What Happened?
Shares of snack food company J&J Snack Foods (NASDAQ: JJSF) jumped 3.2% in the afternoon session after the release of a favorable Consumer Price Index (CPI) report, which showed inflation cooling more than anticipated. The July report from the Bureau of Labor Statistics indicated a year-over-year inflation rate of 2.7%, just below the 2.8% economists had forecast. This suggests that price pressures on consumers may be easing. Particularly beneficial for the sector was the news that the food index remained flat, with grocery prices even declining by 0.1% month-over-month. This development is seen as a positive for the profitability of food, beverage, and personal care companies, as lower input costs and increased consumer purchasing power could boost sales. A Federal Reserve official's comments on the same day, noting that consumer spending fundamentals remain solid, further bolstered investor confidence in the sector's resilience.
After the initial pop the shares cooled down to $112.07, up 3% from previous close.
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What Is The Market Telling Us
J&J Snack Foods’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 12.1% on the news that the company reported weak first quarter 2025 results which saw revenue, gross margin, EPS, and EBITDA all fall short of Wall Street's estimates. A drop in volume across big segments like churros and pretzels, dragged sales and caused a sharp fall in gross profit. Also, slower theater traffic and the end of a one-time churro promo hurt sales, while price hikes didn't land fast enough to offset rising costs. Overall, this was a weaker quarter.
J&J Snack Foods is down 27.1% since the beginning of the year, and at $112.07 per share, it is trading 37.4% below its 52-week high of $179.02 from November 2024. Investors who bought $1,000 worth of J&J Snack Foods’s shares 5 years ago would now be looking at an investment worth $852.94.
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