J&J Snack Foods Corp. (NASDAQ:JJSF) reported first-quarter results on Tuesday that came in below analyst expectations, but the stock rose nearly 3% as investors focused on improving margins and progress in the company’s transformation efforts.
Shares gained 2.94% after the release, despite weaker top-line performance.
For the quarter ended December 27, 2025, the snack food and frozen beverage producer posted adjusted earnings per share of $0.33, missing the consensus forecast of $0.37. Revenue declined 5.2% year over year to $343.8 million, also below analysts’ expectations of $365.79 million.
Profitability trends, however, moved in a positive direction. Gross margin expanded by 200 basis points to 27.9%, while adjusted EBITDA rose 7% year over year to $27 million, reflecting early benefits from the company’s “Project Apollo” transformation program.
“Our first quarter results reflect disciplined execution of our key priorities to drive profitability,” said Dan Fachner, J&J Snack Foods Chairman, President, and CEO. “We are pleased to deliver 7% year-over-year growth in adjusted EBITDA and a 200 basis point expansion in gross margin despite a 5.2% decline in sales and a $1 million expense for product disposal.”
The revenue shortfall was largely driven by strategic portfolio rationalization within the bakery segment, where sales fell by roughly 17%. In contrast, pretzel sales increased 6.9%, extending the positive momentum seen in the second half of fiscal 2025.
The retail supermarket business provided another area of strength, with sales rising 2.6% year over year to $45.9 million. Growth in this segment was fueled by a 35% jump in handheld product sales, as the company continued to recover from last year’s production disruptions caused by a facility fire.
During the quarter, J&J Snack Foods completed $42 million in share repurchases and authorized a new $50 million buyback program, underscoring management’s confidence in the company’s long-term strategy. The company also reaffirmed that it remains on track to achieve $20 million in annualized cost savings from its Project Apollo initiatives.