SANFILIPPO JOHN B & SON INC

Our net sales of $260.9 million for the third quarter of fiscal 2025 decreased $11.0 million, or 4.0%, from our net sales of $271.9 million for the third quarter of fiscal 2024. Net sales for the first thirty-nine weeks of fiscal 2025 increased by $41.0 million, or 5.1%, to $838.2 million compared to the first thirty-nine weeks of fiscal 2024.

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.

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.

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.

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.

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.