J&J Snack Foods Corp. (NASDAQ:JJSF) Q1 2023 Earnings Call Transcript

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And then December kind of had maybe a little softer volume, maybe some consumer behavior shifts to some extent. I guess, as you sit here now, right, if we’re thinking about Q2 one, right, just point one, just because I do think you’re kind of lapping right, that ERP issue you had last year, I would think there’d be some nice margin progression. And then when we’re thinking about the back half of this year, kind of what I’m hearing, I feel like is like it’s still a little bit of a moving target, right? Some of this is going to be contingent, obviously, on consumer behavior as we get into this summer, right, which is still kind of far away. It sounds like some pricing might come through to offset some of the cost inflation. And then maybe there’s also some incremental distribution innovation that could help offset maybe some consumer weakness.

So lot in there. I’m just trying to gauge kind of where — how you want the market to be thinking about kind of that margin recovery potential this year. Or is it something that maybe we’re kind of — we’re just pushing it forward a little bit kind of because maybe there’s a little less clarity? That’s all I have. That’s a lot

Dan Fachner: Thank you, Rob.

Ken Plunk: Rob, you did my job for me, right?

Dan Fachner: You did it pretty well though.

Ken Plunk: Yes. I think, been clear as you had these meetings even going back to last quarter. We can go on a trajectory to get this business up to those 30% margins. As I sit here now, I still feel confident in our ability to do that, particularly as we get to Q3 and Q4, because I believe the things we’re doing, the initiatives, getting all those inflationary stuff behind us, getting in the peak season, and I think we’ll start to see volumes really kick back in and some of these new products and new ideas, new innovations are going to drive growth. So I still said here, seeing that as a pretty good benchmark, Rob. We manage this business long term. And if I could emphasize anything, as we come together each quarter, our jobs are to continue to demonstrate from an investment standpoint from where we’re driving growth, the long-term aspects of what we’re doing are going to pay dividends for us.

We then casually get into a quarter like this, where you get into some economic challenges and weather and that pulls back on volume and then you have to kind of recalibrate inventory reduction a little bit. And so that can hit a quarter, but still feel really good about the back half of the year.

Dan Fachner: Yes, Rob, I would echo that as well. And I would just also add to it that we still have some pricing coming on the ICEE side. We talked about that in another quarter. ICEE takes pricing once a year. And so there’s a pricing that was taken January 1 on the ICEE side. And so, yes, I think we’re still feeling pretty confident about getting back to those pre-COVID percentages. And that’s part of the conversation that we have amongst all of our groups and all of our conversations.

Robert Dickerson: Perfect. Super. Thank you so much.

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