What happened
Shares of John B. Sanfilippo & Son (JBSS 0.57%) were up 14% as of 1:52 p.m. ET on Thursday after reporting strong second-quarter earnings results.
The company posted a jump in sales of 24.7% year over year on the back of strong volumes. Strong sales volumes pushed profits up 41% over the year-ago quarter.
Year to date, the stock has now fallen 10.8%, which slightly outperforms the S&P 500 index.
So what
John B. Sanfilippo owns several brands of nuts and snack foods sold under Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts. The strong sales were credited to a 12.5% increase in average sales price per pound and a 10.9% increase in sales volume.
The company also successfully held the line on costs, with total operating expenses increasing only slightly to 11.7% as a percentage of sales in fiscal 2022 that ended in June. Despite higher costs in freight, compensation, and advertising, the company was successful in passing along costs to the consumer while still growing sales volume, reflecting a strong brand.
Now what
This consumer goods company has momentum, which is rare to see in 2022. While the company demonstrated some pricing power last quarter, it is starting to see some pressure to sales volumes in response to higher selling prices. Management warned this could impact performance in fiscal 2023.
Still, long-term investors have to love management's shareholder-friendly move: The company raised its annual dividend by 7% to $0.75 per share. It also announced a special dividend of $1.50 per share. Both of these payments will be paid to shareholders on Aug. 31 to those who owned shares as of Aug. 12.
