Oct 29, 2026 earnings call — Consumer volume shifts and contract manufacturing growth
Net sales decreased 3.5% to $288.1 million in the first quarter, driven by a 3.6% decrease in weighted average selling price per pound.
Revenue $0.3B (est $0.3B) · EPS $1.11 (est $1.53)
Key quotes
"Sales volume decreased 6.7% in the consumer distribution channel, primarily due to a 6.3% reduction in private brand sales volume."
"Sales volume increased 41.3% in the contract manufacturing distribution channel, primarily due to increased snack nut sales to an existing customer, which was partially offset by non-repeat of a prior year granola sales opportunity."
"To support these initiatives, we made significant capital investments in equipment and infrastructure improvements to expand our production capabilities, improve efficiency, and enhance product offerings for our customers."
Analyst Q&A 3
Why consumer volumes fell and replacement plans
Q (Balzhan Tleuzhanova · Freedom Broker): They asked how much of the consumer volume drop was lost business versus weaker demand at existing customers. They also asked if contract manufacturing would replace lost profit and volume, timing of pricing actions, new contract customer size and timing, and when capital investments help earnings.
A: Management said about "50%-60%" of the decline was lost business tied to two main customers: one online retailer and one mass merchandiser, with some online business expected to resume in Q4 or early Q1 and the mass merchandiser impact lasting "for the next two or three quarters." They said "The additional business in the contract manufacturing channel will replace the lost volume in the consumer channel." Pricing actions go into effect either "early January or early February" depending on the customer, but they have not yet calculated the gross margin impact because they do not yet know certain acquisition costs. Management also said a new contract customer had about "7.9 million pounds of volume in Q1" and they expect that to maintain and grow, and that they are starting up high-speed bar and other lines with benefits expected in Q4 and launches planned for Q4 and Q1.
"The additional business in the contract manufacturing channel will replace the lost volume in the consumer channel." — Frank Pellegrino (CFO)
Timing to optimize bar lines and competition
Q (Hamed Khorsand · BWS Financial): He asked how long before the new bar lines' inefficiencies hit gross margin are absorbed. He also asked about the competitive environment and how the company is adjusting as customers shift and competitors change.
A: Management said their earlier projection was three to five years for full absorption of capital investments, but for the new commercial bar line they expect it to be "fairly well optimized" within "three to six months." They said the category is tougher and competitive, but some competitors are exiting which gives the company additional opportunity; management noted excess capacity in nut and trail manufacturing and that closures are allowing them to regain some market business.
"I would say within three to six months, that bar line should be fairly well optimized." — Jasper Sanfilippo (CEO)
Protein line timing and pricing strategy
Q (Ronald Materko · MCM): He asked to confirm that Q4 meant fiscal Q4 and when efficiencies and shipments begin. He also asked what the consultants found about costs and growth, and for a simple explanation of current pricing actions.
A: Management confirmed it was fiscal Q4 and said "We will actually be shipping protein bars at the end of Q4," with commercialization and fine-tuning through Q3 and early Q4 and customer shipments starting at the end of Q4 and into Q1. The consulting engagement validated the five-year growth plan, supported expanding private-label protein bars if pricing and quality are competitive, and validated there are still opportunities in the nut and trail category while noting a need to educate consumers and adjust price-pack architecture. On pricing, management said increases are harder to execute in a soft category, fuel-related cost increases are easier to explain, but commodity cost increases are more challenging, so they plan to modify price-pack architecture and put health claims on packages to lower absolute purchase cost.
"We will actually be shipping protein bars at the end of Q4." — Jasper Sanfilippo (CEO)