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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 26, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-19681
JOHN B. SANFILIPPO & SON, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
36-2419677
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
1703 North Randall Road
Elgin, Illinois
60123-7820
(Address of principal executive offices)
(Zip Code)
(847) 289-1800
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $.01 par value per share
JBSS
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 23, 2026,9,092,149 shares of the Registrant’s Common Stock, $.01 par value per share and 2,597,426 shares of the Registrant’s Class A Common Stock, $.01 par value per share, were outstanding.
(Dollars in thousands, except share and per share amounts)
March 26, 2026
June 26, 2025
March 27, 2025
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings
$
31,152
$
57,584
$
89,602
Current maturities of long-term debt, net, including related party debt of $867, $808 and $790, respectively and net of unamortized debt issuance costs of $16, $2 and $0 respectively
3,827
941
790
Accounts payable
73,092
60,479
51,966
Bank overdraft
726
294
942
Accrued payroll and related benefits
23,550
18,446
12,858
Other accrued expenses
20,824
18,302
17,833
TOTAL CURRENT LIABILITIES
153,171
156,046
173,991
LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $4,898, $5,557 and $5,765, respectively and net of unamortized debt issuance costs of $173, $123 and $0 respectively
40,672
14,564
5,765
Retirement plan
29,200
27,921
27,082
Long-term operating lease liabilities, net of current portion
21,933
24,224
25,304
Long-term workers' compensation liabilities
10,915
10,603
7,855
Deferred income taxes
3,638
—
—
Other
3,491
3,548
3,366
TOTAL LONG-TERM LIABILITIES
109,849
80,860
69,372
TOTAL LIABILITIES
263,020
236,906
243,363
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A Common Stock, convertible to Common Stock on a per share basis, cumulative voting rights of ten votes per share, $.01 par value; 10,000,000 shares authorized, 2,597,426 shares issued and outstanding
26
26
26
Common Stock, non-cumulative voting rights of one vote per share, $.01 par value; 17,000,000 shares authorized, 9,210,049, 9,161,348 and 9,161,348 shares issued, respectively
92
92
92
Capital in excess of par value
142,342
139,724
138,687
Retained earnings
245,829
221,495
207,968
Accumulated other comprehensive income
564
564
1,044
Treasury stock, at cost; 117,900 shares of Common Stock
(1,204
)
(1,204
)
(1,204
)
TOTAL STOCKHOLDERS’ EQUITY
387,649
360,697
346,613
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
$
650,669
$
597,603
$
589,976
The accompanying unaudited notes are an integral part of these consolidated financial statements.
(Dollars in thousands, except where noted and per share data)
Note 1 – Basis of Presentation and Description of Business
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC. Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
•
References herein to fiscal 2026 and fiscal 2025 are to the fiscal year ending June 25, 2026 and the fiscal year ended June 26, 2025, respectively.
•
References herein to the third quarter of fiscal 2026 and fiscal 2025 are to the quarters ended March 26, 2026 and March 27, 2025, respectively.
•
References herein to the first three quarters or first thirty-nine weeks of fiscal 2026 and fiscal 2025 are to the thirty-nine weeks ended March 26, 2026 and March 27, 2025, respectively.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of other food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products. We primarily sell our products under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
The accompanying unaudited financial statements fairly present the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of stockholders’ equity and consolidated statements of cash flows, and reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the results of the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
The interim results of operations are not necessarily indicative of the results to be expected for a full year. The balance sheet data as of June 26, 2025 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Accordingly, these unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2025 Annual Report on Form 10-K for the fiscal year ended June 26, 2025.
Note 2 – Revenue Recognition
We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. For each customer contract, a five-step process is followed in which we identify the contract, identify performance obligations, determine the transaction price, allocate the contract transaction price to the performance obligations, and recognize the revenue when (or as) the performance obligation is transferred to the customer.
When Performance Obligations Are Satisfied
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are primarily for the delivery of raw and processed recipe and snack nuts, nut butters, trail mixes and bars.
Our customer contracts do not include more than one performance obligation. If a contract were to contain more than one performance obligation, we are required to allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
Revenue recognition is generally completed at a point in time when product control is transferred to the customer. For virtually all of our revenues, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms. This allows the customer to then direct the use and obtain substantially all of the remaining benefits from the asset at that point in time. Therefore, the timing of our revenue recognition requires little judgment.
Variable Consideration
Some of our products are sold through specific incentive programs consisting of promotional allowances, volume and customer rebates, in-store display incentives and marketing allowances, among others, to consumer and some commercial ingredient customers. The ultimate cost of these programs is dependent on certain factors such as actual purchase volumes or customer activities. It is also dependent on significant management judgment when determining estimates. The Company accounts for these programs as variable consideration and recognizes a reduction in revenue (and a corresponding reduction in the transaction price) in the same period as the underlying program based upon the terms of the specific arrangements.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are also offered through various programs to customers and consumers. A provision for estimated trade promotions is recorded as a reduction of revenue (and a reduction in the transaction price) in the same period when the sale is recognized.Revenues are also recorded net of expected customer deductions, which are provided for based upon past experiences. Evaluating these estimates requires management judgment.
We generally use the most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of variable consideration when any related uncertainties are resolved with our customers. The Company reviews and updates its estimates and related accruals of variable consideration and trade promotions at least quarterly based on the terms of the agreements and historical experience. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe. Therefore, no additional constraint on the variable consideration is required.
Contract Balances
Contract assets or liabilities result from transactions with revenue recorded over time. If the measure of remaining rights exceeds the measure of the remaining performance obligations, the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. The contract asset balances as of June 26, 2025 was $159 and is recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance for any other periods presented. The Company generally does not have material deferred revenue or contract liability balances arising from transactions with customers.
Disaggregation of Revenue
Revenue disaggregated by sales channel is as follows:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
Distribution Channel
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Consumer
$
232,923
$
214,757
$
738,167
$
695,500
Commercial Ingredients
28,226
24,636
87,420
78,125
Contract Manufacturing
20,630
21,514
69,652
64,545
Total
$
281,779
$
260,907
$
895,239
$
838,170
Note 3 – Leases
Description of Leases
We lease warehouse space, equipment used in the transportation of goods in our warehouses, a limited number of automobiles and semi-trailers and a small office space. Our leases generally do not contain any explicit guarantees of residual value and, with the exception of the lease for our warehousing and distribution center in Huntley, IL, generally do not contain non-lease components. Our leases for warehouse transportation equipment generally require the equipment to be returned to the lessor in good working order.
Through a review of our contracts, we determine if an arrangement is a lease at inception and analyze the lease to determine if it is operating or finance. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. With the exception of our warehouse leases, none of our other leases currently contain options to extend the term. In the event of an option to extend the term of a lease, the lease term used in measuring the liability would include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term.Our leases have remaining terms of up to 6.7 years.
It is our accounting policy not to apply lease recognition requirements to short-term leases, defined as leases with an initial term of 12 months or less. As such, leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. We have also made the policy election to not separate lease and non-lease components for all leases.
The following table provides supplemental information related to operating lease right-of-use assets and liabilities:
March 26, 2026
June 26, 2025
March 27, 2025
Affected Line Item in Consolidated Balance Sheets
Assets
Operating lease right-of-use assets
$
25,768
$
27,824
$
28,871
Operating lease right-of-use assets
Total lease right-of-use assets
$
25,768
$
27,824
$
28,871
Liabilities
Current:
Operating leases
$
5,189
$
4,515
$
4,537
Other accrued expenses
Noncurrent:
Operating leases
21,933
24,224
25,304
Long-term operating lease liabilities
Total lease liabilities
$
27,122
$
28,739
$
29,841
The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Operating lease costs (a)
$
1,934
$
1,833
$
5,802
$
5,546
Variable lease costs (b)
15
627
713
933
Total lease cost
$
1,949
$
2,460
$
6,515
$
6,479
(a)
Includes short-term leases, which are immaterial.
(b)
Variable lease costs consist of property taxes, sales tax and insurance.
Supplemental cash flow and other information related to leases were as follows:
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities
$
4,743
$
4,166
Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations
Maturities of operating lease liabilities as of March 26, 2026 are as follows:
Fiscal Year Ending
June 25, 2026 (excluding the thirty-nine weeks ended March 26, 2026)
$
1,802
June 24, 2027
6,663
June 29, 2028
6,518
June 28, 2029
5,611
June 27, 2030
4,741
June 26, 2031
4,217
Thereafter
2,446
Total lease payments
31,998
Less imputed interest
(4,876
)
Present value of operating lease liabilities
$
27,122
On January 15, 2026, the Company executed a 10 year lease for the additional warehouse space of approximately 285,000 square feet in Huntley, IL. The original warehouse space of approximately two thirds of the building was leased starting in fiscal 2024 near our largest facility in Elgin, IL (the “Elgin Site”), and the execution of this lease will result in us renting the entire building. The warehouse as a whole will be primarily utilized to store finished goods inventory and as a distribution center along with light manufacturing. Since the lease for the remaining space has not yet commenced, approximately $17,851of additional operating leases are not reflected in the Consolidated Balance Sheet and tables above. The lease for the remaining space in Huntley is scheduled to commence in the first quarter of fiscal 2027.
Lessor Accounting
We lease office space in our four-story office building located in Elgin, IL. As a lessor, we retain substantially all of the risks and benefits of ownership of the investment property. Under Topic 842: Leases, we continue to account for all of our leases as operating leases. Lease agreements may include options to renew. We accrue fixed lease income on a straight‑line basis over the terms of the leases. There is generally no variable lease consideration and an immaterial amount of non-lease components such as recurring utility and storage fees. Leases between related parties are immaterial.
Leasing revenue is as follows:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Lease income related to lease payments
$
252
$
228
$
725
$
1,185
The future minimum, undiscounted fixed cash flows under non-cancelable tenant operating leases for each of the next five years and thereafter are as follows:
Fiscal Year Ending
June 25, 2026 (excluding the thirty-nine weeks ended March 26, 2026)
Identifiable intangible assets that are subject to amortization consist of the following:
March 26, 2026
June 26, 2025
March 27, 2025
Customer relationships
$
21,350
$
21,350
$
21,350
Brand names
17,070
17,070
17,070
Product formulas
850
850
850
Non-compete agreement
300
300
300
39,570
39,570
39,570
Less accumulated amortization:
Customer relationships
(21,350
)
(21,179
)
(21,094
)
Brand names
(13,920
)
(13,388
)
(13,206
)
Product formulas
(402
)
(283
)
(242
)
Non-compete agreement
(300
)
(292
)
(288
)
(35,972
)
(35,142
)
(34,830
)
Net intangible assets
$
3,598
$
4,428
$
4,740
Customer relationships were amortized on an accelerated basis. The brand names remaining to be amortized consist of the Squirrel Brand and Southern Style Nuts brand names. The non-compete agreement became fully amortized in the second quarter of fiscal 2026.
Total amortization expense related to intangible assets, which is classified in “administrative expenses” in the Consolidated Statement of Comprehensive Income, was $212 and $830 for the quarter and thirty-nine weeks ended March 26, 2026, respectively. Amortization expense for the remainder of fiscal 2026 is expected to be approximately $212 and expected amortization expense the next five fiscal years is as follows:
Fiscal Year Ending
June 24, 2027
$
847
June 29, 2028
677
June 28, 2029
496
June 27, 2030
400
June 26, 2031
400
Our net goodwill at March 26, 2026 was comprised of $9,650 from the fiscal 2018 Squirrel Brand acquisition and $2,100 from the fiscal 2023 Just the Cheese brand acquisition. The changes in the carrying amount of goodwill since June 27, 2024 are as follows:
Our Amended and Restated Credit Agreement dated March 5, 2020, as amended most recently on June 16, 2025, provides for a $150,000 senior secured revolving credit facility (the “Credit Facility”) and has a maturity date of September 29, 2028. The Credit Facility is secured by our accounts receivable and inventory.
At March 26, 2026, we had $113,593 of available credit under the Credit Facility reflecting borrowings of $31,152 and reduced availability as a result of $5,255 in outstanding letters of credit. As of March 26, 2026, we were in compliance with all financial covenants under the Credit Facility.
Note 7 – Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50,000 for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedules and is secured under a Security Agreement that provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty equal monthly payments comprised of principal and interest starting upon equipment acceptance and distribution of the final loan proceeds, which is expected to occur in the first half of fiscal 2027. The fixed interest rate (Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 1.49%) will be calculated at that point in time as well. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within 36 months of commencement. The Company is making monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds, which is being capitalized as part of the equipment acquisition cost.
As of March 26, 2026 and June 26, 2025 there was $38,923 and $9,265, respectively, of the debt obligation under the Equipment Loan outstanding. Interest capitalized was $478 and $1,194 for the quarter and thirty-nine weeks ended March 26, 2026, respectively. No interest was capitalized for the quarter and thirty-nine weeks ended March 27, 2025 because no significant project required such capitalization.
Note 8 – Earnings Per Common Share
The following table presents the reconciliation of the weighted average shares outstanding used in computing basic and diluted earnings per share:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Weighted average number of shares outstanding – basic
11,716,987
11,669,939
11,692,775
11,650,378
Effect of dilutive securities:
Restricted stock units
81,368
65,770
68,885
70,676
Weighted average number of shares outstanding – diluted
11,798,355
11,735,709
11,761,660
11,721,054
There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.
The following is a summary of Restricted Stock Unit (“RSU”) activity for the first thirty-nine weeks of fiscal 2026:
Restricted Stock Units
Shares
Weighted Average Grant Date Fair Value
Outstanding at June 26, 2025
158,824
$
72.77
Granted
90,496
$
60.95
Vested (a)
(54,528
)
$
74.18
Forfeited
(6,609
)
$
74.60
Outstanding at March 26, 2026
188,183
$
66.61
(a)
The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.
At March 26, 2026, there were 27,390 RSUs outstanding that were vested but deferred.
The following is a summary of Performance Stock Unit (“PSU”) activity for the first thirty-nine weeks of fiscal 2026:
Performance Stock Units (a)
Shares
Weighted Average Grant Date Fair Value
Outstanding at June 26, 2025
17,299
$
76.79
Granted
12,499
$
57.24
Vested
—
$
—
Forfeited
(503
)
$
77.18
Outstanding at March 26, 2026
29,295
$
68.45
(a)
The PSUs are presented based on achieving target performance. The PSUs vest approximately three years from the grant date, with the number of shares earned (ranging from 0% to 200% of the target award) depending on the extent to which we achieve certain performance metrics. Based on current expectations and performance against these metrics, we expect 12,499 PSUs to be earned and thus vest at the end of the applicable vesting periods. The final number of shares that will eventually be earned and vest (if any) has not yet been determined as of March 26, 2026.
The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Stock-based compensation expense
$
708
$
835
$
3,032
$
3,486
As of March 26, 2026, there was $6,109 of total unrecognized compensation expense related to non-vested RSUs and PSUs granted under our stock-based compensation plans. We expect to recognize that cost over a weighted average period of 1.7 years.
The Supplemental Employee Retirement Plan (“Retirement Plan”) is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. The monthly benefit is based upon each participant’s earnings and his or her number of years of service. The components of net periodic benefit cost are as follows:
For the Quarter Ended
For the Thirty-Nine Weeks Ended
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Service cost
$
141
$
129
$
422
$
387
Interest cost
389
362
1,167
1,084
Net periodic benefit cost
$
530
$
491
$
1,589
$
1,471
The components of net periodic benefit cost, other than the service cost component, are included in the line item “Pension expense (excluding service costs)” in the Consolidated Statements of Comprehensive Income.
Note 11 – Commitments and Contingent Liabilities
We are currently a party to various legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcomes of these proceedings, individually and in the aggregate, will not materially affect our financial position, results of operations or cash flows, legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur. Unfavorable outcomes could include substantial monetary damages in excess of any appropriate accruals management has established. Were such unfavorable final outcomes to occur, there exists the possibility of a material adverse effect on our financial position, results of operations and cash flows.
Note 12 – Fair Value of Financial Instruments
The Financial Accounting Standards Board (the “FASB”) defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
Level 1
–
Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2
–
Observable inputs other than quoted prices in active markets. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3
–
Unobservable inputs for which there is little or no market data available.
The carrying values of cash, trade accounts receivable and accounts payable approximate their fair values at each balance sheet date because of the short-term maturities and nature of these balances.
The carrying value of our revolving credit facility borrowings approximates fair value at each balance sheet date because interest rates on this instrument approximate current market rates (Level 2 criteria) and because of the short-term maturity and nature of this balance. In addition, there has been no significant change in our inherent credit risk.
The following table summarizes the carrying value and fair value estimate of our current and long-term debt, excluding unamortized debt issuance costs:
March 26, 2026
June 26, 2025
March 27, 2025
Carrying value of current and long-term debt:
$
44,688
$
15,630
$
6,555
Fair value of current and long-term debt:
43,573
15,329
6,348
The estimated fair value of our current and long-term debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on interest rates currently offered on loans with similar terms to borrowers of similar credit quality or broker quotes. In addition, there have been no significant changes in the underlying assets securing our long-term debt.
The Company’s chief operating decision maker (“CODM”) is comprised of the chief executive officer and chief operating officer who review financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, we operate in a single reporting unit and operating segment that consists of selling various nut and nut related products and bars through three distribution channels, almost entirely within the United States. A description of how the Company derives revenues is included in Note 2 – “Revenue Recognition”.
The CODM uses consolidated net income as the measure of segment profit or loss to make key operating decisions, monitor budget versus actual results and allocate resources. The CODM compares net income to prior year to assess year-over-year growth of the Company and compares net income to budget to evaluate how the Company is performing against internal expectations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets. Depreciation, amortization and purchases of property, plant and equipment are reported at the consolidated level on the Consolidated Statements of Cash Flows. The significant segment expenses regularly provided to the CODM are those presented on our Consolidated Statements of Comprehensive Income. These significant expenses include cost of sales, selling expenses and administrative expenses. Other segment items include interest expense, net rental and miscellaneous expense, pension expense and income tax expense on the Consolidated Statements of Comprehensive Income.
Depreciation expense was $6,825 and $20,384 for the quarter and thirty-nine weeks ended March 26, 2026, respectively and $6,426 and $18,814 for the quarter and thirty-nine weeks ended March 27, 2025, respectively.
Note 14 – Recent Accounting Pronouncements and Tax Legislation
The following recent accounting pronouncements have not yet been adopted:
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024. The requirements of this amendment will first be applied in our upcoming Form 10-K filing for the fiscal year ending June 25, 2026, and will be applied prospectively. We are currently evaluating the impact of this disclosure update but do not expect it to have a material impact on our Consolidated Financial Statements.
In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses”. The amendments in this update require disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments are effective for public entities for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this update on our related disclosures.
The following tax law was enacted this fiscal year:
Public Law No. 119-21, commonly known as the One, Big, Beautiful Bill Act (the “Act”), was signed into law on July 4, 2025. The Act contains significant tax law changes with various effective dates affecting business taxpayers, including the Company. Among the tax law changes that will impact the Company relate to the acceleration of certain tax deductions including depreciation expense and research and development expenditures. This has led to lower cash tax payments in the near term combined with an increase in our deferred tax liability. The Company implemented the Act’s tax law changes in the first quarter of fiscal 2026. The Company does not anticipate any impact to its overall tax expense, but the Act will impact the allocation of tax expense between current and deferred.
Note 15 — Subsequent Event
On March 30, 2026, our Board of Directors declared a special cash dividend of $1.50 per share on all issued and outstanding shares of Common Stock and Class A Stock of the Company (the “April 2026 Dividends”). The April 2026 Dividends will be paid on May 21, 2026 to stockholders of record as of the close of business on April 27, 2026.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements.
Our fiscal year ends on the final Thursday of June each year, and typically consists of fifty-two weeks (four thirteen-week quarters). Additional information on the comparability of the periods presented is as follows:
•
References herein to fiscal 2026 and fiscal 2025 are to the fiscal year ending June 25, 2026 and the fiscal year ended June 26, 2025, respectively.
•
References herein to the third quarter of fiscal 2026 and fiscal 2025 are to the quarters ended March 26, 2026 and March 27, 2025, respectively.
•
References herein to the first three quarters or first thirty-nine weeks of fiscal 2026 and fiscal 2025 are to the thirty-nine weeks ended March 26, 2026 and March 27, 2025, respectively.
As used herein, unless the context otherwise indicates, the terms “we”, “us”, “our” or “Company” collectively refer to John B. Sanfilippo & Son, Inc. and our wholly-owned subsidiary, JBSS Ventures, LLC.
We are one of the leading processors and distributors of peanuts, pecans, cashews, walnuts, almonds and other nuts in the United States. We also manufacture and distribute a portfolio of snack and nutrition bars (“bars”), and market and distribute, and in most cases, manufacture or process, a diverse product line of other food and snack products, including peanut butter, almond butter, cashew butter, candy and confections, snack and trail mixes, granola, sunflower kernels, dried fruit, corn snacks, sesame sticks and other sesame snack products. We primarily sell our products under a variety of private brand names, as well as under our Fisher, Orchard Valley Harvest, Squirrel Brand and Southern Style Nuts brand names. Our products are sold through three core distribution channels, including food retailers in the consumer channel, commercial ingredient users and contract manufacturing customers.
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 via insight-driven product and packaging innovation. Execution of this plan is anchored in delivering value-added solutions and high-quality, innovative products based on our extensive industry and consumer expertise. Growth in private brand bars will be supported by capacity expansion and a robust innovation pipeline, with continued focus on nutrition 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, including club stores and e-commerce. Promotional and advertising investments are being prioritized to drive branded volume growth, supported by an omni-channel strategy across recipe nuts, snack nuts and trail mix. Our Long-Range Plan includes growth through product and packaging innovation and targeted, opportunistic acquisitions. To support these initiatives, beginning in the second quarter of fiscal 2025 and continuing into fiscal 2027, we are making significant capital investments in equipment and infrastructure improvements to expand our production capabilities, improve efficiency and enhance product offerings for our customers.
We continue to face ongoing operational and regulatory challenges, including food safety and compliance requirements, maintaining and expanding our customer base and driving growth across private brand and branded categories. Shifts or declines in consumer demand within a highly competitive snack product environment, combined with macroeconomic uncertainty, could adversely impact our ability to execute our Long-Range Plan.
Additional challenges include, higher food and input costs driven by increasing underlying commodity acquisition costs as well as the actual, potential or threatened U.S. and foreign tariffs on key commodities, raw materials and manufacturing equipment. Ongoing uncertainty around global conflict in the Middle East and interest rates may further impact economic growth and consumer spending resulting in reduced demand for private brand and branded snack products, including snack nuts, trail mix and bars. We also continue to operate amid intense industry competition, potential economic downturns in the markets in which we operate and ongoing supply chain volatility. To stay compliant with recent changes in employment laws across states where we operate and remain competitive in attracting qualified talent, we expect our labor costs to continue to increase.
We continue to face changing marketplace trends that are impacting our categories. Retail prices across snack nuts and trail mix have generally risen due to increased commodity costs and evolving global trade agreements. These higher prices, paired with general economic uncertainty, are causing consumers to purchase fewer snack products. As a result, sales volumes for snack nuts, recipe nuts, trail mix and mainstream bars are declining for the Company and the industry overall. In addition, some of our larger snack food competitors have recently focused on lower prices for certain snack foods which could be a substitute for our products. Many consumers are shifting to private brands, more affordable nuts or bars or choosing snacks outside these categories altogether. Consumers are also shifting to more value-focused retailers, such as mass merchandising retailers and club stores, not all of which we distribute or sell to. Additionally, emerging health and wellness trends, use of GLP-1 drugs and other consumer health priorities may also impact consumers' purchasing behavior, including decreased purchasing of snack foods. In response, we are focusing on our strengths by leveraging our expertise in snack nut and trail mix and bars categories, improving efficiency, innovating in product and packaging and carefully managing trade spending and pricing to support our products.
Tariffs, Supply Chain and Transportation
Global supply chain pressures have eased compared to past fiscal years. However, intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated during fiscal 2026. However there is still uncertainty within the supply chain from the U.S. government's tariffs policy on imports from foreign countries and corresponding retaliatory tariffs from foreign countries. Any incremental import tariffs will increase the cost of certain raw materials we use in our business, and our financial performance may be adversely impacted if we cannot pass on the cost increases in the form of price increases to our customers. In November 2025, the U.S. government removed tariffs for several food categories, including cocoa and cashews among others, which have no domestic production.
In February 2026, the U.S. Supreme Court ruled that tariffs imposed by executive order under the International Emergency Economic Powers Act exceeded U.S. Presidential authority. Subsequently, the Court of International Trade ordered U.S. Customs and Border Patrol to develop a framework for refunding such tariffs. Following the Supreme Court ruling, the President implemented a temporary worldwide baseline tariff of 10% under Section 122 of the Trade Act of 1974 (the “Trade Act”). These tariffs are time limited and set to expire in early fiscal 2027 if they are not extended by act of Congress. In March 2026, the US Trade Representative launched two investigations under Section 301 of the Trade Act into numerous trading partners which may build the legal foundation to impose or expand tariffs for those countries. The ultimate impact of tariffs may be difficult to predict as their amount and duration are uncertain, making our planning process more difficult. The threat of tariffs may also have adverse implications to our business and the business of our suppliers and customers. We typically are not the importers of record for commodities that we procured from non-U.S. sources. It is uncertain when or if any eventual tariff refunds our vendors receive may be passed onto us. We are the importers of record for the capital equipment we are purchasing from European vendors and have paid approximately $4.0 million in tariffs on equipment thus far. Due to the uncertainty of any future refund, we have not yet recorded a receivable for these tariffs paid. We are monitoring ongoing developments with respect to the refund process and have taken and intend to take appropriate steps to file a refund claim during the fourth quarter of fiscal 2026.
While we do not have direct exposure to suppliers in Russia, Ukraine, Iran or Israel, the conflicts and prospects for conflict in these regions could continue to result in volatile commodity markets, supply chain disruptions and increased costs, including energy and shipping costs.
Trucking capacity continues to slowly decline, potentially leading to further instability in the transportation industry. While indicators suggest transportation prices are stabilizing, the overall transportation environment remains unpredictable. Additionally, fuel prices have been unpredictable and may vary depending on economic activity in the areas where we ship and receive goods as well as prevailing oil prices. We have seen fuel prices increase due to recent military operations in Iran, which have led to significant spikes in crude oil. Fuel prices could continue to remain volatile as the conflict persists.
Among our most significant ingredient requirements are cocoa products, dried fruits, sweeteners, vegetable oils, rolled oats, flour and dairy. Many of these materials and their associated costs are subject to price fluctuations from several factors, including changing commodity markets, other market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), ongoing political instability and other factors beyond our control.
The cocoa supply-demand outlook is improving following consecutive years of supply deficits, while consumption has declined due to elevated price levels over the past two years. Additionally, as costs increase due to these circumstances or due to overall inflationary pressures, there is a further risk we cannot pass (in part or in full) such potential cost increases on to our customers or in a timely manner. If we cannot align our input costs with prices for our products, our financial performance could be adversely impacted.
We focus on remaining agile by identifying risks proactively, modifying inventory and production plans and diversifying our supplier base to mitigate risk of customer order shortages and our supply chain. We continue to proactively manage our business in response to the evolving global economic environment and related uncertainties and intend to take steps to further mitigate impacts to our supply chain as they develop. If unforeseen supply chain pressures emerge or worsen, or we cannot obtain the transportation and labor services needed to obtain raw materials or fulfill customer orders, such shortages and supply chain issues could have an unfavorable impact on net sales and our operations in the remaining quarter of fiscal 2026.
Our net sales of $281.8 million for the third quarter of fiscal 2026 increased $20.9 million, or 8.0%, from our net sales of $260.9 million for the third quarter of fiscal 2025. Net sales for the first thirty-nine weeks of fiscal 2026 increased by $57.1 million, or 6.8%, to $895.2 million compared to the first thirty-nine weeks of fiscal 2025.
Sales volume, measured as pounds sold to customers, decreased 0.3% compared to the third quarter of fiscal 2025. Sales volume for the first thirty-nine weeks of fiscal 2026 decreased 3.7% compared to the first thirty-nine weeks of fiscal 2025.
Gross profit decreased $2.1 million, and our gross profit margin, as a percentage of net sales, decreased to 19.1% for the third quarter of fiscal 2026, compared to 21.4% for the third quarter of fiscal 2025. Gross profit increased $12.3 million, and our gross profit margin increased to 18.7% from 18.5% for the first thirty-nine weeks of fiscal 2026 compared to the first thirty-nine weeks of fiscal 2025.
Total operating expenses for the third quarter of fiscal 2026 increased by $2.3 million, or 8.3%, compared to the third quarter of fiscal 2025. As a percentage of net sales, total operating expenses was 10.6% for both the third quarter of fiscal 2026 and fiscal 2025. Total operating expenses for the first thirty-nine weeks of fiscal 2026 increased by $0.1 million, or 0.2%, compared to the first thirty-nine weeks of fiscal 2025. As a percentage of net sales, total operating expenses for the first thirty-nine weeks of fiscal 2026 decreased to 10.1% from 10.8% for the first thirty-nine weeks of fiscal 2025.
The total value of inventories on hand at the end of the third quarter of fiscal 2026 decreased $5.2 million, or 2.0%, compared to the total value of inventories on hand at the end of the third quarter of fiscal 2025.
We have seen acquisition costs for most major nut types, except for walnuts and peanuts, increase in the 2025 crop year (which falls into our current 2026 fiscal year). We completed procurement of inshell walnuts during the first half of fiscal 2026 and the final total payments due to our walnut growers were determined in the current quarter. The final prices paid, and remaining to be paid to the walnut growers, were based upon current market prices and other factors, such as crop size and export demand. A large majority of payments to walnut growers were completed in the third quarter of fiscal 2026. Remaining amounts to be paid to walnut growers as of March 26, 2026 are final and are not subject to revision. We decreased our walnut grower liability by approximately $2.8 million during the third quarter of fiscal 2026, as the final payments due to walnut growers are slightly less than the amounts estimated at the end of the second quarter. This decrease is insignificant compared to our total inshell walnut procurement costs for the year, and the portion of the adjustment to cost of sales was immaterial to our results of operations.
In the third quarter of fiscal 2026, our net sales increased 8.0% to $281.8 million, compared to net sales of $260.9 million for the third quarter of fiscal 2025. The net sales increase was primarily driven by an 8.3% increase in weighted average selling price per pound, which was primarily due to pricing actions taken in response to higher commodity acquisition costs for all major tree nuts and peanuts as well as a shift in product mix toward higher priced items in the current quarter. Sales volume, which is defined as pounds sold to customers, remained essentially flat. Sales volume declined for substantially all major product types in the third quarter but increased for walnuts, pecans and mixed nuts.
For the first thirty-nine weeks of fiscal 2026 our net sales were $895.2 million, an increase of $57.1 million, or 6.8%, compared to the same period of fiscal 2025. The increase in net sales was attributable to an 11.0% increase in the weighted average selling price per pound, which was primarily due to pricing actions taken in response to higher commodity acquisition costs for all major tree nuts. Sales volume decreased 3.7% compared to the same period in the prior fiscal year. Sales volume declined for substantially all major product types but increased for walnuts, pecans and peanuts.
The following table summarizes sales by product type as a percentage of total gross sales. The information is based upon gross sales, rather than net sales, because certain adjustments, such as promotional discounts, are not allocable to product type.
For the Quarter Ended
For the Thirty-Nine Weeks Ended
Product Type
March 26, 2026
March 27, 2025
March 26, 2026
March 27, 2025
Peanuts & Peanut Butter
15.9
%
16.6
%
15.2
%
16.1
%
Pecans
6.8
6.4
10.4
10.1
Cashews & Mixed Nuts
18.8
18.3
18.5
17.6
Walnuts
6.3
4.3
6.9
4.7
Almonds
8.3
7.7
7.4
7.1
Trail & Snack Mixes
25.3
25.1
24.0
24.3
Bars
12.9
15.3
12.1
14.1
Other
5.7
6.3
5.5
6.0
Total
100.0
%
100.0
%
100.0
%
100.0
%
The following table shows a comparison of net sales by distribution channel (dollars in thousands):
For the Quarter Ended
Distribution Channel
March 26, 2026
Percentage of Total
March 27, 2025
Percentage of Total
$ Change
% Change
Consumer (1)
$
232,923
82.7
%
$
214,757
82.4
%
$
18,166
8.5
%
Commercial Ingredients
28,226
10.0
24,636
9.4
3,590
14.6
%
Contract Manufacturing
20,630
7.3
21,514
8.2
(884
)
(4.1
)%
Total
$
281,779
100.0
%
$
260,907
100.0
%
$
20,872
8.0
%
(1)
Sales of branded products were approximately 13% of total consumer sales for both the third quarter of fiscal 2026 and fiscal 2025. Fisher branded products were approximately 53% and 56% of branded sales during the third quarter of fiscal 2026 and fiscal 2025, respectively, with Orchard Valley Harvest and Southern Style Nuts brandedproducts accounting for the majority of the remaining branded product sales.
The following table shows a comparison of net sales by distribution channel (dollars in thousands):
For the Thirty-Nine Weeks Ended
Distribution Channel
March 26, 2026
Percentage of Total
March 27, 2025
Percentage of Total
$ Change
% Change
Consumer (1)
$
738,167
82.4
%
$
695,500
83.0
%
$
42,667
6.1
%
Commercial Ingredients
87,420
9.8
78,125
9.3
9,295
11.9
%
Contract Manufacturing
69,652
7.8
64,545
7.7
5,107
7.9
%
Total
$
895,239
100.0
%
$
838,170
100.0
%
$
57,069
6.8
%
(1)
Sales of branded products were approximately 16% and 17% of total consumer sales during the first thirty-nine weeks of fiscal 2026 and fiscal 2025, respectively. Fisher branded products were approximately 68% and 63% of branded sales during the first thirty-nine weeks of fiscal 2026 and fiscal 2025, respectively, with Orchard Valley Harvest and Southern Style Nuts brandedproducts accounting for the majority of the remaining branded product sales.
Net sales in the consumer distribution channel increased $18.2 million, or 8.5%, and sales volume decreased 4.5% in the third quarter of fiscal 2026, compared to the third quarter of fiscal 2025. The sales volume decrease was driven by a 5.3% decrease in private brand sales volume due to lower volume in bars while nuts and trail mix sales volume remained relatively flat. Bar sales were impacted by continued category softness at a mass merchandise retailer. Our strategic decision to reduce sales to a grocery store retailer also contributed to the overall decline in bar volume. Nuts and trail mix volume was impacted by elevated retail prices, reduced promotional activity and discontinuation of underperforming items. These declines were largely offset by new private brand walnut business with an existing customer and increased sales resulting from promotional pricing on walnuts and peanuts at an online retailer. Branded sales volume increased 3.3% due to limited opportunistic orders of Orchard Valley Harvest at a major non-food customer.
In the first thirty-nine weeks of fiscal 2026, net sales in the consumer distribution channel increased $42.7 million, or 6.1%, and sales volume decreased 6.1% compared to the same period of fiscal 2025. The sales volume decrease was driven by a 5.5% decrease in private brand sales volume due to lower volume in bars, nuts and trail mix, and peanut butter. Private brand bars declined due the reasons cited in the quarterly comparison. Nuts and trail mix volume was impacted by the reasons cited in the quarterly comparison. Peanut butter declined primarily due to a product discontinuation at a mass merchandiser. Branded sales volume decreased 10.2% due to lost distribution of Orchard Valley Harvest at a major non-food customer.
Net sales in the commercial ingredients distribution channel increased $3.6 million, or 14.6%, and sales volume increased by 14.3% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025. The sales volume increase was due to higher food services sales at existing customers and sales to two new customers. Increased sales of peanut crushing stock also contributed to the overall growth.
In the first thirty-nine weeks of fiscal 2026, net sales in the commercial ingredients distribution channel increased $9.3 million, or 11.9%, and sales volume increased 8.6% compared to the same period of fiscal 2025. The sales volume increase was due to the reasons cited in the quarterly comparison.
Net sales in the contract manufacturing distribution channel decreased $0.9 million, or 4.1%, and sales volume increased 16.5% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025. The increase in sales volume was primarily driven by increased sales to a customer added during the second quarter of fiscal 2025. This customer currently provides the majority of the raw ingredients for these products, and the Company processes and packages these products. This increase was partially offset by decreased granola sales volume.
In the first thirty-nine weeks of fiscal 2026, net sales in the contract manufacturing distribution channel increased $5.1 million, or 7.9%, and sales volume decreased 1.0% compared to the same period of fiscal 2025. The sales volume decrease was due to decreased granola sales volume and lower peanut butter sales volume to a major customer. This was largely offset by increased snack nut sales cited in the quarterly comparison.
Gross Profit
Gross profit decreased $2.1 million, or 3.8%, to $53.8 million for the third quarter of fiscal 2026, compared to $55.9 million for the third quarter of fiscal 2025. The decrease in gross profit was primarily due to significantly lower inventory valuation adjustments compared to the third quarter of fiscal 2025, which was partially offset by higher net sales. Our gross profit margin, as a percentage of net sales, decreased to 19.1% for the third quarter of fiscal 2026 compared to 21.4% for the third quarter of fiscal 2025, mainly due to the factors mentioned previously.
Gross profit was $167.0 million for the first thirty-nine weeks of fiscal 2026 compared to $154.7 million for the first thirty-nine weeks of fiscal 2025 due to pricing more closely aligned with commodity acquisition costs and a one time pricing concession in the first quarter of fiscal 2025 for a bars customer which did not recur in fiscal 2026. Our gross profit margin, as a percentage of net sales, increased to 18.7% for the first thirty-nine weeks of fiscal 2026 compared to 18.5% for the first thirty-nine weeks of fiscal 2025.
Operating Expenses
Total operating expenses for the third quarter of fiscal 2026 increased $2.3 million, or 8.3%, to $30.0 million. Operating expenses were 10.6% of net sales for both the third quarter of fiscal 2026 and fiscal 2025.
Selling expenses for the third quarter of fiscal 2026 were $19.3 million, an increase of $0.6 million, or 3.4%, from the third quarter of fiscal 2025. The increase was driven by a $1.5 million increase in incentive compensation expense and $0.3 million increase in commissions expense. These increases were largely offset by a $0.6 million decrease in rent expense and a $0.5 million decrease in salary expenses.
Administrative expenses for the third quarter of fiscal 2026 increased $1.7 million, or 18.3%, to $10.7 million, compared to $9.1 million for the third quarter of fiscal 2025. The increase was due to a $2.7 million increase in incentive compensation expense. The increase was slightly offset by a $0.5 million gain on the sale of non-core equipment, a $0.3 million decrease in food donations and a $0.2 million decrease in equity compensation.
Total operating expenses for the first thirty-nine weeks of fiscal 2026 increased slightly to $90.3 million. Operating expenses as a percentage of net sales decreased to 10.1% for the first thirty-nine weeks of fiscal 2026, compared to 10.8% for the first thirty-nine weeks of fiscal 2025.
Selling expenses for the first thirty-nine weeks of fiscal 2026 were $58.3 million, a decrease of $2.8 million, or 4.6%, from the first thirty-nine weeks of fiscal 2025. The decrease was driven primarily by a $2.0 million decrease in advertising and consumer insight research expense, a $1.5 million decrease in salary expense, a $1.4 million decrease in third-party warehouse costs and a $1.0 million decrease in freight expense. These were partially offset by a $3.2 million increase in incentive compensation expense.
Administrative expenses for the first thirty-nine weeks of fiscal 2026 increased $2.9 million, or 10.1%, to $32.0 million compared to the first thirty-nine weeks of fiscal 2025. The increase was primarily due to a $5.6 million increase in incentive compensation expense. This was partially offset by a $1.1 million favorable change in gain/loss on asset disposals, a $0.7 million decrease in personnel and recruitment expenses and a $0.5 million decrease in salary and equity compensation expenses.
Income from Operations
Due to the factors discussed above, income from operations was $23.8 million, or 8.4% of net sales, for the third quarter of fiscal 2026, compared to $28.2 million, or 10.8% of net sales, for the third quarter of fiscal 2025.
Due to the factors discussed above, income from operations was $76.8 million, or 8.6% of net sales, for the first thirty-nine weeks of fiscal 2026, compared to $64.6 million, or 7.7% of net sales, for the first thirty-nine weeks of fiscal 2025.
Interest Expense
Interest expense was $0.5 million for the third quarter of fiscal 2026, compared to $1.1 million for the third quarter of fiscal 2025 due to lower average line of credit debt levels.
Interest expense was $2.0 million for the first thirty-nine weeks of fiscal 2026, compared to $2.3 million for the first thirty-nine weeks of fiscal 2025.
Rental and Miscellaneous Expense, Net
Net rental and miscellaneous expense was $0.6 million for both the third quarter of fiscal 2026 and fiscal 2025.
Net rental and miscellaneous expense was $1.7 million for the first thirty-nine weeks of fiscal 2026, compared to $1.4 million for the first thirty-nine weeks of fiscal 2025, primarily due to the departure of a tenant upon lease expiration at our Elgin Site.
Pension Expense (Excluding Service Costs)
Pension expense (excluding service costs) was $0.4 million for both the third quarter of fiscal 2026 and fiscal 2025.
Pension expense (excluding service costs) was $1.2 million for the first thirty-nine weeks of fiscal 2026, compared to $1.1 million for the first thirty-nine weeks of fiscal 2025.
Income Tax Expense
Income tax expense was $5.4 million, or 24.4% of income before income taxes, for the third quarter of fiscal 2026, compared to $6.0 million, or 22.9% of income before income taxes, for the third quarter of fiscal 2025. The increase in the effective tax rate is primarily due to an increase in the disallowed deduction related to officer compensation.
Income tax expense was $18.3 million, or 25.5% of income before income taxes, for the first thirty-nine weeks of fiscal 2026 compared to $14.3 million, or 24.0% of income before income taxes, for the first thirty-nine weeks of fiscal 2025. The increase in the effective tax rate is primarily due to the reason cited in the quarterly comparison.
Net Income
Net income was $16.8 million, or $1.44 per common share basic and $1.43 per common share diluted, for the third quarter of fiscal 2026, compared to $20.2 million, or $1.73 per common share basic and $1.72 per common share diluted, for the third quarter of fiscal 2025.
Net income was $53.5 million, or $4.58 per common share basic and $4.55 per common share diluted, for the first thirty-nine weeks of fiscal 2026, compared to $45.4 million, or $3.90 per common share basic and $3.87 per common share diluted, for the first thirty-nine weeks of fiscal 2025.
LIQUIDITY AND CAPITAL RESOURCES
General
The primary uses of cash are to fund our current operations, fulfill contractual obligations, pursue our Long-Range Plan through growing our branded and private brand nut and bar businesses, consummate and integrate business acquisitions, return cash to our stockholders through dividends, repay indebtedness and pay amounts owed under the Retirement Plan. Also, various uncertainties, including cost uncertainties, could result in additional or unexpected uses of cash. The primary sources of cash are results of operations and availability under our Credit Facility. Beginning in fiscal 2025 and continuing into fiscal 2027, we will invest approximately $90.0 million in capital expenditures and related expenses, excluding any applicable tariffs, to acquire and install equipment, and make related infrastructure improvements to expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers. Approximately half of these expenditures are payable to equipment vendors located in Europe, and most of those payments will be denominated in foreign currency. Due to the potential for unfavorable changes in foreign currency exchange rates, the ultimate cost of such equipment purchases could increase. In fiscal 2025, we obtained an equipment loan to finance a portion of this capital investment and intend to fund the remainder with borrowings under our Credit Facility or with available cash generated from our operations. We anticipate that expected net cash flow generated from operations and amounts available pursuant to the Credit Facility and the Equipment Loan (as defined below) will be sufficient to fund our operations and capital expenditures for the next twelve months. Our available credit under our Credit Facility has allowed us to reinvest in the Company through capital expenditures, develop new products, pay cash dividends, consummate strategic investments and business acquisitions and explore other growth strategies outlined in our Long-Range Plan.
Cash flows from operating activities have historically been driven by net income but are also significantly influenced by inventory requirements, which can change based upon fluctuations in both quantities and market prices of the various nuts, nut products and other commodities or other input materials we buy and sell. Current market trends in nut prices and crop estimates also impact nut procurement.
The following table sets forth certain cash flow information for the first three quarters of 2026 and 2025, respectively (dollars in thousands):
Operating Activities Net cash provided by operating activities was $94.8 million for the first thirty-nine weeks of fiscal 2026 compared to cash used of $6.0 million for the comparative period of fiscal 2025. The increase in operating cash flow was primarily due to changes in working capital, primarily decreased inventory and increased accrued expenses, and a higher net income.
Total inventories were $252.6 million at March 26, 2026, a decrease of $2.0 million, or 0.8%, from the inventory balance at June 26, 2025, and a decrease of $5.2 million, or 2.0%, from the inventory balance at March 27, 2025. The decrease in inventories at March 26, 2026 compared to June 26, 2025 was due primarily to lower on-hand quantities of bars, partially offset by higher commodity acquisition costs for pecans and higher on-hand quantities of pecans and peanuts. The decrease in inventories at March 26, 2026 compared to March 27, 2025 was due primarily to lower acquisition costs for walnuts and peanuts, as well as lower on-hand quantities of pecans, walnuts and almonds. These decreases were partially offset by the impact of higher pecan acquisition costs and increased on-hand quantities of peanuts.
Raw nut and dried fruit input stocks, some of which are classified as work-in-process, decreased 10.5 million pounds, or 15.3%, at March 26, 2026 compared to March 27, 2025 due to lower quantities of pecans, walnuts and almonds on hand. This reduction was offset partially by higher quantities of peanuts on hand. The weighted average cost per pound of raw nut input stocks on hand at the end of the third quarter of fiscal 2026 increased 10.5% compared to the end of the third quarter of fiscal 2025, primarily due to higher acquisition costs for pecans and almonds, partially offset by lower acquisition cost of walnuts and peanuts.
Investing Activities Cash used in investing activities was $67.5 million during the first thirty-nine weeks of fiscal 2026, compared to $37.3 million for the same period last year. Capital asset purchases were $69.0 million during the first thirty-nine weeks of fiscal 2026, compared to $37.2 million for the first thirty-nine weeks of fiscal 2025. Slightly offsetting the fiscal 2026 cash outflows for capital asset purchases was $1.1 million of net life insurance proceeds received from existing life insurance contracts and $0.5 million received on sale of non-core equipment. We expect total capital expenditures for equipment purchases and upgrades for fiscal 2026 to be approximately $95.0 million based on current foreign currency exchange rates and tariff expectations. This includes substantially all capital expenditures needed for the planned purchase of equipment to expand our production capabilities and related infrastructure improvements as described above, facility maintenance, food safety enhancements and expansion needs for our bars business. We expect to fund these capital purchases through a combination of borrowings under our existing Credit Facility, use of available cash from our operations and an equipment loan financing arrangement obtained in fiscal 2025. Absent any additional material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under the Credit Facility and our equipment loan financing, will be sufficient to meet the cash requirements for planned capital expenditures.
Financing Activities Cash used in financing activities was $26.6 million during the first thirty-nine weeks of fiscal 2026, compared to cash provided of $44.1 million for the same period last year. Net repayments under our Credit Facility were $26.4 million during the first thirty-nine weeks of fiscal 2026, compared to net borrowings of $69.2 million for the first thirty-nine weeks of fiscal 2025. Equipment loan proceeds received were $29.7 million in the first thirty-nine weeks of fiscal 2026. Dividends paid in the first thirty-nine weeks of fiscal 2026 were approximately $4.8 million more than dividends paid in the same period last year.
Real Estate Matters
In April 2024, the Company executed a 7.5 year lease for approximately 445,000 square feet of warehouse space. The warehouse is located in Huntley, IL near the Elgin Site and is primarily utilized to store finished goods inventory and as a distribution center along with light manufacturing. On January 15, 2026, the Company executed a 10 year lease for the additional warehouse space of approximately 285,000 square feet at the Huntley location.
Financing Arrangements
Our Amended and Restated Credit Agreement dated March 5, 2020, as most recently amended on June 16, 2025, provides for a $150.0 million revolving loan commitment and letter of credit subfacility. The Credit Facility has an accrued interest rate based on SOFR plus an applicable margin based upon the borrowing base calculation, ranging from 1.35% to 1.85%. The Credit Facility allows the Company to pay up to $100.0 million in dividends per year, subject to meeting availability test, and is secured by a first priority lien over our accounts receivable and inventory.
Credit Facility
At our election, borrowings under the Credit Facility currently accrue interest at either (i) a rate determined pursuant to the administrative agent’s prime rate plus an applicable margin determined by reference to the amount of loans, which may be advanced
under the borrowing base calculation, ranging from 0.25% to 0.75% or (ii) a rate based on SOFR plus an applicable margin as noted above.
At March 26, 2026, the weighted average interest rate for the Credit Facility was 5.6%. The terms of the Credit Facility contain covenants that, among other things, require us to restrict investments, indebtedness, acquisitions and certain sales of assets and limit annual cash dividends or distributions, transactions with affiliates, redemptions of capital stock and prepayment and refinancing of indebtedness (if such prepayment or refinancing, among other things, is of indebtedness under the equipment loan or of a subordinate debt). If loan availability under the borrowing base calculation falls below $25.0 million, we will be required to maintain a specified fixed charge coverage ratio, tested on a monthly basis, until loan availability equals or exceeds $25.0 million for three consecutive months. All cash received from customers is required to be applied against the Credit Facility. The lenders under the Credit Facility have the option to accelerate and demand immediate repayment of our obligations under the Credit Facility in the event of default on the payments required under the Credit Facility, a change in control in the ownership of the Company, non-compliance with the financial covenant or upon the occurrence of other defaults by us under the Credit Facility. As of March 26, 2026, we were in compliance with all covenants under the Credit Facility and we currently expect to be in compliance with the financial covenant in the Credit Facility for the foreseeable future. At March 26, 2026, we had $113.6 million of available credit under the Credit Facility. If this entire amount were borrowed at March 26, 2026, we would still be in compliance with all restrictive covenants under the Credit Facility.
Selma Property
In September 2006, we sold our Selma, Texas properties (the “Selma Properties”) to two related party partnerships for $14.3 million and are leasing them back. The selling price was determined by an independent appraiser to be the fair market value which also approximated our carrying value. The lease for the Selma Properties has a ten-year term at a fair market value rent with three five-year renewal options. In September 2015, we exercised two of the five-year renewal options which extended the lease term to September 2026 and the base monthly lease amount increased to approximately $114,000. On December 30, 2025 we exercised the final remaining five-year renewal option which extended the lease term to September 2031. The base monthly lease payment will increase to approximately $121,000 beginning in October 2026. Also, we have an option to purchase the Selma Properties from the owner at 95% (100% in certain circumstances) of the then fair market value, but not less than the original $14.3 million purchase price. The provisions of the arrangement are not eligible for sale-leaseback accounting and the $14.3 million was recorded as a debt obligation. No gain or loss was recorded on the Selma Properties transaction. As of March 26, 2026, $5.8 million of the debt obligation was outstanding.
Equipment Loan
On June 16, 2025, the Company entered into a financing agreement with Wells Fargo Bank, N.A. which allows the Company to finance up to $50.0 million for the purchase of equipment to further expand our production capabilities, increase our efficiency and further enhance our product offerings to our customers (the “Equipment Loan”). The Equipment Loan is provided under a master loan agreement and related equipment schedule(s) and is secured under a Security Agreement that provides for a first priority lien on all equipment and a second priority lien on our accounts receivable and inventory. The Company will be required to make sixty equal monthly payments comprised of principal and interest starting upon distribution of the final loan proceeds which is expected to occur in the first half of fiscal 2027. The fixed interest rate (SOFR plus an applicable margin of 1.49%) will be calculated at that point in time as well. The Equipment Loan contains a graded prepayment penalty if the loan is paid off within 36 months of commencement. The Company will make monthly interest-only payments of SOFR plus an applicable margin of 1.60% prior to the delivery and acceptance of the equipment and distribution of the final loan proceeds, which will be capitalized as part of the equipment acquisition cost. As of March 26, 2026, $38.9 million of the debt obligation under the Equipment Loan was outstanding.
Critical Accounting Policies and Estimates
For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the fiscal year ended June 26, 2025.
Recent Accounting Pronouncements
Refer to Note 14 – “Recent Accounting Pronouncements and Tax Legislation” of the Notes to Consolidated Financial Statements, contained in Part I, Item 1 of this form 10-Q, for a discussion of recently issued and adopted accounting pronouncements.
Some of the statements in this release are forward-looking. These forward-looking statements may be generally identified by the use of forward-looking words and phrases such as “will”, “intends”, “may”, “believes”, “anticipates”, “should” and “expects” and are based on the Company’s current expectations or beliefs concerning future events and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where expressly required to do so by law. Among the factors that could cause results to differ materially from current expectations are: (i) sales activity for the Company’s products, such as a decline in sales to one or more key customers, or to customers or in the nut and bars categories generally, in some or all channels, a change in product mix to lower price products, a decline in sales of private brand products or changing consumer preferences, including a shift from higher margin products to lower margin products; (ii) changes in the availability and costs of raw materials and ingredients due to global conflict, tariffs and other import restrictions and the impact of fixed price commitments with customers; (iii) the ability to pass on price increases to customers if commodity costs rise and the potential for a negative impact on demand for, and sales of, our products from price increases; (iv) the ability to measure and estimate bulk inventory, fluctuations in the value and quantity of the Company’s nut inventories due to fluctuations in the market prices of nuts and bulk inventory estimation adjustments, respectively; (v) the Company’s ability to appropriately respond to, or lessen the negative impact of, competitive and pricing pressures; (vi) losses associated with product recalls, product contamination, food labeling or other food safety issues, or the potential for lost sales or product liability if customers lose confidence in the safety of the Company’s products or in nuts or nut products in general, or are harmed as a result of using the Company’s products; (vii) the ability of the Company to control costs (including inflationary costs) and manage shortages or other disruptions in areas such as inputs, transportation and labor; (viii) uncertainty in economic conditions, including the potential for inflation or economic downturn leading to decreased consumer demand; (ix) the timing and occurrence (or nonoccurrence) of other transactions and events which may be subject to circumstances beyond the Company’s control, including the impact of tariff refunds with respect to us and our customers; (x) the adverse effect of labor unrest or disputes, litigation and/or legal settlements, including potential unfavorable outcomes exceeding any amounts accrued; (xi) losses due to significant disruptions at any of our production or processing facilities, our inability to meet or fulfill customer orders on a timely basis, if at all, or employee unavailability due to labor shortages; (xii) the ability to implement our Long-Range Plan, including growing our branded and private brand product sales, diversifying our product offerings (including by the launch of new products) and expanding into alternative sales channels; (xiii) technology disruptions or failures or the occurrence of cybersecurity incidents or breaches; (xiv) the inability to protect the Company’s brand value, intellectual property or avoid intellectual property disputes; and (xv) our ability to manage the impacts of changing weather patterns on raw material availability due to climate change.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in our assessment of our sensitivity to market risk since our presentation set forth in Part I - Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended June 26, 2025.
Item 4. Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of March 26, 2026. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 26, 2026, the Company’s disclosure controls and procedures were effective.
In connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended March 26, 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of legal proceedings, see Note 11 – “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors
In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties that could materially affect our Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 26, 2025. There were no significant changes to the risk factors identified on the Form 10-K for the fiscal year ended June 26, 2025 or during the first thirty-nine weeks of fiscal 2026.
See Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in this Form 10-Q, and see Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2025.
Item 5. Other Information
Rule 10b5-1 Trading Arrangement
During the quarter ended March 26, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
Item 6. Exhibits
The exhibits filed herewith are listed in the exhibit index below.
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* Indicates a management contract or compensatory plan or arrangement.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on April 29, 2026.