[Management View]
John B. Sanfilippo & Son reported record annual net sales for fiscal 2025, driven by strategic investments in manufacturing capabilities and infrastructure expansion. Despite challenges, management remains focused on portfolio growth and disciplined cost management.

[Outlook]
The company plans to accelerate volume growth by expanding its private brand bar portfolio and rebuilding its nut and trail business through innovation and manufacturing expansion. Management is confident in delivering strong operating results and creating long-term shareholder value.

[Financial Performance]
Net sales increased 3.8% to $1.11 billion for fiscal 2025, primarily due to the Lakeville acquisition. Full-year net income was $58.9 million, slightly below the previous year due to declining margins from higher input costs. Gross profit margin decreased from 20.1% to 18.4%.

[Q&A Highlights]
Question 1: Can you elaborate on the strategic mix shift in distribution channels?
Answer: Management noted a strategic shift with increased volumes in commercial ingredients and contract manufacturing, while consumer-focused channels contracted. This reflects a focus on operational efficiencies and adapting to evolving consumer behaviors.

Question 2: How is the company addressing commodity cost pressures?
Answer: The company is leveraging sourcing flexibility, driving cost savings initiatives, and implementing selective price adjustments. Innovations in product development and optimized pricing initiatives are underway to address consumer behaviors in value-centric segments.

Question 3: What are the implications of the Lakeville acquisition on sales volume?
Answer: The Lakeville acquisition contributed to a 3.4% increase in sales volume. Excluding this impact, sales volume decreased 1.7%, reflecting declines in the consumer channel, partially offset by growth in contract manufacturing.

Question 4: How is the company managing external risks such as tariffs and inflation?
Answer: Management is actively monitoring trade developments and material costs, maintaining transparency with customers, and offering tailored solutions to manage costs without compromising value. The company remains agile and responsive to external uncertainties.

[Sentiment Analysis]
Analysts expressed concern over declining margins and external risks, while management maintained a confident tone regarding strategic initiatives and future growth potential.

[Quarterly Comparison]
| Metric | Fiscal Q4 2025 | Fiscal Q4 2024 |
|--------|---------------|---------------|
| Net Sales | $1.11 billion | $1.07 billion |
| Net Income | $13.5 million | $10 million |
| Gross Profit Margin | 18.1% | 18.5% |
| Inventory Value Increase | 29.5% | N/A |

[Risks and Concerns]
Management highlighted risks including tariffs, inflation, unpredictable commodity costs, and broader macroeconomic challenges. These factors require agility and responsiveness to maintain growth and profitability.

[Final Takeaway]
Sanfilippo JBSS navigated a challenging fiscal 2025 with strategic investments and operational efficiencies, achieving record net sales despite external pressures. The company is poised for future growth through expanded manufacturing capabilities and innovation, while remaining vigilant against persistent external risks. Investors should monitor the company's ability to adapt to evolving market conditions and maintain profitability amid commodity cost pressures.