J & J Snack Foods Corp (NASDAQ:JJSF) stock rose 6.42% (As on November 16, 11:23:25 AM UTC-4, Source: Google Finance) after the company posted mixed result for the fourth quarter of FY 23. Gross profit as a percentage of sales was 32.8% in Q4 ’23, comparing favorably to 28.9% in Q4 ’22, reflecting increased volume, improved product mix, aligned pricing, as well as the stabilization of inflationary pressures on the back of historic highs last year. Overall, the company experienced deflation for the quarter led by flour, oils, dairy, eggs, and meats. The company continues to experience double digit inflation in sugar/sweeteners. In the fourth quarter of 2023, Food Service sales exceeded Q4 ’22 by 5.3%, Retail segment sales exceeded Q4 ’22 by 21.2% and Frozen Beverage segment sales exceeded Q4 ’22 sales by 20.6%. Organic sales growth was mainly driven by growth across the core brands and products, including pretzels, churros, frozen novelties and frozen beverages. Sales included approximately $35.2 million in revenue from Dippin’ Dots, which the company report as a part of Frozen Novelties in the Food Service segment. Dippin’ Dots sales exceeded Q4 ’22 sales by 11.7%.

Moreover, Outdoor venues, including stadiums and amusement parks, as well as schools and restaurants and strategic accounts continued to experience strong sales across all our product lines, including a 14.6% increase in pretzels, 9.7% increase in frozen novelties, an 8.1% increase in churros, and a 2.2% increase in bakery. Handhelds decreased 21.8% driven primarily by a contractual cost true-up agreement. Volume sales for core food service handhelds increased for the quarter.

JJSF in the fourth quarter of FY 23 has reported the adjusted earnings per share of $1.57, missing the analysts’ estimates for the adjusted earnings per share of $1.70. The company had reported 10.8 percent increase in the adjusted revenue to $443.9 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $421 million. Adjusted operating income was $45.8 million in the fourth quarter of fiscal 2023, compared to $25.8 million in the prior year period, with the increase driven by higher net sales, 390 bps improvement in gross margin rate and lower operating expenses as a percentage of sales. This led to net earnings in Q4 ’23 of $30.4 million, compared to $17.3 million in Q4 ’22.