J&J Snack Foods Corp. (NASDAQ:JJSF) Q1 2023 Earnings Call Transcript

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Todd Brooks: Thanks, Ken. And is that the right type of number to use for the March quarter as well as we’re going into the June and September ramp?

Ken Plunk: Slightly better than that Todd, I would probably kind of guide you that, you know, it’s should be positive, but less than $1 million positive.

Todd Brooks: Okay, that’s helpful, thank you. Secondly, just wanted to get back to a little follow up on Andy’s question about volumes, I was wondering two things. One, did you see any – and this would be outside of the consumer? Did you see destocking of inventories from your retail or obviously at the clubs and mass in the food service business? Were those customers working down inventories at all at the end of the year? Is that part of why the volume may have dip later in the quarter?

Dan Fachner: Yes, Todd that’s a good question and a good observation. And we absolutely believe that we did feel that a little bit as what I discussed with our own business. I think many of the retailers out there, found themselves in the same situation and – in our smart retailers and started to drive inventories down. And so yes, I think that was a portion of what came into play in that December month.

Todd Brooks: Okay, great. I’m sorry, Ken go ahead.

Ken Plunk: I was just going to add, there’s data out there. And there’s a lot of data, I’m sure you guys are doing the same thing. But I did read one that said spending at grocery stores was slightly down. So I think you’re starting to see people be a bit more frugal on the basket. The other thing that I read was a pretty pronounced increase in traffic and shopping at Dollar Stores, and a little bit less traffic at some of the bigger retailers, particularly the higher end grocery stores. So I think there’s something in there where some of that on the retail side is impacting you know, buying of our products. And then to your first question, does start to kind of drive different decisions on inventory. We’ve got too much for now they push back on us. We slowdown production and all of that, as you’re trying to calibrate it, can create a little bit of inefficiency.

Todd Brooks: Okay. And this is just I was wondering if this was part of the volume compare as well. Obviously, the ERP conversion in the March quarter of fiscal ’22, did any customers kind of preload inventory in advance of the conversion that would have benefited the December quarter last year, but made for a tougher volume compared this year?

Dan Fachner: No, Todd that’s a great question. But that really did not happen. Maybe in 2020 hindsight at this point, you know, we might have encouraged that last year, but I can’t say that that’s what happened.

Todd Brooks: Okay, great. And final question, I’ll pass it along. The strength in churros was the only launch at food service was that in place for the, was it – for the full quarter did roll out over the quarter. So actually, that strength when you have a full quarter of selling it into the food service channel could actually accelerate a bit going forward?

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