SANFILIPPO JOHN B & SON INC

Net Sales

In the first quarter of fiscal 2026, our net sales increased 8.1% to $298.7 million, compared to net sales of $276.2 million for the first quarter of fiscal 2025. The net sales increase was primarily driven by an 8.9% increase in weighted average selling price per pound, which was due primarily to higher commodity acquisition costs for all major tree nuts. Sales volume, which is defined as pounds sold to customers, decreased 0.7%. Sales volume decreased for all major product types except for peanuts, walnuts and pecans.

The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.

The following table shows a comparison of net sales by distribution channel (dollars in thousands):

(1)

Sales of branded products were approximately 14% and 16% of total consumer sales during the first quarter of fiscal 2026 and fiscal 2025, respectively. Fisher branded products were approximately 67% and 57% of branded sales during the first quarter of fiscal 2026 and fiscal 2025, respectively, with Orchard Valley Harvest branded products accounting for the majority of the remaining branded product sales.

Net sales in the consumer distribution channel increased $12.7 million, or 5.5%, and sales volume decreased 5.1% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume decrease was driven by a 3.2% decrease in private brand sales volume, with approximately half of the decrease due to the discontinuation of peanut butter at a mass merchandiser. The remaining private brand sales volume decrease was due to nut and trail mix and bars. Nut and trail mix sales volume was impacted by higher retail prices and reduced promotional activity, partially offset by new business and expanded distribution at three existing customers. Bar sales volume declined due to a strategic reduction in sales to one grocery retailer and lost distribution to another, which were partially offset by growth at a mass merchandiser and at a current customer. Sales volume of Orchard Valley Harvest decreased 47.1% mainly due to lost distribution at a major customer in the non-food sector, contributing to the overall sales volume decrease in the consumer channel.

Net sales in the commercial ingredients distribution channel increased $4.3 million, or 16.0%, and sales volume increased 12.8% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The sales volume increase was mainly driven by new business at two customers, higher peanut butter volume at existing food service customers and increased sales of peanut crushing stock to peanut oil processors.

Net sales in the contract manufacturing distribution channel increased $5.5 million, or 27.5%, and sales volume increased 18.4% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The increase in sales volume was due to increased granola sales volume and increased snack nut sales to another customer added during the second quarter of fiscal 2025. These increases were partially offset by lower peanut and peanut butter sales volume to a major customer.

Gross Profit

Gross profit increased $7.6 million, or 16.2%, to $54.1 million for the first quarter of fiscal 2026, compared to $46.5 million for the first quarter of fiscal 2025. The increase in gross profit was due primarily to higher net sales and selling prices more closely aligned with commodity acquisition costs compared to the first quarter of fiscal 2025. Additionally, the first quarter of fiscal 2025 included a one-time price concession to a bars customer. Our gross profit margin, as a percentage of net sales, increased to 18.1% for the first quarter of fiscal 2026 compared to 16.9% for the first quarter of fiscal 2025, mainly due to the factors mentioned previously.

Operating Expenses

Total operating expenses for the first quarter of fiscal 2026 decreased $2.5 million, or 8.3%, to $27.1 million. Operating expenses decreased to 9.1% of net sales for the first quarter of fiscal 2026, compared to 10.7% of net sales for the first quarter of fiscal 2025.

Selling expenses for the first quarter of fiscal 2026 were $17.9 million, a decrease of 9.9% from the first quarter of fiscal 2025. The decrease was driven by a $1.4 million decrease in advertising and consumer insight research expense, a $0.8 million decrease in third-party warehouse costs and a $0.6 million decrease in freight expense. These increases were offset slightly by a $0.3 million increase in incentive compensation expense and a $0.3 million increase in commissions expense.

Administrative expenses for the first quarter of fiscal 2026 decreased $0.5 million, or 5.2%, to $9.2 million, compared to $9.7 million for the first quarter of fiscal 2025. The decrease was due to a $0.6 million decrease in personnel and recruitment expenses.

Income from Operations

Due to the factors discussed above, income from operations was $27.0 million, or 9.0% of net sales, for the first quarter of fiscal 2026, compared to $17.0 million, or 6.2% of net sales, for the first quarter of fiscal 2025.

Interest Expense

Interest expense was $1.0 million for the first quarter of fiscal 2026, compared to $0.5 million for the first quarter of fiscal 2025, due to higher average debt levels.

Rental and Miscellaneous Expense, Net

Net rental and miscellaneous expense was $0.6 million for the first quarter of fiscal 2026, compared to $0.4 million for the first quarter of fiscal 2025, primarily due to the departure of a tenant upon lease expiration at our Elgin Site.

Pension Expense (Excluding Service Costs)

Pension expense (excluding service costs) was $0.4 million for both the first quarter of fiscal 2026 and fiscal 2025.

Income Tax Expense

Income tax expense was $6.3 million, or 25.3% of income before income taxes, for the first quarter of fiscal 2026, compared to $4.1 million, or 25.8% of income before income taxes, for the first quarter of fiscal 2025.

Net Income

Net income was $18.7 million, or $1.60 per common share basic and $1.59 per common share diluted, for the first quarter of fiscal 2026, compared to $11.7 million, or $1.00 per common share basic and diluted, for the first quarter of fiscal 2025.