primarily due to changes in working capital, primarily inventory, and a lower net income.