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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 25, 2025


☐	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 January 23, 2026, 9,089,384 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.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

FORM 10-Q

For the Quarter Ended December 25, 2025

INDEX


	Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited)	3
Consolidated Statements of Comprehensive Income for the Quarter and Twenty-Six Weeks Ended December 25, 2025 and December 26, 2024	3
Consolidated Balance Sheets as of December 25, 2025, June 26, 2025 and December 26, 2024	4
Consolidated Statements of Stockholders’ Equity for the Quarter and Twenty-Six Weeks Ended December 25, 2025 and December 26, 2024	6
Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended December 25, 2025 and December 26, 2024	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28
Part II. Other Information
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 5. Other Information	28
Item 6. Exhibits	28
Signature	31

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	For the Quarter Ended				For the Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Net sales	$	314,777	$	301,067	$	613,460	$	577,263
Cost of sales		255,608		248,816		500,197		478,468
Gross profit		59,169		52,251		113,263		98,795
Operating expenses:
Selling expenses		21,143		22,620		39,023		42,459
Administrative expenses		12,051		10,262		21,248		19,960
Total operating expenses		33,194		32,882		60,271		62,419
Income from operations		25,975		19,369		52,992		36,376
Other expense:
Interest expense including $141, $159, $287 and $322 to related parties, respectively		503		772		1,487		1,288
Rental and miscellaneous expense, net		574		347		1,150		758
Pension expense (excluding service costs)		389		361		778		722
Total other expense, net		1,466		1,480		3,415		2,768
Income before income taxes		24,509		17,889		49,577		33,608
Income tax expense		6,552		4,294		12,894		8,354
Net income and comprehensive income	$	17,957	$	13,595	$	36,683	$	25,254
Net income per common share-basic	$	1.54	$	1.17	$	3.14	$	2.17
Net income per common share-diluted	$	1.53	$	1.16	$	3.12	$	2.16

The accompanying unaudited notes are an integral part of these consolidated financial statements.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	December 25, 2025		June 26, 2025		December 26, 2024
ASSETS
CURRENT ASSETS:
Cash	$	2,400	$	585	$	336
Accounts receivable, net of allowance for doubtful accounts of $337, $293 and $356, respectively		79,823		76,656		81,200
Inventories		235,427		254,600		205,842
Prepaid expenses and other current assets		19,566		14,583		19,320
TOTAL CURRENT ASSETS		337,216		346,424		306,698
PROPERTY, PLANT AND EQUIPMENT:
Land		13,365		13,365		13,365
Buildings		120,208		119,315		116,684
Machinery and equipment		335,810		326,984		301,855
Furniture and leasehold improvements		5,540		5,540		5,482
Vehicles		1,291		1,228		1,134
Construction in progress		19,033		7,223		19,366
		495,247		473,655		457,886
Less: Accumulated depreciation		320,300		308,506		297,231
		174,947		165,149		160,655
Rental investment property, net of accumulated depreciation of $16,457, $16,053 and $15,649, respectively		12,666		13,070		13,474
TOTAL PROPERTY, PLANT AND EQUIPMENT		187,613		178,219		174,129

Intangible assets, net		3,810		4,428		5,057
Deferred income taxes		—		5,782		3,900
Goodwill		11,750		11,750		11,750
Operating lease right-of-use assets		26,941		27,824		29,019
Equipment deposits		40,475		12,438		7,203
Other assets		9,924		10,738		7,497
TOTAL ASSETS	$	617,729	$	597,603	$	545,253

The accompanying unaudited notes are an integral part of these consolidated financial statements.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share amounts)


	December 25, 2025			June 26, 2025			December 26, 2024
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility borrowings	$	10,000		$	57,584		$	49,753
Current maturities of long-term debt, net, including related party debt of $847, $808 and $834, respectively and net of unamortized debt issuance costs of $17, $2 and $0 respectively		3,131			941			834
Accounts payable		79,897			60,479			64,585
Bank overdraft		2,763			294			1,953
Accrued payroll and related benefits		20,399			18,446			14,690
Dividends payable		11,704			—			—
Other accrued expenses		20,512			18,302			18,247
TOTAL CURRENT LIABILITIES		148,406			156,046			150,062

LONG-TERM LIABILITIES:
Long-term debt, less current maturities, including related party debt of $5,122, $5,557 and $5,969, respectively and net of unamortized debt issuance costs of $158, $123 and $0 respectively		28,839			14,564			5,969
Retirement plan		28,794			27,921			26,773
Long-term operating lease liabilities, net of current portion		23,142			24,224			25,754
Long-term workers' compensation liabilities		10,755			10,603			7,857
Deferred income taxes		3,935			—			—
Other		3,734			3,548			3,207
TOTAL LONG-TERM LIABILITIES		99,199			80,860			69,560
TOTAL LIABILITIES		247,605			236,906			219,622

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, 9,207,284, 9,161,348 and 9,158,541 shares issued, respectively		92			92			92
Capital in excess of par value		141,665			139,724			137,858
Retained earnings		228,981			221,495			187,815
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		370,124			360,697			325,631
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	617,729		$	597,603		$	545,253

The accompanying unaudited notes are an integral part of these consolidated financial statements.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except share and per share amounts)


															Accumulated
	Class A								Capital in						Other
	Common Stock				Common Stock				Excess of			Retained			Comprehensive		Treasury
	Shares		Amount		Shares		Amount		Par Value			Earnings			Income		Stock			Total
Balance, June 26, 2025		2,597,426	$	26		9,161,348	$	92	$	139,724		$	221,495		$	564	$	(1,204	)	$	360,697
Net income													18,726								18,726
Cash dividends ($1.50 per share)													(17,493	)							(17,493	)
Equity award exercises						2,262		—													—
Stock-based compensation expense										854											854
Balance, September 25, 2025		2,597,426	$	26		9,163,610	$	92	$	140,578		$	222,728		$	564	$	(1,204	)	$	362,784
Net income													17,957								17,957
Cash dividends ($1.00 per share)													(11,704	)							(11,704	)
Equity award exercises, net of shares withheld for employee taxes						43,674		—		(383	)										(383	)
Stock-based compensation expense										1,470											1,470
Balance, December 25, 2025		2,597,426	$	26		9,207,284	$	92	$	141,665		$	228,981		$	564	$	(1,204	)	$	370,124


															Accumulated
	Class A								Capital in						Other
	Common Stock				Common Stock				Excess of			Retained			Comprehensive		Treasury
	Shares		Amount		Shares		Amount		Par Value			Earnings			Income		Stock			Total
Balance, June 27, 2024		2,597,426	$	26		9,123,938	$	91	$	135,691		$	186,965		$	1,044	$	(1,204	)	$	322,613
Net income													11,659								11,659
Cash dividends ($2.10 per share)													(24,404	)							(24,404	)
Stock-based compensation expense										935											935
Balance, September 26, 2024		2,597,426	$	26		9,123,938	$	91	$	136,626		$	174,220		$	1,044	$	(1,204	)	$	310,803
Net income													13,595								13,595
Equity award exercises, net of shares withheld for employee taxes						34,603		1		(484	)										(483	)
Stock-based compensation expense										1,716											1,716
Balance, December 26, 2024		2,597,426	$	26		9,158,541	$	92	$	137,858		$	187,815		$	1,044	$	(1,204	)	$	325,631

The accompanying unaudited notes are an integral part of these consolidated financial statements.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	For the Twenty-Six Weeks Ended
	December 25, 2025			December 26, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	36,683		$	25,254
Depreciation and amortization		14,177			13,153
Amortization of operating lease right-of-use assets		2,477			2,185
Loss on disposition of assets, net		84			671
Deferred income tax expense (benefit)		9,717			(770	)
Stock-based compensation expense		2,324			2,651
Change in assets and liabilities:
Accounts receivable, net		(3,286	)		3,798
Inventories		19,173			(9,279	)
Prepaid expenses and other current assets		(503	)		(3,683	)
Accounts payable		15,665			9,039
Accrued expenses		3,939			(18,628	)
Income taxes receivable		(4,480	)		(3,559	)
Other long-term assets and liabilities		(2,336	)		(1,755	)
Other, net		991			839
Net cash provided by operating activities		94,625			19,916

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(47,323	)		(25,548	)
Proceeds from life insurance, net		1,094			—
Other, net		(34	)		(70	)
Net cash used in investing activities		(46,263	)		(25,618	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term (repayments) borrowings		(47,584	)		29,333
Principal payments on long-term debt		(395	)		(299	)
Increase in bank overdraft		2,469			1,408
Dividends paid		(17,493	)		(24,404	)
Proceeds from issuance of debt		16,911			—
Debt issue costs		(72	)		—
Taxes paid related to net share settlement of equity awards		(383	)		(484	)
Net cash (used in) provided by financing activities		(46,547	)		5,554

NET INCREASE (DECREASE) IN CASH		1,815			(148	)
Cash, beginning of period		585			484
Cash, end of period	$	2,400		$	336

The accompanying unaudited notes are an integral part of these consolidated financial statements.

Table of Contents

JOHN B. SANFILIPPO & SON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(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 second quarter of fiscal 2026 and fiscal 2025 are to the quarters ended December 25, 2025 and December 26, 2024, respectively.

•

References herein to the first half or first twenty-six weeks of fiscal 2026 and fiscal 2025 are to the twenty-six weeks ended December 25, 2025 and December 26, 2024, 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, other sesame snack products and baked cheese 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, Southern Style Nuts and Just the Cheese 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.

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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 and December 26, 2024 were $159 and $611, respectively, and are recorded in the caption “Prepaid expenses and other current assets” on the Consolidated Balance Sheets. There was no contract asset balance at December 25, 2025. 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 Twenty-Six Weeks Ended
Distribution Channel	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Consumer	$	263,159	$	251,359	$	505,244	$	480,743
Commercial Ingredients		27,985		26,589		59,194		53,489
Contract Manufacturing		23,633		23,119		49,022		43,031
Total	$	314,777	$	301,067	$	613,460	$	577,263

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.

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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 6.9 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:


	December 25, 2025		June 26, 2025		December 26, 2024		Affected Line Item in Consolidated Balance Sheets
Assets
Operating lease right-of-use assets	$	26,941	$	27,824	$	29,019	Operating lease right-of-use assets
Total lease right-of-use assets	$	26,941	$	27,824	$	29,019

Liabilities
Current:
Operating leases	$	5,110	$	4,515	$	4,211	Other accrued expenses
Noncurrent:
Operating leases		23,142		24,224		25,754	Long-term operating lease liabilities
Total lease liabilities	$	28,252	$	28,739	$	29,965

The following tables summarize the Company’s total lease costs and other information arising from operating lease transactions:


	For the Quarter Ended				For the Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Operating lease costs (a)	$	1,968	$	1,971	$	3,868	$	3,713
Variable lease costs (b)		350		134		698		306
Total lease cost	$	2,318	$	2,105	$	4,566	$	4,019

(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 was as follows:


	For the Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024
Operating cash flows information:
Cash paid for amounts included in measurements for lease liabilities	$	3,030	$	2,246

Non-cash activity:
Right-of-use assets obtained in exchange for new operating lease obligations	$	1,594	$	3,800


	December 25, 2025			June 26, 2025			December 26, 2024
Weighted average remaining lease term (in years)		5.2			5.7			6.1
Weighted average discount rate		6.7	%		6.7	%		6.7	%

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Maturities of operating lease liabilities as of December 25, 2025 are as follows:


Fiscal Year Ending
June 25, 2026 (excluding the twenty-six weeks ended December 25, 2025)	$	3,494
June 24, 2027		6,616
June 29, 2028		6,487
June 28, 2029		5,586
June 27, 2030		4,729
June 26, 2031		4,210
Thereafter		2,443
Total lease payments		33,565
Less imputed interest		(5,313	)
Present value of operating lease liabilities	$	28,252

On January 15, 2026, the Company executed a 10 year lease for the remaining warehouse space of approximately 285,000 square feet in Huntley, IL. The original warehouse space was leased starting in fiscal 2024 near our largest facility in Elgin, IL, and the execution of this lease will result in us renting the entire building. The warehouse 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 $18,146 of additional operating leases are not reflected in the Consolidated Balance Sheet and tables above. The lease for the remaining space is scheduled to commence not later than 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 Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Lease income related to lease payments	$	243	$	478	$	473	$	957

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 twenty-six weeks ended December 25, 2025)	$	618
June 24, 2027		1,225
June 29, 2028		639
June 28, 2029		560
June 27, 2030		544
June 26, 2031		556
Thereafter		1,887
	$	6,029

Note 4 – Inventories

Inventories consist of the following:


	December 25, 2025		June 26, 2025		December 26, 2024
Raw material and supplies	$	89,772	$	95,350	$	96,109
Work-in-process and finished goods		145,655		159,250		109,733
Total	$	235,427	$	254,600	$	205,842

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Note 5 – Goodwill and Intangible Assets

Identifiable intangible assets that are subject to amortization consist of the following:


	December 25, 2025			June 26, 2025			December 26, 2024
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	)		(21,004	)
Brand names		(13,748	)		(13,388	)		(13,024	)
Product formulas		(362	)		(283	)		(202	)
Non-compete agreement		(300	)		(292	)		(283	)
		(35,760	)		(35,142	)		(34,513	)
Net intangible assets	$	3,810		$	4,428		$	5,057

Customer relationships are being amortized on an accelerated basis. The brand names remaining to be amortized consist of the Squirrel Brand and Southern Style Nuts brand names.

Total amortization expense related to intangible assets, which is classified in “administrative expenses” in the Consolidated Statement of Comprehensive Income, was $306 and $618 for the quarter and twenty-six weeks ended December 25, 2025, respectively. Amortization expense for the remainder of fiscal 2026 is expected to be approximately $424 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 December 25, 2025 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:


Gross goodwill balance at June 27, 2024	$	20,516
Accumulated impairment losses		(8,766	)
Net goodwill balance at June 27, 2024		11,750
Goodwill acquired during fiscal 2025		—
Net balance at June 26, 2025		11,750
Goodwill acquired during fiscal 2026		—
Net balance at December 25, 2025	$	11,750

Note 6 – Credit Facility

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 December 25, 2025, we had $134,745 of available credit under the Credit Facility reflecting borrowings of $10,000 and reduced availability as a result of $5,255 in outstanding letters of credit. As of December 25, 2025, we were in compliance with all financial covenants under the Credit Facility.

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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 fourth quarter of fiscal 2026. 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 December 25, 2025 and June 26, 2025 there was $26,176 and $9,265, respectively, of the debt obligation under the Equipment Loan outstanding. The interest costs incurred directly attributable to the Equipment Loan were capitalized. Interest capitalized was $372 and $716 for the quarter and twenty-six weeks ended December 25, 2025, respectively. No interest was capitalized for the quarter and twenty-six weeks ended December 26, 2024 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 Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Weighted average number of shares outstanding – basic		11,690,152		11,647,791		11,680,669		11,640,598
Effect of dilutive securities:
Restricted stock units		49,274		62,300		62,644		73,129
Weighted average number of shares outstanding – diluted		11,739,426		11,710,091		11,743,313		11,713,727

There were no anti-dilutive awards excluded from the computation of diluted earnings per share for any periods presented.

Note 9 – Stock-Based Compensation Plans

The following is a summary of Restricted Stock Unit (“RSU”) activity for the first twenty-six weeks of fiscal 2026:


Restricted Stock Units	Shares			Weighted Average Grant Date Fair Value
Outstanding at June 26, 2025		158,824		$	72.77
Granted		78,330		$	59.93
Vested (a)		(51,564	)	$	74.49
Forfeited		(6,609	)	$	74.60
Outstanding at December 25, 2025		178,981		$	66.59

(a)

The number of RSUs vested includes shares that were withheld on behalf of employees to satisfy statutory tax withholding requirements.

At December 25, 2025, there were 30,354 RSUs outstanding that were vested but deferred.

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The following is a summary of Performance Stock Unit (“PSU”) activity for the first twenty-six 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 December 25, 2025		29,295		$	68.45

(a)

The PSUs are presented based on reaching 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 22,054 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 December 25, 2025.

The following table summarizes compensation expense charged to earnings for all equity compensation plans for the periods presented:


	For the Quarter Ended				For the Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Stock-based compensation expense	$	1,470	$	1,716	$	2,324	$	2,651

As of December 25, 2025, there was $6,685 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 1.8 years.

Note 10 – Retirement Plan

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 Twenty-Six Weeks Ended
	December 25, 2025		December 26, 2024		December 25, 2025		December 26, 2024
Service cost	$	140	$	129	$	281	$	258
Interest cost		389		361		778		722
Net periodic benefit cost	$	529	$	490	$	1,059	$	980

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.

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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:


	December 25, 2025		June 26, 2025		December 26, 2024
Carrying value of current and long-term debt:	$	32,145	$	15,630	$	6,803
Fair value of current and long-term debt:		31,900		15,329		6,545

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.

Note 13 – Segment Reporting

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 $6,717 and $13,559 for the quarter and twenty-six weeks ended December 25, 2025, respectively and $6,224 and $12,388 for the quarter and twenty-six weeks ended December 26, 2024, respectively.

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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 will lead 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.

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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 second quarter of fiscal 2026 and fiscal 2025 are to the quarters ended December 25, 2025 and December 26, 2024, respectively.

•

References herein to the first half or first twenty-six weeks of fiscal 2026 and fiscal 2025 are to the twenty-six weeks ended December 25, 2025 and December 26, 2024, respectively.

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 & 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 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 2026, we are making incremental 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 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.

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Inflation and Consumer Trends

We continue to face changing marketplace trends that are impacting our categories. Retail prices across snack nuts and trail mix have 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 bars are declining for the Company and the industry overall. 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 and 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, but intermittent challenges, delays and extended lead-times still exist for certain raw materials and inputs. Overall packaging and ingredient inflation appears to have moderated into our fiscal 2026, but there is still uncertainty within the supply chain from the U.S. government's tariffs 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. The ultimate impact of tariffs may be difficult to predict as their amount and duration is 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. While we do not have direct exposure to suppliers in Venezuela, Russia, Ukraine 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 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 the level of economic activity in the areas where we ship and receive shipments and the prevailing price of oil.

Our most significant ingredient requirements include 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.

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 remainder of fiscal 2026.

The cocoa supply-demand outlook is showing signs of improvement following three consecutive years of supply deficits, benefiting from recovery in Ivory Coast and Ghana as well as strong exports from Ecuador; however, cocoa prices still remain above long-term averages. Global cocoa supply balances remain historically tight, while consumption data reflects North American demand reductions amid higher prices. 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 impacted adversely.

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QUARTERLY HIGHLIGHTS

Our net sales of $314.8 million for the second quarter of fiscal 2026 increased $13.7 million, or 4.6%, from our net sales of $301.1 million for the second quarter of fiscal 2025. Net sales for the first twenty-six weeks of fiscal 2026 increased by $36.2 million, or 6.3%, to $613.5 million compared to the first twenty-six weeks of fiscal 2025.

Sales volume, measured as pounds sold to customers, decreased 9.7% compared to the second quarter of fiscal 2025. Sales volume for the first twenty-six weeks of fiscal 2026 decreased 5.3% compared to the first twenty-six weeks of fiscal 2025.

Gross profit increased $6.9 million, and our gross profit margin, as a percentage of net sales, increased to 18.8% for the second quarter of fiscal 2026, compared to 17.4% for the second quarter of fiscal 2025. Gross profit increased $14.5 million, and our gross profit margin increased to 18.5% from 17.1% for the first twenty-six weeks of fiscal 2026 compared to the first twenty-six weeks of fiscal 2025.

Total operating expenses for the second quarter of fiscal 2026 increased by $0.3 million, or 0.9%, compared to the second quarter of fiscal 2025. As a percentage of net sales, total operating expenses in the second quarter of fiscal 2026 decreased to 10.5% from 10.9% for the second quarter of fiscal 2025. Total operating expenses for the first twenty-six weeks of fiscal 2026 decreased by $2.1 million, or 3.4%, compared to the first twenty-six weeks of fiscal 2025. As a percentage of net sales, total operating expenses for the first twenty-six weeks of fiscal 2026 decreased to 9.8% from 10.8% for the first twenty-six weeks of fiscal 2025.

The total value of inventories on hand at the end of the second quarter of fiscal 2026 increased $29.6 million, or 14.4%, compared to the total value of inventories on hand at the end of the second 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. During the third quarter, we will determine the final prices to be paid to the walnut growers based upon current market prices and other factors such as crop size and export demand. We have estimated the liability to our walnut growers and our walnut inventory costs using currently available information. Any difference between our estimated liability and the actual payments will be determined during the third quarter of fiscal 2026 and will be recognized in our financial results at that time.

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RESULTS OF OPERATIONS

Net Sales

In the second quarter of fiscal 2026, our net sales increased 4.6% to $314.8 million, compared to net sales of $301.1 million for the second quarter of fiscal 2025. The net sales increase was primarily driven by a 15.8% increase in weighted average selling price per pound, which was primarily due to higher commodity acquisition costs for all major tree nuts and peanuts. Sales volume, which is defined as pounds sold to customers, decreased 9.7%. Sales volume decreased for all major product types. Approximately half of the sales volume decline was attributable to granola sold in the contract manufacturing channel, which was offset by increases of sales volume of walnuts, almonds and pecans.

For the first twenty-six weeks of fiscal 2026 our net sales were $613.5 million, an increase of $36.2 million, or 6.3%, compared to the same period of fiscal 2025. The increase in net sales was attributable to a 12.2% increase in the weighted average selling price per pound, which was primarily due to higher commodity acquisition costs for all major tree nuts. Sales volume decreased 5.3% compared to the same period in the prior fiscal year. Sales volume decreased for bars, granola, trail mix and cashews, while sales volume for walnuts, peanuts, pecans and almonds increased.

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 Twenty-Six Weeks Ended
Product Type	December 25, 2025			December 26, 2024			December 25, 2025			December 26, 2024
Peanuts & Peanut Butter		14.5	%		15.2	%		14.9	%

SANFILIPPO JOHN B & SON INC 10-Q