John B. Sanfilippo & Son Q4 2026 Earnings Report

John B. Sanfilippo & Son EPS Results

• Actual EPS: $0.71
• Consensus EPS: $1.17
• Beat/Miss: Missed by -$0.46
• One Year Ago EPS: N/A

John B. Sanfilippo & Son Revenue Results

• Actual Revenue: $280.43 million
• Expected Revenue: $274.87 million
• Beat/Miss: Beat by +$5.57 million
• YoY Revenue Growth: N/A

John B. Sanfilippo & Son Announcement Details

• Quarter: Q4 2026
• Date: 8/19/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 20, 2026
• Conference Call Time: 10:00AM ET

John B. Sanfilippo & Son (NASDAQ:JBSS) is a food manufacturer and marketer specializing in tree nuts, peanuts, snack mixes and related snack products. The company processes, packages and distributes products for retail, foodservice and industrial customers, including branded, private-label and contract-manufactured offerings.

Its brand portfolio includes Fisher, a consumer brand known for cooking and baking nuts, snacking nuts and nut toppings, as well as Orchard Valley Harvest and Sunshine Country. The company also supplies a range of nuts and nut-based ingredients used by food manufacturers and other commercial customers.

Founded in 1888, John B. Sanfilippo & Son is headquartered in Elgin, Illinois. It serves customers primarily in the United States and also has business activities in Canada. The company is led by Jeffrey T. Sanfilippo, who serves as chief executive officer.

John B. Sanfilippo & Son Q4 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Fiscal 2026 delivered record results: Net sales reached $1.2 billion and diluted EPS rose 4.6% to $5.26, despite a 2.5% full-year volume decline. The company also increased its annual dividend by 5.6% and declared a $1.05 per-share special dividend.
• Negative Sentiment: Fourth-quarter profitability deteriorated: Net income fell to $8.4 million, or $0.71 per diluted share, from $13.5 million, or $1.15, a year earlier. Gross margin declined to 15.7% due to recall-related costs, higher input and freight expenses, customer claims, and manufacturing inefficiencies.
• Positive Sentiment: Management reported a return to company-wide sales-volume growth in the fourth quarter after five consecutive quarters of declines, led by private-label nuts and trail mix and higher contract-manufacturing sales. However, the broader snack nut and trail mix category remained weak, with volume down 7%.
• Positive Sentiment: New bar capacity is expected to support growth: High-speed chewy and fruit-and-grain bar lines are on track to become operational around fiscal 2027’s second quarter, with management estimating more than $300 million of potential revenue over three to five years. The company is targeting protein- and fiber-focused products and pursuing private-label and co-manufacturing customers.
• Negative Sentiment: Cost volatility remains a key risk, including commodities, packaging resin, freight, fuel, labor, tariffs, and customer-related deductions; management cited roughly $2 million of freight and fuel-related costs in the quarter. The company is seeking price increases and recovery of disputed customer charges, but acknowledged that continued cost escalation could be difficult to pass through.

Presentation

[Operator]

Good day, and welcome to the John B. Sanfilippo & Son, Inc. fourth quarter and full year 2026 operating results conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star one one on your touchtone telephone. Please note this call may be recorded. I would like to turn the call over to Jeffrey Sanfilippo, Chief Executive Officer. Please go ahead.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Thank you, Michelle. Good morning, everyone, and welcome to our fiscal 2026 fourth quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our Chief Financial Officer, and Jasper Sanfilippo, our Chief Operating Officer. We may make some forward-looking statements today. These statements are based on our current expectations, and they involve certain risks and uncertainties. The factors that could negatively impact results are explained in the various SEC filings that we have made, including forms 10-K and 10-Q. We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business. Now I will turn to results. I am pleased to report on a strong fiscal 2026, with net sales reaching a record $1.2 billion and diluted earnings per share increasing 4.6% for the full year.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Achieving record net sales and earnings growth in a challenging consumer and cost environment is a testament to the strength of our business, the dedication of our team, and the depth of our customer relationships. In addition, we remain committed to returning capital to our shareholders. During the 2026 calendar year, we increased our annual dividend by 5.6% to $0.95 per share and declared a special dividend of $1.05 per share, representing a 75% increase with the prior year. Both dividends will be paid on September 9th, 2026, bringing total dividends paid during 2026 calendar year to $3.50 per share. This year marks our 15th consecutive year of returning capital to shareholders through dividends and the ninth consecutive year of increasing our annual dividend, reflecting the strength of our balance sheet, our consistent cash generation, and our ongoing commitment to creating long-term shareholder value.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

While our bottom line results for the most recent fourth quarter did not match last year's results, we were encouraged to see a return to growth in our company-wide sales volume after five consecutive quarters of decline. We believe this is a positive signal for our entire portfolio. Fourth quarter profitability was impacted by several challenges, including higher than anticipated input and transportation costs, manufacturing inefficiencies associated with the continued onboarding of a large contract manufacturing customer, and certain customer-related charges. We are actively responding to these increased costs, executing mitigation plans to manage unexpected customer charges, and improving operational efficiencies as we move into fiscal 2027. There are three key priorities for JBSS in the coming year. First, we are focused on restoring volume in the snack nut and trail mix categories.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Consumer trends indicate that shoppers remain highly value conscious after several years of elevated prices across the snacking segment. To address this, we're working with an external partner on a consumer study to better understand how we can reengage shoppers and drive volume growth without sacrificing margin. These insights will help guide our approach to optimizing value propositions, pack price architecture, promotional effectiveness, and selective price adjustments. There continue to be positive tailwinds in the nut category as strong health and wellness trends are having a significant impact on consumer food purchases. Our second priority is to expand our bar portfolio and sell through the significant new manufacturing capacity we have added at our Elgin facility. Our engineering team has done an outstanding job bringing the new high-speed bar lines we purchased online, and we expect them to be fully operational by the second quarter of fiscal 2027.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

In parallel, our research and development, sales, marketing, procurement, and technical services teams have worked hard together to build a robust pipeline of new products that have been presented to customers. Consumer trends are strong for higher protein and higher fiber products, and our bar portfolio is positioned perfectly to meet this growing demand. We are very optimistic about securing new distribution in the near future, and we estimate over $300 million in potential new growth for JBSS as we sell the capacity on these lines. Our third priority is to manage cost volatility with a relentless focus on productivity. Like many food manufacturers, we continue to face uncertainty across commodities, packaging, energy, transportation, labor, and tariffs. Teams across our organization are focused on reducing costs where possible while improving productivity and efficiency.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Key areas of focus include AI-enabled process enhancements, plant efficiency, SKU rationalization, trade spend effectiveness, procurement savings, and supply chain optimization. I'll now turn the call over to Frank to discuss our financial performance.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

Thanks, Jeffrey. Starting with the income statement. Net sales for the fourth quarter of fiscal 2026 increased by 4.2% to $280.4 million compared to net sales of $269.1 million for the fourth quarter of fiscal 2025. The increase in net sales was due to a 2.8% increase in the weighted average sales price per pound and a 1.4% increase in sales volume for pounds sold to customers. The increase in the weighted average selling price primarily reflected pricing actions taken in response to higher commodity acquisition costs for peanuts and all major tree nuts except walnuts, which was partially offset by a shift in product mix towards lower-priced items in the current quarter. Sales volume in the consumer distribution channel slightly increased by 0.8% due to a 2.4% increase in private brand sales, reflecting higher volume in private label nuts and trail mix.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

Flow was partially offset by decreased bars volume due to our strategic decision to reduce sales to a grocery store retailer. The increase from private label nuts and trail mix volume was positively impacted by initial shipments to the new grocery retailer and expanded distribution to two existing grocery retailers, which was partially offset by lost private label business at an online retailer. In addition, our branded sales were negatively impacted by decreased Fisher recipe nut sales due to the timing of the Easter holiday and related promotional activity, as well as lower sales of Southern Style Nuts Hundred Mix, which was temporarily withdrawn from the market following a product recall of an externally sourced ingredient contained in that snack mix. Sales volume decreased 5.4% in the commercial ingredients channel, mainly driven by timing of a peanut crushing stock sales, and sales volumes were elevated in the preceding quarter.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

Food service sales volume remained relatively flat in the quarterly comparison. Sales volume in the contract manufacturing channel increased 12.6% due to increased snack nut sales to a significant new customer that we added during the second quarter of the prior year. This increase was partially offset by decreased granola sales volume. Gross profit decreased by $4.6 million or 9.5% to $44.1 million compared to the fourth quarter of last year, driven by $2.7 million of recall-related costs associated with the dried milk powder supplied by a third-party manufacturer incorporated in our Southern Style Nuts products. Gross profit was also negatively affected by higher customer claims, higher snack bar ingredient costs, manufacturing efficiencies, and higher freight expense. Gross profit margin decreased to 15.7% of net sales compared to 18.1% for the fourth quarter of fiscal 2025, due to the reasons previously mentioned and partially offset by higher net sales base.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

Total operating expenses increased by $3.1 million compared to the prior year fourth quarter, driven by higher incentive compensation, freight and marketing insights expenses, which was partially offset by estimated insurance recovery associated with the dry milk powder recall. Total operating expenses as a percentage of net sales for the fourth quarter of fiscal 2026 increased to 11.3% from 10.6% compared to prior year comparable quarter. Interest expense was $400,000 for the fourth quarter of fiscal 2026 compared to $1.2 million for the fourth quarter of fiscal 2025, due to higher average line of credit levels. Net income for the fourth quarter of fiscal 2026 was $8.4 million or $0.71 per diluted share compared to $13.5 million or $1.15 per diluted share for the fourth quarter of fiscal 2025. Now take a look at inventory.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

The total value of inventories on hand at the end of the current fourth quarter decreased $8.8 million or 3.4% compared to prior year comparable quarter. The decrease was driven by lower finished goods inventories for bars, lower walnut acquisition costs, and lower on-hand quantities of pecans and walnuts, which were partially offset by higher pecan and almond acquisition costs. The weighted average cost per pound of raw nut and dried fruit input stock on hand increased 12.1% due to higher pecan and almond acquisition costs, partially offset by lower walnut acquisition costs. Moving on to year-to-date results. Net sales for fiscal 2026 increased 6.2% to $1.2 billion compared to fiscal 2025. The increase in net sales was primarily attributable to an 8.9% increase in the weighted average selling price per pound, which was partially offset by a 2.5% decrease in sales volume.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

The sales volume decrease was due to lower sales volume in the consumer channel, partially offset by sales volume increases in the commercial ingredients and contract manufacturing channels. Gross profit margin decreased to 18% of net sales compared to 18.4% in the prior fiscal year, mainly attributable to the factors noted earlier in the quarterly comparison and lower inventory valuation adjustments, which were partially offset by aligning our pricing more closely with our commodity acquisition costs and the absence of a one-time pricing concession recognized in the prior year. Total operating expenses increased $3.2 million in fiscal 2026 compared to fiscal 2025, primarily due to higher incentive compensation expense.

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

This increase was partially offset by the estimated insurance recovery related to the dry milk powder recall, lower compensation expense, a net gain of disposal of non-core equipment compared to a net loss in the prior year, and reduced marketing and insights spending and lower third-party warehouse costs. Interest expense was $2.4 million for fiscal 2026, compared to $3.6 million for fiscal 2025. Net income for fiscal 2026 was $61.9 million, or $5.26 per diluted share, compared to $58.9 million, or $5.03 per diluted share for fiscal 2025. Please refer to our 10-K for additional details regarding our financial performance for fiscal 2026. Now I turn the call over to Jeffrey to provide additional comments.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Thanks, Frank, for the financial updates. Now let's shift to consumption activity and category updates. All the market information I'll be referring to is Circana panel data, and for today it is for the period ending June 28, 2026. When I refer to Q4, I'm referring to 13 weeks of the quarter ending June 28, 2026. References to changes in volume are versus the corresponding period one year ago. For pricing commentary, we are using Circana MULO scan data, and we are referring to average price per pound. We are using the nut, trail mix, and bar syndicated views of the category as defined by Circana. In the fourth quarter, we continue to see modest growth in the broader snack aisle, as defined by Circana. Volume and dollars were up 0.7% and 3% respectively, driven by price increases. This is consistent with the performance we saw in Q3.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

In Q4, the snack nut and trail mix category was down 7% in volume and 3% in US dollars, which is a continued acceleration of the volume softness we saw last quarter. Snack nut prices rose 5%, with increases across nearly all nut types. Prices rose 7% for trail mixes. Our private label consumer snack and trail shipments performed substantially better than the category, with pound shipments up 3% versus last year. This positive momentum was driven by new distribution across several grocery retailers. Fisher snack and trail mix performed better than the category, with pound shipments up 15%. Fisher's performance was due to expanded assortment in a specialty retailer and strength within the e-commerce channel. Our Orchard Valley Harvest brand, which primarily plays in trail mix, was down 26% in pound shipments during Q4. General category softness paired with lapping rotations at a club retailer drove the decline.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Our Southern Style Nuts brand experienced a 27% decrease in pound shipments, driven by a voluntary recall within the Southern Style Nuts portfolio, which Frank already mentioned. Now let me turn to the recipe nut category. In Q4, the recipe nut category was up 6% in pounds and up 12% in US dollars, driven by growth in private label as a discount retailer expanded store counts. The recipe category experienced a 7% price increase, driven by pecans. Our Fisher recipe nuts pound shipments were down 12% in Q4 due to slower velocities among grocery retailers. Now we will switch to the bar category. In Q4, the bars category grew by 2% in pounds and 5% in dollars, which is consistent with last quarter. Bars category momentum continued to be driven by a branded player growth in the protein segment of the bar category.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Private label was down 5% in pounds and down 4% in dollars as consumer preferences shift to protein bars, which is comprised primarily of branded offerings. Our private label bar shipments were down 3% versus a year ago, which is consistent with private label category trends. In closing, as we enter fiscal 2027 with strong momentum and optimism as we continue to execute our strategic plan, we are actively pursuing additional opportunities to grow sales volume across all three of our distribution channels, and we are encouraged by early signs of success. At the same time, we remain focused on disciplined cost management and driving further operational efficiencies. That said, we recognize that significant external uncertainties remain, including tariffs, inflation, unpredictable commodity costs, and broader macroeconomic challenges. These factors will require us to stay agile and responsive as the year progresses.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

We are committed to taking the necessary actions to deliver long-term sustainable growth, enhance margins, and continue to create value for our customers, consumers, and shareholders. As I mentioned last month, I will be stepping down as Chief Executive Officer in October to assume the role of Executive Chairman, and my brother Jasper will succeed me as Chief Executive Officer. Over the last several years, we have made significant investments in our people, our capabilities, and our infrastructure that we believe will support long-term sustainable growth. These investments, combined with a disciplined growth strategy focused on continuous improvement, innovation, customer partnership, and operational excellence, should position the company for continued success. Under Jasper's leadership, I am confident JBSS will continue to execute its strategic plan, strengthen its market position, and capitalize on future growth opportunities.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

As I reflect on the past 20 years, I want to sincerely thank our current and former employees for their hard work, dedication, and commitment. Together, we have transformed JBSS into a stronger, more diversified, and more profitable organization while preserving the entrepreneurial and family-oriented culture that has always defined our company. Our ability to remain nimble, adapt to changing market conditions, and work collaboratively to serve our customers has been a key driver of our success and is a big part of our culture.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

It has been an honor to lead this remarkable organization as Chief Executive Officer, and I am deeply grateful to our employees, customers, suppliers, and shareholders for their trust, support, and partnership throughout this journey. We appreciate your participation in the call, and I thank you for your interest in our company. I will now open the call to questions. Michelle, you can open up the lines.

[Operator]

Thank you. As a reminder, to ask a question, please press star one one. If your question has been answered and you would like to remove yourself from the queue, press star one one again. Our first question comes from Hamed Khorsand with BWS Financial. Your line is open.

[Hamed Khorsand, Analyst at BWS Financial]

Good morning. Could you just expand upon the comment that I heard you say about litigation expense and customer charges and what is going on there?

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Yeah. This is Jeffrey. We had some unexpected deductions from a major customer that we are still negotiating with that customer to regain some of those deductions. Something out of our control that occurred in Q4, but we are working actively to try to get some of that money back.

[Hamed Khorsand, Analyst at BWS Financial]

Okay. My other question was, any update as far as the new equipment being installed and acceptance with any new potential customers?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Sure, Hamed, this is Jasper. We are currently on track for both the high-speed fruit and grain and the chewy bar line. We are expecting the chewy bar line to be up and operational by the end of October, and then the fruit and grain bar shortly thereafter.

[Hamed Khorsand, Analyst at BWS Financial]

Is any sampling going on right now, or are you still waiting to bring it completely online?

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

No, we are actively pursuing new customer business, and we have created a lot of samples that have gone out to all our key customers. A very positive response from them. But the operation will be up and running, we are hoping in October, to actually produce product. As soon as we get a new customer online, we will start shipping in the third quarter.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Yeah. Actually, this week we are testing the functionality of the chewy bar kitchen, and then we will follow that with actually making the bars, we will then run it through packaging. So we are on time and looking in good shape for both lines.

[Hamed Khorsand, Analyst at BWS Financial]

Okay, great. My last topic was, as far as nuts and trail mix is concerned, are you changing productions to go towards more small packages in any way, maybe to lower the price for consumer? Are you seeing that kind of demand right now?

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Yeah, it's a combination. We're looking at innovation, obviously. Protein and fiber is a very important product line that we've recently launched in our Orchard Valley Harvest. That's GoGo Protein Peanut, and we are launching a GoGo Protein Almond. We're really looking at consumer trends. Protein is high. Fiber is extremely important. We're looking not only at the product, but then also the pack sizes and the price points. So making really selective promotional price points that we feel will help us drive growth in the category.

[Hamed Khorsand, Analyst at BWS Financial]

Great. Thank you.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Thanks.

[Operator]

Thank you. Our next question comes from Nick Otten with National Bank Financial. Your line is open.

[Nick Otten, Analyst at National Bank Financial]

Hi. Good morning, guys.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Good morning.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Morning.

[Nick Otten, Analyst at National Bank Financial]

I just had some stuff on the charges and everything. The higher input cost in transportation, do you expect that you can pass this on eventually, or is this continue going to be something that you're going to have to eat going forward?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

No, we will do our best to pass those costs along. Again, if they keep increasing, it becomes more difficult. But no, those were incurred during the quarter, and we will pass those along during our next pricing review.

[Nick Otten, Analyst at National Bank Financial]

How much of that was that in the quarter? Is it a small amount? Is it a couple million dollars?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

It was a couple million US dollars.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

It was a couple million US dollars, and we are working hard to get those price increases for freight with our customers today. We should expect to see that in Q2.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Nick, it is mainly freight and fuel related, like surcharges and also the resin market is up for packaging, which is kind of related to fuel also. All those things kind of escalated during the quarter that are kind of out of our control.

[Nick Otten, Analyst at National Bank Financial]

On the bar lines, you were just talking about chewing granola, but I thought you guys were also doing some protein going on there. I was wondering when that is going to get started up because it is one of the bigger markets there.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Correct. We, through Q4, did commercialize both some fig bar offerings as well as some protein bar offerings. We will continue to do so. We are running trials currently for other protein bars. We believe that some of those bars will be in the market sometime early Q3. But we do continue to add capabilities to our current protein bar line to keep up with the growing brand that Jeff referred to with some of the branded players.

[Nick Otten, Analyst at National Bank Financial]

How long You are talking about this $300 million opportunity. Is this like you can achieve it in a year or two, three? What is the timeline that your expectation for this to really start ramping?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

If I had to guess, somewhere between three to five years.

[Nick Otten, Analyst at National Bank Financial]

Are there any customers signed up at all? Is Costco a customer, or what is going on just to underwrite these investments overall?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

We are actively working with both large retailers as well as some opportunities we have come across in the co-man channel.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Yeah. We are looking at everything from club channel, obviously Sam's and Costco, to grocery, alternative channel, there are opportunities. As Jasper mentioned, co-man, some of the big brands could be potential customers as well for us. You are right that Jasper is going to segment is that protein forward. You look at Barebells, Built Puff, David's, and they are all doing extremely well in the category, and retailers see that growth and are looking for private brand options.

[Nick Otten, Analyst at National Bank Financial]

Frank, we talked about in the past, are we just finally seeing this nut price squeeze these smaller players that had steel and share, but they are now coming back your way and everything?

[Frank Pellegrino, CFO at John B. Sanfilippo & Son]

Indirectly, yes. We are seeing them because nut prices are elevated, and it is a little more competitive out there.

[Nick Otten, Analyst at National Bank Financial]

If we are having an El Niño year, are we going to go through this cycle again where nuts are going to get all this rain, we are going to see lower pricing and more competition? What are your expectations going for next year?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Yeah. We haven't seen any effects from El Niño yet. But the crops look pretty decent out in California, with maybe the exception of the early indications of the almond crop. But all the other crops look like they're in pretty good shape.

[Nick Otten, Analyst at National Bank Financial]

Okay, thanks. That's it for more questions from me.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Thank you.

[Operator]

Thank you. Again, if you'd like to ask a question, please press star one one. Our next question comes from Ron Materko with MCM. Your line is open.

[Ron Materko, Analyst at MCM]

Hey. Hi, guys. Thank you. Jeffrey, thank you so much for your stewardship of the company, and we appreciate your candor and your working so hard for us. I just had a question. I think a lot of my questions were answered by the previous two guys, but just to summarize the bar business, you are going to be targeting the higher end in the protein and fiber content things, but doing it in a private label way. So as not to. Because the market is seemingly growing away from just the real high priced branded contingent. Is that correct? Do you intend to do anything proprietary in your own branding at some point down the road?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Yes. Right now, we're focused on just getting the successful brands emulated and get private label offerings in the retail market. I think the co-pack or the co-manufacturing opportunity for some of these brands does allow us to get into other channels where private label wouldn't work, for example, sports stores, gyms, and things of that nature. But yeah, at some point, we will work with our customers to develop proprietary formulas for them.

[Ron Materko, Analyst at MCM]

Okay.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

I would just add to that. If you look at the category, you've got the biggest volume would be something like fruit and grain, the chewy granola bars. These high-speed lines will make us more competitive in those categories. The bigger focus is on research and development, innovation in the forward protein bars, as I mentioned earlier. That's where the biggest growth is coming from, is those high protein bars in the category. So we have a combination of the volume items with chewy granola and fruit and grain, but then the high margin, high growth in the protein forward bars.

[Ron Materko, Analyst at MCM]

Okay. From the acquisition, it sounds like you're putting in the new lines are going to be in Elgin, where you guys live. Would that be new technology that you've had to adopt from the bar business that you bought? I know you guys have been in the bar business for a long time. Could you just talk a little bit about that?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Sure. This is Jasper. The two high-speed lines are really balancing out our manufacturing capability. Obviously, there are certain SKUs that are high volume, which we will be moving to the high volume bar lines, but there are a lot of other SKUs that we have, both at large retailers and smaller retailers, that would not warrant running on a very, very high-speed bar line. Much like we did for Snack Nut and Trail, we developed our manufacturing capabilities to run low volumes very efficiently as well as high volumes very efficiently. That's really what this investment represents, is just balancing out our manufacturing capabilities to better fit our customer demands.

[Ron Materko, Analyst at MCM]

Okay. Those lines will be up and running by the end of October?

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Q2 and Q3.

[Ron Materko, Analyst at MCM]

Okay. Good. Thank you very much.

[Jasper Sanfilippo, COO at John B. Sanfilippo & Son]

Thanks for the questions.

[Operator]

Thank you. I am showing no further questions at this time. I would like to turn the call back over to Jeffrey Sanfilippo for closing remarks.

[Jeffrey Sanfilippo, CEO at John B. Sanfilippo & Son]

Thanks, Michelle. We appreciate your participation in the call, and thank you for interest in our company. I would like to mention that upcoming events, the company will be presenting at the BWS Financial Growth and Value Summer Investor Series Conference in New York City, this coming Tuesday, August 25th, and the Midwest IDEAS Conference in Chicago on August 27th. Qualified investors that would like to schedule a meeting with management should contact Three Part Advisors at the phone number below. Thank you for your interest. Have a great day.

[Operator]

Thank you for your participation. You may now disconnect.

Participants

Executives

• Jeffrey Sanfilippo, CEO
• Frank Pellegrino, CFO
• Jasper Sanfilippo, COO

Analysts

• Hamed Khorsand, Analyst at BWS Financial
• Nick Otten, Analyst at National Bank Financial
• Ron Materko, Analyst at MCM