SANFILIPPO JOHN B & SON INC (JBSS)

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:

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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.

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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.

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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.

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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 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.

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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.

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QUARTERLY HIGHLIGHTS

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 $2

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Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the 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 2027 are to the fiscal year ending June 24, 2027.

•
References herein to fiscal 2026, fiscal 2025 and fiscal 2024 are to the fiscal years ended June 25, 2026, June 26, 2025 and June 27, 2024, 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, including accelerating our private brand business with key customers in high-growth snacking categories, most notably private brand bars. The Long-Range Plan also emphasizes expanding branded distribution behind Orchard Valley Harvest and Fisher via insight-driven product and packaging innovation in our consumer and commercial ingredients channels, while strategically partnering with leading brands in our contract manufacturing channel. Execution of the Long-Range 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 our ongoing capacity expansion and a robust innovation pipeline, with continued focus on nutrition and protein 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, we have made 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 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.

Inflation and Consumer Trends

We continue to face changing marketplace trends that impact 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, trail mix and mainstream 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, 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 existing products in our portfolio that address these trends, as well as our strengths by leveraging our expertise in snack nut and trail mix and bars categories, development of

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additional products that are on-trend, 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 (“IEEPA”) 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 expired in early fiscal 2027. In March 2026, the U.S. Trade Representative launched several investigations under Section 301 of the Trade Act into the failure of numerous trading partners to prohibit or effectively enforce bans on imports produced with forced labor. These investigations resulted in country-specific additional tariffs imposed by the U.S. President of 10% or 12.5% which became effective on July 24, 2026. These Section 301 tariffs have been challenged as exceeding U.S. Presidential authority. The ongoing and 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 procure from non-U.S. sources. It is uncertain when or if, and in what amount, 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 paid approximately $4.0 million in IEEPA tariffs in the third quarter of fiscal 2026. In the fourth quarter of fiscal 2026, we received a refund of IEEPA tariffs paid of approximately $4.0 million.

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 and around Iran, which have led to volatility in the price of 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, 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.

Climate Change Impacts

Climate change may have a long-term adverse impact on our business and results of operations. Global average temperatures are gradually increasing due to increased concentration of carbon dioxide and other greenhouse gases, which is projected to contribute to

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significant changes in global weather patterns, an increase in severity of natural disasters, and c

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]