Q1 2027 John B Sanfilippo & Son Inc Earnings Call

October 29, 2026

Jasper Sanfilippo: Good morning everyone, and welcome to our 2027 first quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO and President, and Jeffrey Sanfilippo, our Executive Chairman. 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 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. First, I'd like to take this opportunity to thank my brother, Jeff, for his exceptional leadership, guidance, and vision. Through Jeff's 20-plus years as CEO, he has well-positioned the business for great success.

Jasper Sanfilippo: Good morning, everyone, and welcome to our 2027 Q1 Earnings Conference Call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO and president, and Jeffrey Sanfilippo, our executive chairman. 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 various SEC filings that we have made, including forms 10-K and 10-Q.

Speaker #1: chairman. We may make some forward-looking statements today. These statements are based on our current expectations and the involved certain risks and uncertainties. The factors that could negatively impact results are explained in various SEC filings that we have made, including Forms 10-K and 10-Q.

Jasper Sanfilippo: We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business. First, I'd like to take this opportunity to thank my brother, Jeff, for his exceptional leadership, guidance, and vision. Through Jeff's 20+ years as CEO, he has well-positioned the business for great success.

Speaker #1: We encourage you to refer to the filings to learn more about these risks and uncertainties that are inherent in our business. First, I'd like to take this opportunity to thank my brother Jeff for his exceptional leadership, guidance, and vision.

Speaker #1: Through Jeff's 20-plus years as CEO, he has well-positioned the business for great success. Frank, the management team, and myself are looking forward to working with Jeff as he moves into his new role as executive chairman.

Jasper Sanfilippo: Frank, the management team, and myself are looking forward to working with Jeff as he moves into his new role as Executive Chairman. I am honored to serve as Chief Executive Officer and build upon the strong foundation of our company. We remain committed to profitable growth, operational excellence, disciplined capital allocation, and maintaining our financial strength, while continuing to deliver exceptional service to our customers. We delivered a solid start to our fiscal 2027 in a difficult economic environment. Sales volume was unchanged from the prior year period, marking our third consecutive quarter of stable or improving volume performance. While last year's exceptionally strong first quarter diluted EPS provided a difficult comparison, we improved diluted EPS by more than 50% compared to the fourth quarter of fiscal 2026, demonstrating a meaningful improvement in profitability and positive momentum during the 2026 calendar year.

Jasper Sanfilippo: Frank, the management team, and myself are looking forward to working with Jeff as he moves into his new role as executive chairman. I am honored to serve as chief executive officer and build upon the strong foundation of our company. We remain committed to profitable growth, operational excellence, disciplined capital allocation, and maintaining our financial strength, while continuing to deliver exceptional service to our customers. We delivered a solid start to our fiscal 2027 in a difficult economic environment.

Speaker #1: I am honored to serve as chief executive officer and build upon the strong foundation of our company. We remain committed to profitable growth, operational excellence, disciplined capital allocation, and maintaining our financial strength while continuing to deliver exceptional service to our customers.

Speaker #1: We delivered a solid start to our fiscal 2027 in a difficult economic environment. Sales volume was unchanged from the prior year period, marking our third consecutive quarter of stable or improving volume performance.

Jasper Sanfilippo: Sales volume was unchanged from the prior year period, marking our third consecutive quarter of stable or improving volume performance. While last year's exceptionally strong first quarter diluted EPS provided a difficult comparison, we improved diluted EPS by more than 50% compared to the fourth quarter of fiscal 2026, demonstrating a meaningful improvement in profitability and positive momentum during the 2026 calendar year.

Speaker #1: While last year's exceptionally strong first quarter diluted EPS provided a difficult comparison, we improved diluted EPS by more than 50% compared to the fourth quarter of fiscal 2026.

Speaker #1: Demonstrating a meaningful improvement in profitability and positive momentum during the 2026 calendar year. Looking ahead, we remain focused on executing our strategic priorities and believe we are well-positioned to build on this momentum throughout fiscal 2027.

Jasper Sanfilippo: Looking ahead, we remain focused on executing our strategic priorities and believe we are well-positioned to build on this momentum throughout fiscal 2027. Our long-range plan defines our future growth priorities, focused on accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars, while expanding branded distribution behind Orchard Valley Harvest and Fisher through insight-driven product and packaging innovation. Execution of our long-range plan is anchored in delivering value-added solutions and high-quality, innovative products based on our extensive nut and consumer expertise. Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline aligned with consumer trends such as protein bars. For our branded nut and trail mix business, we are focused on attracting new consumers through product innovation, broader distribution across traditional and alternative channels, and expanded purchasing occasions.

Speaker #1: Our long-range plan defines our future growth priorities, focused on accelerating our private brand business with key customers and high-growth snacking categories most notably private brand bars, while expanding branded distribution behind Orchard Valley Harvest and Fisher through insight-driven products and packaging innovations.

Jasper Sanfilippo: Execution of our long-range plan is anchored in delivering value-added solutions and high-quality, innovative products based on our extensive nut and consumer expertise. Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline aligned with consumer trends such as protein bars. For our branded nut and trail mix business, we are focused on attracting new consumers through product innovation, broader distribution across traditional and alternative channels, and expanded purchasing occasions.

Speaker #1: Execution of our long-range plan is anchored in delivering value-added solutions and high-quality innovative products based on our extensive and consumer expertise. Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline, aligned with consumer trends such as protein bars.

Speaker #1: For our branded nut and trail mix business, we are focused on attracting new consumers through product innovation and broader distribution across traditional and alternative channels, and expanded purchasing occasions.

Jasper Sanfilippo: Promotion and advertising investments are focused on driving branded growth, supported by an omni-channel strategy across recipe nuts, snack nuts, and trail mix. Our long-range plan also includes growth through product and packaging innovation. 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. Price inflation and consumer sentiment continue to be a challenge for the snack category across many food segments. We have faced significant supply chain cost increases over the past year, and our teams have worked hard to mitigate margin compression through pricing adjustments and efficiency gains. Our team also worked hard to drive additional costs out of our operations and supply chain and manage our inventory levels. Demand planning becomes challenging when consumer behavior changes and markets become volatile.

Speaker #1: Promotion and advertising investments are focused on driving branded growth, supported by an omnichannel strategy across recipe nuts, snack nuts, and trail mix. A long-range plan also includes growth through product and packaging innovation.

Speaker #1: 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.

Speaker #1: Price inflation and consumer sentiments continue to be a challenge for the snack category across many food segments. We faced significant supply chain cost increases over the past year, and our teams have worked hard to mitigate margin compression through pricing adjustments and efficiency gains.

Jasper Sanfilippo: We have faced significant supply chain cost increases over the past year, and our teams have worked hard to mitigate margin compression through pricing adjustments and efficiency gains. Our team also worked hard to drive additional costs out of our operations and supply chain and manage our inventory levels. Demand planning becomes challenging when consumer behavior changes and markets become volatile.

Speaker #1: Our team also worked hard to drive additional costs out of our operations and supply chain and manage our inventory levels. Demand planning becomes challenging when consumer behavior changes and markets become volatile, so we are prioritizing resource-to-work with our key retail partners on better forecasting and order planning.

Jasper Sanfilippo: We are prioritizing resources to work with our key retail partners on better forecasting and order planning. This is the busy season for our nut and trail business. Our sales marketing operations team have done a great job building our business for the upcoming holiday season, and we are in full swing with shipments to customers. As we have shared on previous calls, the inflationary environment has changed consumer behavior and have seen them shift to more value-focused retailers such as club stores. Our teams have worked hard to expand our retail distribution in clubs and alternative channels with innovative product and pack sizes. Our OVH brand has gained a new rotation at a key club retailer, and the rollout of our OVH Go-Go Protein snack item is gaining traction, and we gained new distribution at a major grocery retailer.

Speaker #1: This is the busy season for our nut and trail business. Our sales, marketing, operations team have done a great job building our business for the upcoming holiday season, and we are in full swing with shipments to customers.

Speaker #1: As we have shared on previous calls, the inflationary environment has changed consumer behavior and has seen them shift to more value-focused retailers such as club stores.

Jasper Sanfilippo: Our teams have worked hard to expand our retail distribution in clubs and alternative channels with innovative product and pack sizes. Our OVH brand has gained a new rotation at a key club retailer, and the rollout of our OVH Go-Go Protein snack item is gaining traction, and we gained new distribution at a major grocery retailer. I am proud of our R&D team for creating amazing, innovative snack products and building a pipeline for future growth. A call out to our sales team, who provided value in building collaborative partnerships with major retailers across the country.

Speaker #1: Our teams have worked hard to expand our retail distribution in clubs and alternative channels with innovative products and pack sizes. Our OVH brand has gained a new rotation at a key club retailer, and the role of our OVH GOGO Protein Snack item is gaining traction. We also gained new distribution at a major grocery retailer.

Jasper Sanfilippo: I am proud of our R&D team for creating amazing, innovative snack products and building a pipeline for future growth. A call out to our sales team, who provided value in building collaborative partnerships with major retailers across the country. I will now turn the call over to Frank Pellegrino to provide additional information on our financial performance for our first quarter.

Speaker #1: I am proud of our R&D team for creating amazing innovative snack products and building a pipeline for future growth. And a callout to our sales team who provided value in building collaborative partnerships with major retailers across the country.

Jasper Sanfilippo: I will now turn the call over to Frank Pellegrino to provide additional information on our financial performance for our first quarter.

Speaker #1: I will now turn the call over to Frank Pellegrino to provide additional information on our financial performance for our first quarter.

Frank Pellegrino: Thanks, Jasper. Starting with the income statement. Net sales for the first quarter of fiscal 2027 decreased by 3.5%, $288.1 million, from our net sales of $298.7 million for the first quarter of fiscal 2026. This decrease in net sales was due to a 3.6% decrease in the weighted average sales price per pound, which is primarily attributable to a shift in product mix toward lower priced items and lower selling prices for walnuts, trail and snack mix products, and peanuts, resulting from lower commodity acquisition costs. These decreases were partially offset by higher selling prices for pecans and almonds due to higher commodity acquisition costs. Sales volume decreased for all major product types except for peanuts, walnuts, and pecans, all of which experienced volume growth in the quarter. Sales volume decreased 6.7% in the consumer distribution channel, primarily due to a 6.3% reduction in private brand sales volume.

Speaker #2: Thanks, Jasper. Starting with the income statement, net sales for the first quarter of fiscal 2027 decreased by 3.5%, 288.1 million, with our net sales of 298.7 million for the first quarter of fiscal 2026.

Speaker #2: The decrease in net sales was due to a 3.6% decrease in the weighted average sales price per pound. Which is primarily attributable to a shift in product mix toward lower price items.

Speaker #2: A lower selling prices for walnuts, trail and snack mix products, and peanuts resulting from lower commodity acquisition costs. These decreases were partially offset by higher selling prices for pecans and almonds due to higher commodity acquisition costs.

Frank Pellegrino: These decreases were partially offset by higher selling prices for pecans and almonds due to higher commodity acquisition costs. Sales volume decreased for all major product types except for peanuts, walnuts, and pecans, all of which experienced volume growth in the quarter. Sales volume decreased 6.7% in the consumer distribution channel, primarily due to a 6.3% reduction in private brand sales volume. Decline was driven mainly by lower nut and trail mix volume and, to a lesser extent, lower bar volume.

Speaker #2: Sales volume decreased for all major product types except for peanuts, walnuts, and pecans. All of which experienced volume growth in the quarter. Sales volume decreased 6.7% in the consumer distribution channel.

Speaker #2: Primarily due to a 6.3% reduction in private brand sales volume. Decline was driven mainly by lower nut and trail mix volume due to a lesser extent lower bar volume.

Frank Pellegrino: Decline was driven mainly by lower nut and trail mix volume and, to a lesser extent, lower bar volume. Bar sales were impacted by softness in mainstream bars and consumer migration to smaller pack sizes, partially offset by successful launch of a new better-for-you bar offering and an expanded bar business with an existing customer. Nut and trail mix sales volume was negatively impacted by lower sales to several existing customers, driven by category softness in snack and trail mix products and peanuts, reduced promotional activity, and the impact of previously lost business. These declines were partially offset by new business to a grocery retailer and additional recipe nut volume to three existing customers. Sales volume increased 3.7% in the commercial ingredients distribution channel, mainly driven by increased sales of peanut crushing stock to peanut oil processors.

Frank Pellegrino: Bar sales were impacted by softness in mainstream bars and consumer migration to smaller pack sizes, partially offset by successful launch of a new better-for-you bar offering and an expanded bar business with an existing customer. Nut and trail mix sales volume was negatively impacted by lower sales to several existing customers, driven by category softness in snack and trail mix products and peanuts, reduced promotional activity, and the impact of previously lost business.

Speaker #2: Bar sales were impacted by softness in mainstream bars and consumer migration to smaller pack sizes. Partially offset by a successful launch of a new better-for-you bar offering and an expanded bar business with an existing customer.

Speaker #2: Nut and trail mix sales volume was negatively impacted by lower sales to several existing customers. Driven by category softness in snack and trail mix products, and peanuts, reduced promotional activity and the impact of previously lost business.

Frank Pellegrino: These declines were partially offset by new business to a grocery retailer and additional recipe nut volume to three existing customers. Sales volume increased 3.7% in the commercial ingredients distribution channel, mainly driven by increased sales of peanut crushing stock to peanut oil processors. In addition, food service sales increased modestly due to new business, customer growth, and favorable order timing. These increases were partially offset by lower industrial sales resulting from planned business exits, lower customer demand, and unfavorable order timing.

Speaker #2: These declines were partially offset by new business to a grocery retailer and additional recipe nut volume to three existing customers. Sales volume increased 3.7% in the commercial ingredients distribution channel mainly driven by increased sales of peanut crush and stock to peanut oil processors, in addition, food service sales increased modestly due to new business, customer growth, and favorable order timing.

Frank Pellegrino: In addition, food service sales increased modestly due to new business, customer growth, and favorable order timing. These increases were partially offset by lower industrial sales resulting from planned business exits, lower customer demand, and unfavorable order timing. Sales volume increased 41.3% in the contract manufacturing distribution channel, primarily due to increased snack nut sales from an existing customer, which was partially offset by non-repeat of a prior year granola sales opportunity. Gross profit decreased $5.2 million or 9.6% to $48.9 million compared to last year's Q1, driven by competitive pricing pressures and timing of pricing actions for peanuts, bars, snack, and trail mix. Additionally, manufacturing expenses increased due to higher freight, facility repairs and maintenance, and rent costs.

Speaker #2: These increases were partially offset by lower industrial sales resulting from planned business exits, lower customer demand, and unfavorable order timing. Sales volume increased 41.3% in the country manufacturing distribution channel, primarily due to increased snack nut sales in existing customers, which was partially offset by the non-repeat of a prior year granola sales opportunity.

Frank Pellegrino: Sales volume increased 41.3% in the contract manufacturing distribution channel, primarily due to increased snack nut sales from an existing customer, which was partially offset by non-repeat of a prior year granola sales opportunity. Gross profit decreased $5.2 million or 9.6% to $48.9 million compared to last year's Q1, driven by competitive pricing pressures and timing of pricing actions for peanuts, bars, snack, and trail mix. Additionally, manufacturing expenses increased due to higher freight, facility repairs and maintenance, and rent costs.

Speaker #2: Gross profit decreased 5.2 million, or 9.6%, to 48.9 million compared to last year's first quarter, driven by competitive pricing pressures and timing of pricing actions for peanuts, bars, snack, and trail mix.

Speaker #2: Additionally, manufacturing expenses increased due to higher freight and equipment repairs and maintenance and rent costs. Gross profit declined to 17% of net sales compared to 18.1% for the first quarter of fiscal 2026 due to reasons previously mentioned and an unfavorable shift in product mix.

Frank Pellegrino: Gross profit declined to 17% of net sales compared to 18.1% for the Q1 of fiscal 2026 due to the reasons previously mentioned and an unfavorable shift in product mix. Total operating expenses increased $2.5 million year over year, primarily driven by increases in professional fees, freight costs, rent expense, and compensation expense. These increases were partially offset by lower incentive compensation expense. Total operating expenses as a percentage of net sales increased to 10.3% from 9.1% in the prior comparable quarter due to the reasons previously mentioned and a lower net sales base. Interest expense was $700,000 for the Q1 of fiscal 2027 compared to $1 million for the Q1 of fiscal 2026 due to lower borrowings under our credit agreement.

Speaker #2: Total operating expenses increased 2.5 million year over year primarily driven by increases in professional fees, freight costs, rent expense, and compensation expense. These increases were partially offset by lower incentive compensation expense.

Speaker #2: Total operating expenses as a percentage of net sales increased to 10.3% from 9.1% in the prior comparable quarter due to the reasons previously mentioned and a lower net sales base.

Frank Pellegrino: Interest expense was $700,000 for the Q1 of fiscal 2027 compared to $1 million for the Q1 of fiscal 2026 due to lower borrowings under our credit agreement. Net income for the Q1 of fiscal 2027 was $13.2 million, or $1.11 per diluted share, compared to $18.7 million or $1.59 per diluted share for the Q1 of fiscal 2026. Now taking a look at inventory. Total value of inventories on hand at the end of this year's Q1 remained substantially consistent with last year's Q1.

Speaker #2: Interest expense was 700,000 for the first quarter of fiscal 2027 compared to 1 million for the first quarter of fiscal 2026. Due to lower bar rates under our credit agreement.

Frank Pellegrino: Net income for the Q1 of fiscal 2027 was $13.2 million, or $1.11 per diluted share, compared to $18.7 million or $1.59 per diluted share for the Q1 of fiscal 2026. Now taking a look at inventory. Total value of inventories on hand at the end of this year's Q1 remained substantially consistent with last year's Q1. However, weighted average cost per pound of raw nut and dry fruit input stock on hand decreased 20.6% year over year, primarily due to higher on-hand quantities of peanuts, both in-shell and meats, purchased at lower costs, partially offset by higher acquisition costs of pecans and almonds. Please refer to our Form 10-Q for additional details regarding our financial performance for the Q1 of fiscal 2027. Now I turn the call back over to Jasper to provide additional comments.

Speaker #2: Net increase net income for the first quarter of fiscal 2027 was 13.2 million, or $1.11 per diluted share, compared to 18.7 million or $1.59 per diluted diluted share for the first quarter of fiscal 2026.

Speaker #2: Now taking a look at inventory. Total value of inventories on hand at the end of this year's first quarter remains substantially consistent with last year's first quarter.

Frank Pellegrino: However, weighted average cost per pound of raw nut and dry fruit input stock on hand decreased 20.6% year over year, primarily due to higher on-hand quantities of peanuts, both in-shell and meats, purchased at lower costs, partially offset by higher acquisition costs of pecans and almonds. Please refer to our Form 10-Q for additional details regarding our financial performance for the Q1 of fiscal 2027. Now I turn the call back over to Jasper to provide additional comments.

Speaker #2: However, the weighted average cost per pound of raw nut and dried fruit input stock on hand decreased to 20.6% year over year. Primarily due to higher on-hand quantities of peanuts both in shell and meats purchased at lower costs.

Speaker #2: Partially offset by higher acquisition costs of pecans and almonds. Please refer to our form 10-Q for additional details regarding our financial performance. The first quarter of fiscal 2027.

Speaker #2: Now I'll turn the call back over to Jasper to provide additional comments.

Jasper Sanfilippo: Thanks, Frank, for the financial update. Success requires smart strategy and the right business model for sustainable growth. It also requires a talented and committed group of leaders across the organization. We have all of those elements of success at JBSS. Turning over to category data, I will review Q1 category trends and then discuss the shipment performance of businesses. Unless otherwise noted, market volume and dollar trends are based on Circana panel data for the 13 weeks ended 27 September 2026, compared with the same period last year. Pricing trends reflect Circana MULO+ average price per pound. Category references use Circana nut, trail mix, and bar syndicated definitions. We will start with the broader snack aisle, as defined by Circana. In Q1, category volume was essentially flat, declining just 0.3%, while dollar sales increased 4.5%, driven by higher prices.

Speaker #1: Thanks, Frank, for the financial updates. Success requires smart strategics and the right business model for sustainable growth. It also requires a talented and committed group of leaders across the organization who have all of those elements of success at JBSS.

Speaker #1: Turning over to category data. I will review first quarter category trends and then discuss the shipment performance of businesses. Unless otherwise noted, market volume and dollar trends are based on surplus panel data for the 13 weeks ended September 27, 2026, compared with the same period last year.

Jasper Sanfilippo: Pricing trends reflect Circana MULO+ average price per pound. Category references use Circana nut, trail mix, and bar syndicated definitions. We will start with the broader snack aisle, as defined by Circana. In Q1, category volume was essentially flat, declining just 0.3%, while dollar sales increased 4.5%, driven by higher prices. This represented a modest acceleration in volume compared with Q4. Within snack nuts and trail mix, category volume declined 6% and dollar sales declined 3%, consistent with the volume softness we saw last quarter.

Speaker #1: Pricing trends reflect surplus mullo plus average price per pound, category references use surplus nut trail mix and bars syndicated definitions. We will start with the broader snack aisle as defined by surplus.

Speaker #1: In first quarter category volume was essentially flat, declining just 0.3%. By dollar sales increased 4.5% driven by higher prices. This represented a modest acceleration in volume compared with the fourth quarter.

Jasper Sanfilippo: This represented a modest acceleration in volume compared with Q4. Within snack nuts and trail mix, category volume declined 6% and dollar sales declined 3%, consistent with the volume softness we saw last quarter. Average prices per pound increased 4% in snack nuts, with increases across all nut types and 6% in trail mixes. Our private label consumer snack and trail shipments underperformed the category with Q1 pound shipments down 8% versus last year. The decline reflected category softness, reduced shelf space at a mass merchandiser, and weaker performance from innovation at a national grocer. Turning now to the recipe nuts category. In Q1, the recipe nut category continued its positive momentum, with category volume up 9% and dollar sales up 10%. Growth was driven by private label as a discount retailer expanded its store count.

Speaker #1: Within snack nuts and trail mix, category volume declined 6% and dollar sales declined 3%. Consistent with the volume softness we saw last quarter. Average prices per pound increased 4% in snack nuts with increases across all nut types and 6% in trail mixes.

Jasper Sanfilippo: Average prices per pound increased 4% in snack nuts, with increases across all nut types and 6% in trail mixes. Our private label consumer snack and trail shipments underperformed the category with Q1 pound shipments down 8% versus last year. The decline reflected category softness, reduced shelf space at a mass merchandiser, and weaker performance from innovation at a national grocer. Turning now to the recipe nuts category. In Q1, the recipe nut category continued its positive momentum, with category volume up 9% and dollar sales up 10%.

Speaker #1: Our private label consumer snack and trail shipments underperformed the category with first quarter pound shipments down 8% versus last year. The decline reflected category softness, reduced shelf space at a mass merchandiser, and weaker performance from innovation at a national grocer.

Speaker #1: Turning now to the recipe nuts category. In the first quarter, the recipe nut category continued its positive momentum with category volume up 9% and dollar sales up 10%.

Jasper Sanfilippo: Growth was driven by private label as a discount retailer expanded its store count. Average price per pound was flat overall, although results varied by nut type. Almond and walnut prices declined while pecan prices increased. Our private label recipe nut shipments outperformed the category, with Q1 pound shipments up 29% versus last year. The robust performance reflects significant distribution gains across both grocery and mass merchandising channels. Moving next to the bars category. In Q1, bars category volume was essentially flat, down 0.3%, while dollar shares increased 6%.

Speaker #1: Growth was driven by private label, as a discount retailer expanded its store count. Average price per pound was flat overall, although results varied by nut type.

Jasper Sanfilippo: Average price per pound was flat overall, although results varied by nut type. Almond and walnut prices declined while pecan prices increased. Our private label recipe nut shipments outperformed the category, with Q1 pound shipments up 29% versus last year. The robust performance reflects significant distribution gains across both grocery and mass merchandising channels. Moving next to the bars category. In Q1, bars category volume was essentially flat, down 0.3%, while dollar shares increased 6%. This represented a moderation in volume compared with last quarter. Dollar growth continued to be led by national brands in the protein bar segment. Private label volume declined 10%, and dollar sales declined 5%, reflecting the consumer shift towards protein bars, where national brands are more heavily represented, as well as reduced private label distribution in the mass and club channels.

Speaker #1: Almond and walnut prices declined while pecan prices increased. Our private label recipe nut shipments outperformed the category with first quarter pound shipments up 29% versus last year.

Speaker #1: The robust performance reflects significant distribution gains across both grocery and mass merchandising channels. Turning next to the bars category. In the first quarter, bars category volume was essentially flat, down 0.3% by dollar shares increased 6%.

Jasper Sanfilippo: This represented a moderation in volume compared with last quarter. Dollar growth continued to be led by national brands in the protein bar segment. Private label volume declined 10%, and dollar sales declined 5%, reflecting the consumer shift towards protein bars, where national brands are more heavily represented, as well as reduced private label distribution in the mass and club channels. Our private label bar shipments declined 4% versus the prior year, reflecting an unfavorable mix shift and continued softness in mainstream bars.

Speaker #1: This represented a moderation in volume compared with the last quarter. Dollar growth continued to be led by national brands in the protein bar segment.

Speaker #1: Private label volume declined 10%, and dollar sales declined 5%, reflecting the consumer shift toward protein bars, where national brands are more heavily represented, as well as reduced private label distribution in the mass and club channels.

Jasper Sanfilippo: Our private label bar shipments declined 4% versus the prior year, reflecting an unfavorable mix shift and continued softness in mainstream bars. In closing, as we look ahead to the remainder of fiscal 2027, we are confident in our ability to navigate the near-term challenges in our consumer channel. While we expect to replace a significant portion of the lost consumer volume with incremental contract manufacturing volume, this shift will result in a less favorable sales mix. However, we continue to identify opportunities to grow the consumer business. Our brand and many of our products remain well-aligned with consumer demand for nutritious, better-for-you snacks. We are actively responding to current category trends while focusing on initiatives to improve category performance and drive category growth. We are also encouraged by new business opportunities we are pursuing in our nut and trail mix category.

Speaker #1: Our private label bar shipments declined 4% versus the prior year reflecting an unfavorable mix shift and continued softness in mainstream bars. In closing, as we look ahead to the remainder of fiscal 2027, we are confident in our ability to navigate the near-term challenges in our consumer channel.

Jasper Sanfilippo: In closing, as we look ahead to the remainder of fiscal 2027, we are confident in our ability to navigate the near-term challenges in our consumer channel. While we expect to replace a significant portion of the lost consumer volume with incremental contract manufacturing volume, this shift will result in a less favorable sales mix. However, we continue to identify opportunities to grow the consumer business. Our brand and many of our products remain well-aligned with consumer demand for nutritious, better-for-you snacks.

Speaker #1: While we expect to replace a significant portion of the lost consumer volume with incremental contract manufacturing volume, this shift will result in a less favorable sales mix.

Speaker #1: However, we continue to identify opportunities to grow the consumer business. Our brands and many of our products remain well aligned with consumer demand for nutritious, better-for-you snacks.

Jasper Sanfilippo: We are actively responding to current category trends while focusing on initiatives to improve category performance and drive category growth. We are also encouraged by new business opportunities we are pursuing in our nut and trail mix category. In addition, we continue to see significant opportunities to expand our protein forward bar offerings, where consumer demand and category growth remain strong.

Speaker #1: And we are actively responding to current category trends while focusing on initiatives to improve category performance and drive category growth. We are also encouraged by new business opportunities we are pursuing and are nut and trail mix category.

Jasper Sanfilippo: In addition, we continue to see significant opportunities to expand our protein forward bar offerings, where consumer demand and category growth remain strong. We recently completed a strategic consulting engagement that reinforced our long-term growth plan and identified further opportunities to accelerate long-term growth. In addition, we are currently evaluating our cost structure to maximize efficiency, prioritize resources, and ensure we proactively respond to evolving market conditions. We are excited about the future of the company and grateful to our employees for their hard work, dedication, and commitment to executing our strategy. All of us have been steadfast commitment to develop plans to create shareholder value and provide relevant, profitable, value-added products and services to our customers and consumers. Our mission is to provide great-tasting, innovative products that brings joy, nourishes people, and protects the planet.

Speaker #1: In addition, we continue to see significant opportunities to expand our protein-forward bar offerings, where consumer demand and category growth remain strong. We recently completed a strategic consulting engagement that reinforced our long-term growth plan and identified further opportunities to accelerate long-term growth.

Jasper Sanfilippo: We recently completed a strategic consulting engagement that reinforced our long-term growth plan and identified further opportunities to accelerate long-term growth. In addition, we are currently evaluating our cost structure to maximize efficiency, prioritize resources, and ensure we proactively respond to evolving market conditions. We are excited about the future of the company and grateful to our employees for their hard work, dedication, and commitment to executing our strategy.

Speaker #1: In addition, we are currently evaluating our cost structure to maximize efficiency prioritized resources and ensure we proactively respond to evolving market conditions. We are excited about the future of the company and grateful to our employees for their hard work, dedication, and commitment to executing our strategy.

Jasper Sanfilippo: All of us have been steadfast commitment to develop plans to create shareholder value and provide relevant, profitable, value-added products and services to our customers and consumers. Our mission is to provide great-tasting, innovative products that brings joy, nourishes people, and protects the planet. We appreciate your participation in the call and thank you for your interest in our company. We will now open the call to questions. Angelina, please queue up the first question.

Speaker #1: All of us have been steadfast commitment to develop plans to create shareholder value and provide relevant profitable value-added products and services to our customers and consumers.

Speaker #1: Our mission is to provide great-tasting, innovative products that bring joy, nourish people, and protect the planet. We appreciate your participation in the call and thank you for your interest in our company.

Jasper Sanfilippo: We appreciate your participation in the call and thank you for your interest in our company. We will now open the call to questions. Angelina, please queue up the first question.

Speaker #1: We will now open the call to questions. Angelina, please queue up the first question.

Operator: Thank you. At this time, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Balzhan Tleuzhanova of Freedom Broker. Your line is now open.

Speaker #2: Thank you. At this time, we will conduct the question and answer session. As a reminder to ask a question, you will need to press star 11 on your telephone and wait.

Speaker #2: For your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bazan Tezzanova of Freedom Broker.

Speaker #2: Your line is now open.

Balzhan Tleuzhanova: Hi. Good morning. Could you please help us understand how much of the consumer volume decline reflected previously lost business versus weaker demand at existing customers?

Speaker #3: Hi, good morning. Could you please help us understand how much of the consumer volume decline reflected previously lost business versus weaker demand at existing customers?

Jasper Sanfilippo: Sure. This is Frank. I will take that answer. Approximately 50% to 60% of the decline in the private label nuts and trail was due to lost business, and they were focused on two main customers. First, an online retailer who consolidated suppliers last year. We saw the impact starting in Q4 of last year. However, we were able to win back some of that business, and we expect to start shipping in Q4 or early Q1. The second customer is a mass merchandiser, and this was due to that customer dual sourcing several nut types where we were the sole supplier. We will see that impact for the next two or three quarters.

Frank Pellegrino: Sure. This is Frank. I will take that answer. Approximately 50% to 60% of the decline in the private label nuts and trail was due to lost business, and they were focused on two main customers. First, an online retailer who consolidated suppliers last year. We saw the impact starting in Q4 of last year. However, we were able to win back some of that business, and we expect to start shipping in Q4 or early Q1. The second customer is a mass merchandiser, and this was due to that customer dual sourcing several nut types where we were the sole supplier. We will see that impact for the next two or three quarters.

Speaker #1: Sure. This is Frank. I'll take that answer. Approximately 50 to 60 percent of the decline in the private label nuts and trail was due to lost business.

Speaker #1: And they were focused on two main customers. First, on online retailer who consolidated suppliers last year. We saw the impact starting in Q4 of last year.

Speaker #1: However, we were able to win back some of that business and we expect to start shipping in Q4, early Q1. And the second customer is a mass merchandiser and this was due to that customer dual sourcing several nut types.

Speaker #1: Where we were this whole supplier so we will see that impact for the next two or three quarters.

Balzhan Tleuzhanova: Thank you. My next question. Do you expect the additional contract manufacturing business to replace the gross profit lost in the consumer channel as well as the volume?

Speaker #3: Thank you. My next question. Do you expect additional contract manufacturing business to replace the gross profit lost in the consumer channel as well as the volume?

Jasper Sanfilippo: The additional business in the contract manufacturing channel will replace the lost volume in the consumer channel.

Frank Pellegrino: The additional business in the contract manufacturing channel will replace the lost volume in the consumer channel.

Speaker #1: The additional business in the contract manufacturing channel will replace the loss volume in the consumer channel.

Balzhan Tleuzhanova: Okay. When do you expect your pricing actions to take full effect, and how much margin improvement could they support from the first quarter level?

Speaker #3: Okay. When do you expect your pricing actions to take full effect and how much margin improvement could they support from the first quarter level?

Jasper Sanfilippo: We are currently working on our pricing actions. They go into effect either early January or early February, depending on the customer. We have not yet calculated what the gross margin impact will be going forward, as we still do not know all of the acquisition costs that were vertically integrated, such as peanuts, pecans, and walnuts.

Speaker #1: So we are currently working on our pricing actions. They go into effect either early January or early February, depending on the customer. We have not yet calculated what the gross margin impact will be going forward as we still do not know all of the acquisition costs that we're vertically integrated such as peanuts, pecans, and walnuts.

Balzhan Tleuzhanova: Mm-hmm. Thank you. How much of the contract manufacturing growth came from the new customer, and when do you expect that business to reach its full run rate?

Speaker #3: Thank you. How much of the contract manufacturing growth came from the new customer, and when do you expect that business to reach its full run rate?

Jasper Sanfilippo: Sure. We are still on-ramping that new customer, and we will continue on-ramping for the rest of the year, so it is hard to give you the exact number. For instance, Q1, that new customer had approximately, I believe, 7.9 million pounds of volume in Q1. So we expect that number to maintain and grow over the next several quarters.

Frank Pellegrino: Sure. We are still on-ramping that new customer, and we will continue on-ramping for the rest of the year, so it is hard to give you the exact number. For instance, Q1, that new customer had approximately, I believe, 7.9 million pounds of volume in Q1. So we expect that number to maintain and grow over the next several quarters.

Speaker #1: Sure. We're still ramping up that new customer, and we will continue ramping up for the rest of the year. So it's hard to give you the exact number, but for instance, in Q1, that new customer had approximately 7.9 million pounds of volume.

Speaker #1: So we expect that number to maintain and grow the next several quarters.

Balzhan Tleuzhanova: Mm-hmm. When do you expect your recent capital investments to begin making a meaningful contribution to earnings?

Speaker #3: When do you expect your recent factory investments to begin making a meaningful contribution to earnings?

Jasper Sanfilippo: We are currently starting up one of the high-speed bar lines as we speak. We would expect in Q4, you would start seeing the benefits of both high-speed fruit and grain, as well as high-speed chewy, as well as our protein line. We have several launches planned for Q4 and Q1 across those three channels.

Speaker #1: We are currently starting up one of the high-speed bar lines as we speak. We would expect in Q4, you would start seeing the benefit of both high-speed fruit and grain as well as high-speed chewing.

Speaker #1: As well as our protein line as well. We have several launches planned for Q4 and Q1 across those three channels.

Balzhan Tleuzhanova: Mm-hmm. Thank you. I appreciate the additional detail.

Speaker #3: Thank you. I appreciate the additional detail.

Jasper Sanfilippo: Thank you.

Jeffrey Sanfilippo: Thank you.

Frank Pellegrino: Thank you.

Speaker #1: Thank you. Thank you.

Operator: Thank you. Our next question comes from the line of Hamed Khorsand of BWS Financial. Your line is now open.

Speaker #2: Thank you. Our next question comes from the line of Hamid Korsen. BWS Financial. Your line is now open.

Hamed Khorsand: Hi. Good morning. So first off, just on the bar lines that you are launching now, how long before you fully absorb the cost and inefficiencies?

Speaker #4: Hi, good morning. So first off, just on the bar lines that you're launching now, how long before you fully absorb the cost and efficiencies?

Jasper Sanfilippo: Current projection, as we stated before, is about three to five years.

Speaker #1: Current projection, as we stated before, is about three to five years.

Hamed Khorsand: Oh, no, I was talking about the inefficiencies, like more of on the gross margin side.

Speaker #4: Oh, no. I was talking about the inefficiencies, like more of on the gross margin side. Because we're ramping.

Jasper Sanfilippo: Oh.

Hamed Khorsand: Because you are ramping.

Jasper Sanfilippo: Yeah, we are commercializing one of the bar lines now. Obviously, they are much bigger, faster, and a bit more complicated. I would say within 3 to 6 months, that bar line should be fairly well optimized. Then fruit and grain is coming online in Q3, so I would expect some time late Q4 for that line to also be fully optimized.

Speaker #1: Yeah, so we're commercializing one of the bar lines now. Obviously, they're much bigger, faster, and a bit more complicated. So I would say within three to six months, that bar line should be fairly well optimized.

Speaker #1: And then fruit and grain is coming online in Q3. So I would expect sometime late Q4 for that line to also be fully optimized.

Hamed Khorsand: Okay. Could you just talk about the competitive environment? It seems like you lost the online merchant, now the online merchant is back. Consumers are gravitating more towards the lower end of the market. How are you guys transitioning with all this? It seems like there is a lot going on for you.

Speaker #4: Okay. And then could you just talk about the competitive environment? It seems like you lost the online merchant. Now the online merchant's back. Consumers are more gravitating more towards the lower end of the market.

Speaker #4: How are you guys transitioning with all this? It seems like there's a lot going on for you.

Jasper Sanfilippo: Yeah, I would say the competitive environment is tougher than what we have normally seen. Obviously, as the category has softness, other competitors are also looking for ways to continue to maintain or grow their business, so it is challenging in that environment. That being said, however, there are certain competitors that have decided to exit the business, which also gives us additional opportunity.

Speaker #1: Yeah. I would say the competitive environment is tougher than what we have normally seen. Obviously, as the category has softness, other competitors are also looking for ways to continue to maintain or grow their business.

Speaker #1: So it is challenging. In that environment. That being said, however, there are certain competitors that have decided to exit the business, which also gives us additional opportunity.

Hamed Khorsand: Okay.

Jeffrey Sanfilippo: Yeah, it is Jeffrey. I would just add that, there is a lot of excess capacity in nut and trail manufacturing, which has caused, obviously, you see the declines in the category. But as Jasper mentioned, there are two competitors that are closing down or have closed down their manufacturing sites, which will take some of that excess capacity out of the industry. Thus, we are gaining back some of the market business that we lost over the last six months or so. So we are bullish as far as kind of manufacturing and what the opportunities are there with less excess capacity in the industry.

Speaker #4: Okay.

Speaker #1: Yeah. Yeah. It's Jeffrey.

Speaker #5: Hey. I would just add that so there's a lot of excess capacity in nut and trail manufacturing. This has caused obviously you see the declines in the category.

Speaker #5: But as Jesper mentioned, there's two competitors that are closing down or have closed down their manufacturing sites, which will take some of that excess capacity out of the industry.

Speaker #5: Thus, we are gaining back some of the market business that we lost over the last six months or so. So we're bullish as far as kind of manufacturing and what the opportunities are there with less capacity, excess capacity in the industry.

Hamed Khorsand: Okay, great. Thank you.

Speaker #4: Okay. Great. Thank you.

Operator: Thank you. Our next question comes from the line of Ronald Materko of MCM. Your line is now open.

Speaker #2: Thank you. Our next question comes from the line of Ronald Materko of MCM, your line is now open.

Ronald Materko: Thank you. Can you hear me all right, guys? Welcome, Jasper. Nice to hear from you, Jeff and Frank.

Speaker #4: Thank you. Can you hear me all right, guys? Welcome, Jasper. And nice to hear from you, Jeff and Frank.

Jasper Sanfilippo: Thank you.

Speaker #1: Thank you.

Ronald Materko: My questions have mostly been answered, but I just wanted to double-check. On the protein bar line, we mean Q4 as in calendar Q4? As we speak?

Speaker #4: My questions have mostly been answered, but I just wanted to double-check on the protein bar line. We mean Q4 as in calendar Q4. So as we speak?

Jasper Sanfilippo: No. I am sorry, it would be our fiscal Q4.

Speaker #1: No. I'm sorry. It'd be our fiscal Q4. So that if we can separate.

Ronald Materko: Okay. At that point in fiscal Q4, some of the efficiencies will be absorbed, and it will be what you are hoping is up to speed in terms of operational?

Speaker #4: Okay. And at that point in fiscal Q4, some of the efficiencies will be absorbed and it'll be what you're hoping is up to speed in terms of operational?

Jasper Sanfilippo: Correct. We will actually be shipping private brand bars at the end of Q4.

Speaker #1: Correct. We will actually be shipping protein bars at the end of Q4. So that works being done now will be commercializing and fine-tuning that line.

Ronald Materko: Okay.

Jasper Sanfilippo: That work is getting done now. We will be commercializing and fine-tuning that line throughout Q3 and early Q4, with customer shipments beginning at the end of Q4 and Q1.

Speaker #1: Throughout Q3 and early Q4, with customer shipments beginning at the end of Q4 and Q1.

Ronald Materko: Okay. Thank you. So I know things are changing so dramatically as some of the questioners have pointed out. Could you just give a little bit of clarity on the nature of the consulting effort and what you have found in terms of cost reduction possibilities and so forth? Just the usual things. It seems like you guys are probably getting into a little bit more in the weeds on this stuff.

Speaker #4: Okay. Thank you. And then just on the so I know things are changing. So dramatically as some of the questioners have pointed out. But could you just give a little bit of clarity on the nature of the consulting effort and what you've found and in terms of cost reduction possibilities and so forth?

Speaker #4: Just the usual things. It seems like you guys are probably getting into a little bit more in the weeds on this stuff.

Jeffrey Sanfilippo: Yeah. The consulting engagement was to really validate our five-year growth plan. Because you know a big part of our thesis is expanding the private brand bars category into private brands, since there is very little distribution today. The consulting group validated that. They validated that consumers will buy protein-forward bars, private label versions, as long as there is competitive pricing and the quality consistency is there. So we validated that. They also looked at the nut and trail category, as we have talked about on previous calls. There has been declines in consumption. A lot of that was driven by price inflation across every nut type, packaging, distribution, fuel surcharges, packaging materials. They validated that there are still opportunities in the nut and trail category.

Speaker #5: Yeah. So the consulting engagement was to really validate our five-year growth plan. As you know, a big part of our thesis is expanding the protein bar category into private brands since there's very little distribution today.

Speaker #5: And so the consulting we've been validated that. They validated that consumers will buy protein-forward bars private label versions. As long as there's competitive pricing and the quality and consistency is there.

Speaker #5: So we validated that. They also looked at the nut and trail category as we've talked about on previous calls. There's been declines in consumption.

Jeffrey Sanfilippo: A lot of that was driven by price inflation across every nut type, packaging, distribution, fuel surcharges, packaging materials. They validated that there are still opportunities in the nut and trail category. We have got to educate consumers on the value of nuts and the health benefits of nuts, especially those that are on GLP-1s that are looking for satiating protein-forward healthy snacks. The results of that is we have got to do a better job educating consumers on why nuts are still a great snack item.

Speaker #5: A lot of that was driven by price inflation across every nut type, packaging, distribution, fuel charges, packaging materials. And so, they validated that there are still opportunities in the nut and trail category.

Jeffrey Sanfilippo: We have got to educate consumers on the value of nuts and the health benefits of nuts, especially those that are on GLP-1s that are looking for satiating protein-forward healthy snacks. The results of that is we have got to do a better job educating consumers on why nuts are still a great snack item. We have got to work on price pack architecture to get lower price points because of inflation and because of the economy today. So they have given us a lot of good validations on our growth thesis. Now it is a matter of executing some of the things that they recommended. So we are very excited about the results of their study. It validates a lot of what we have talked about and what our plans are. Now it is a matter of executing some of the key findings that they provided.

Speaker #5: We've got to educate consumers on the value of nuts and the health benefits of nuts, especially those that are on GLP-1s that are looking for satiating protein-forward healthy snacks.

Speaker #5: And so the results of that is we've got to do a better job educating consumers on why nuts are still a great snack item.

Jeffrey Sanfilippo: We have got to work on price pack architecture to get lower price points because of inflation and because of the economy today. So they have given us a lot of good validations on our growth thesis. Now it is a matter of executing some of the things that they recommended. So we are very excited about the results of their study. It validates a lot of what we have talked about and what our plans are. Now it is a matter of executing some of the key findings that they provided.

Speaker #5: We've got to work on price pack architecture to get lower price points because of inflation and because of the economy today. So they've given us a lot of good validations on our growth thesis.

Speaker #5: Now it's a matter of executing some of the things that they recommended. So we're very excited about the results of their study and validates a lot of what we've talked about and what our plans are.

Speaker #5: Now it's a matter of executing some of the key findings that they provided.

Ronald Materko: Okay, thanks, Jeff. If that is it on that one, then the last question is, could you just give a little bit of almost standing on one foot explanation of what is going on with pricing? I know in the past sometimes when it has been difficult as costs come down with certain nuts and then, but almost better when you get a little bit of pricing flexibility either from some more advantageous procurement techniques.

Speaker #4: Okay, thanks. And if that's it on that one, then the last question is, could you just give a little bit of, almost like, a standing-on-one-foot explanation of what's going on with pricing?

Speaker #4: I know in the past, sometimes when it's been difficult as costs come down with certain nuts and then but almost better when you get a little bit of pricing flexibility either from some more advantageous procurement techniques.

Jasper Sanfilippo: Yeah.

Ronald Materko: So just what is going on. Mm-hmm. Thank you.

Speaker #4: So just what's going on. Thank you.

Jasper Sanfilippo: Yeah, as you can imagine, as pricing is going up, it is always a challenge for us to execute that with our retail partners, particularly in a category that is showing the softness that it is. Certain attributes of the price increase, like fuel related or anything oil related as part of our cost, pretty easy, and I think our customers understand what is driving that. It gets more challenging when we have to describe why some of the underlying commodities or ingredients are going up.

Speaker #1: Yeah. As you could imagine, as pricing going up, it is always a challenge for us to execute that with our retail partners, particularly in a category that's showing the softness that it is.

Speaker #1: Certain attributes of the pricing increase, like fuel-related or anything oil-related as part of our cost, it's pretty easy. And I think our customers understand what is driving that.

Jasper Sanfilippo: pretty easy, and I think our customers understand what is driving that. It gets more challenging when we have to describe why some of the underlying commodities or ingredients are going up. In addition to that and being sensitive to the category trends and the macroeconomic environment as Jeff mentioned, price pack architecture is key. The great thing is nuts are healthy and nutritious, and we need to do a better job at making those claims so as consumers go down the aisle, they can see the health benefits of nuts. I think what we are going to see going forward is a modification to our price pack architecture to get lower absolute purchase cost at retailers, as well as being able to put those claims on the packages so the consumers can see how healthy nuts and trail mix can be for you.

Speaker #1: It gets more challenging when we have to describe why some of the underlying commodities or the ingredients are going up. But in addition to that and being sensitive to the category trends and the macroeconomic environment, as Jeff mentioned, price pack architecture is key.

Jasper Sanfilippo: In addition to that and being sensitive to the category trends and the macroeconomic environment as Jeff mentioned, price pack architecture is key. The great thing is nuts are healthy and nutritious, and we need to do a better job at making those claims so as consumers go down the aisle, they can see the health benefits of nuts. I think what we are going to see going forward is a modification to our price pack architecture to get lower absolute purchase cost at retailers, as well as being able to put those claims on the packages so the consumers can see how healthy nuts and trail mix can be for you.

Speaker #1: The great thing is nuts are healthy and nutritious. We need to do a better job at making those claims. So as consumers go down the aisle, they can see the health benefits of nuts.

Speaker #1: And so, I think what we're going to see going forward is a modification to our price pack architecture to get lower absolute purchase cost at retailers, as well as being able to put those claims on the packages so that consumers can see how healthy nuts and trail mixes can be for you.

Ronald Materko: Mm-hmm. Okay, good. Thank you very much.

Speaker #4: Okay. Good. Thank you very much.

Jasper Sanfilippo: Thank you.

Jeffrey Sanfilippo: Thanks.

Speaker #1: Thank you.

Operator: I am showing no further questions at this time. I would now like to turn it back to Jasper for closing remarks.

Speaker #2: I am showing no further questions at this time. I would now like to turn it back to Jasper for closing remarks.

Jasper Sanfilippo: Thank you, Angelina. If there are no more questions, I want to thank you again for your interest in JBSS. This concludes the call for our Q1 of fiscal 2027 operating results. Have a great rest of your day.

Speaker #1: Thank you, Angelina. If there are no more questions, I want to thank you again for your interest in JBSS. This concludes the call for our first quarter of fiscal 2027 operating results.

Speaker #1: Have a great rest of your day.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.