John B Sanfilippo & Son Inc (JBSS) Q2 2021 Earnings Call Transcript

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John B Sanfilippo & Son Inc (JBSS 0.55%)
Q2 2021 Earnings Call
Jan 28, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning. My name is Dexter, and I will be your conference operator today. At this time, I would like to welcome everyone to the John B. Sanfilippo & Son, Inc. Second Quarter Fiscal 2021 Operating Results Conference Call. [Operator Instructions]

Mr. Mike Valentine, Chief Financial Officer, will begin your conference. Please go ahead, sir.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Thank you, Dexter. Good morning, everyone, and welcome to our 2021 second quarter earnings conference call. Thank you for joining us today. On the call with me today is Jeffrey Sanfilippo, our CEO; and Jasper Sanfilippo, our COO. Before we start, we want to remind you that we may make some forward-looking statements today. These statements are based on our current expectations and involve certain risks and uncertainties that are inherent in our business. The factors that could negatively impact results are explained in the various SEC filings that we have made, including forms 10-K and 10-Q. We encourage you to refer to these filings to learn more about these risks and uncertainties that are inherent in our business. Starting with the top line. Net sales for the second quarter of fiscal '21 decreased 5.2% to $233.6 million in comparison to net sales for the second quarter of fiscal 2020 of $246.4 million. The decline in net sales was primarily due to lower selling prices for tree nuts, which in turn resulted from lower commodity acquisition costs. The decline in net sales from lower selling prices was offset in part by a 1.8% increase in sales volume, which we define as pounds sold to customers. Sales volume increased 9.9% in our consumer distribution channel, and that was mainly due to a 13.3% increase in sales volume for private brand peanuts, trail mixes and snack mixes. Current economic conditions have resulted in a shift in consumer preferences to lower-priced private label products and lower-priced products that we make. Increased sales for Fisher snack nuts also contributed to the sales volume increase in the consumer distribution channel.

Sales volume decreased in our commercial ingredients channel by 23.6%, and that was due to a 29.4% decline in sales volume in our food service business. The decline in food service sales volume was due to a decline in air travel, nationwide restrictions on indoor restaurant dining and restaurant closures, all of which were attributable to COVID-19. Sales volume declined in the contract packaging distribution channel by 14.1%, primarily due to the unfavorable impact of lower convenience store foot traffic in one customer's business, again from COVID-19. Turning to sales volume for our branded products. In the current second quarter, branded sales volume accounted for 25.5% of total consumer channel sales volume. Sales volume for our Fisher recipe nuts declined 18.4% as a result of lost distribution at some grocery customers, which was offset in part by increased sales with our Internet retailer customers. The 13% decrease in sales volume for Orchard Valley Harvest was primarily driven by lower foot traffic at a major customer in the non-food sector due to COVID-19, reduced promotional activity and lost distribution at some other customers. The 30.2% increase in sales volume for Fisher snack nuts resulted mainly from increased promotional activity. And Southern Style Nuts sales volume declined by 4.2%, and that was due to reduced merchandising and promotional activity compared to last year's second quarter, and that was offset in part by distribution gains with new customers. Net sales for the first two quarters of the current fiscal year decreased to $443.8 million from $464.3 million for the first two quarters of fiscal '20. This decrease in net sales was primarily attributable to lower selling prices for the same reason I discussed in the quarterly comparison.

The decrease in net sales was also attributable to a 0.7% decline in sales volume. Sales volume increased 7% in the consumer distribution channel, primarily for the same reasons I cited in the quarterly comparison. Sales volume decreased 25.6% in the commercial ingredients distribution channel, mainly as a result of a 35.5% decline in sales volume in our food service business for the first two quarters. The decline in food service sales volume occurred for the same reasons I cited in the quarterly comparisons. Sales volume declined in the contract packaging distribution channel by 13.2% for the same reason I also cited in the quarterly comparison as well as the loss of some peanut butter business with another customer, and that was attributable to a temporary peanut supply shortage that existed in the first quarter of fiscal 2021. Second quarter gross profit increased $2.8 million or 5.6%, and gross profit margin as a percentage of net sales increased to 22.6% for the second quarter of fiscal 2021 from 20.3% for the second quarter of fiscal 2020. The increases in gross profit and gross profit margin were mainly due to lower commodity acquisition costs for tree nuts and increased sales volume. Gross profit for the first two quarters of the current fiscal year declined by $100,000 in gross profit margin as percentage of net sales increased to 20.8% from 19.9% for the same period last year. The increase in gross profit margin in the year-to-date comparison primarily was due to lower commodity acquisition costs for tree nuts. Total operating expenses for the current second quarter decreased $500,000 in the quarterly comparison. The decrease in operating expense was due to the recognition of a $2.3 million gain on the estimated final insurance settlement related to the fire that occurred in our Garysburg, North Carolina facility, that occurred in the second quarter of fiscal 2020.

The gain from the insurance settlement was largely offset by increases in freight, compensation and advertising expenses. Total operating expenses as a percentage of net sales increased to 10.7% from 10.4% compared to last year's second quarter due to a lower net sales base. Total operating expenses for the current year-to-date period decreased $3.2 million. And as a percentage of net sales, total operating expenses declined to 10.2% from 10.5% compared to the first two quarters of fiscal 2020. The decrease in total operating expenses was mainly due to the insurance settlement gain I cited in the quarterly comparison. Declines in compensation and travel expenses also contributed to the decline in total operating expenses in the year-to-date comparison. Interest expense for the second quarter and year-to-date period of fiscal '21 declined slightly compared to interest expense for both periods in fiscal 2020. The decreases in interest expense in both comparisons were due to a lower weighted average interest rate from the reduction of long-term debt. The benefit from a lower weighted average interest rate was largely offset by higher average short-term debt levels in both periods. Net income was $19.9 million or $1.72 per share diluted for the second quarter of fiscal 2021 compared to $17.5 million or $1.52 per share diluted for the second quarter of fiscal 2020. Net income for the first two quarters of fiscal 2021 was $32.7 million or $2.83 per share diluted compared to net income of $30.4 million or $2.64 per share diluted for the first two quarters of fiscal 2020. Now taking a quick look at inventory. The total value of our inventories on hand at the end of the current second quarter decreased 9.8% compared to the total value of inventories on hand at the end of the second quarter of fiscal 2020. The decrease in inventory value was due to lower commodity acquisition costs for all major tree nuts and lower quantities of peanuts on hand. The weighted average cost per pound of our raw nut and dried fruit input stocks on hand at the end of the second quarter of fiscal 2021 decreased 4.6% compared to the weighted average cost per pound of these input stocks at the end of the second quarter of last year. The decrease in the weighted average cost per pound of our input stocks was attributable to lower commodity acquisition costs for all major tree nuts. This was offset in part by a shift in product mix from lower-priced peanuts to higher-priced walnuts and pecans.

I will now turn the call over to Jeffrey Sanfilippo, our CEO, to provide additional comments on operating results for the second quarter of fiscal '21. Jeffrey?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thank you, Mike. Good morning, everyone. JBSS reported record net income and diluted earnings per share in our second quarter, coming off of a record second quarter last year. I am so proud of our management team and all of our associates for overcoming enormous headwinds to achieve record results for our second quarter of fiscal 2021. This is a considerable accomplishment given the trio of challenges we faced in our food service business, in our contract packaging distribution channel and with our Orchard Valley Harvest brand from the impact of COVID-19. As has been the case in recent quarters, we saw strong sales volume growth in our consumer distribution channel from increased sales of private brand snack nuts, trail mixes, snack mixes and Fisher snack nuts. Sales volume in the consumer distribution channel accounted for 78.2% of total sales volume in the current second quarter. The pandemic has had an unfavorable impact on our food service business, as Mike alluded to. However, food service results have continued to improve in fiscal '21 as a decline in food service sales volume in the current second quarter was 29.4% compared to 63.3% in the fourth quarter of fiscal 2020. It has been a very strong first half of fiscal 2021. As you may have seen from our press release last night, our Board of Directors approved the payment of a special dividend of $2.50 per share. This special dividend will be paid on March 16, 2021, to stockholders of record at the close of business on February 26, 2021. These dividends reinforce our goal of creating long-term stockholder value through the responsible use of cash. These dividends would not be possible without the hard work and dedication of all of our employees. We demonstrated exceptional results despite having to overcome many challenges, including a shortage of capacity in the transportation industry, which our service providers believe is due to driver concerns related to the impact of COVID-19 and an increase in demand driven by additional spending on consumer goods.

From the start of the pandemic, our entire organization came together to keep each other safe while still focusing on building our business. Our teams have not stopped working to drive continuous improvement projects, optimize supply chain efficiencies and maintain best-in-class quality and service levels for our customers and consumers. Turning to sales review by JBSS business channel. The consumer channel distribution increased $3.9 million or 2.1%, and sales volume increased 9.9% in the second quarter of fiscal '21. Our sales, marketing, innovation and R&D teams have been working hard on new product development and distribution. We recently launched Fisher recipe nut flours in the marketplace at the end of our second quarter. Preliminary customer and consumer feedback has been positive, and we are finalizing plans to gain retail distribution. You can already purchase our Fisher nut flours at amazon.com. In addition, our company will be gatecrashing this Valentine's Day with our new Ruby Royale premium gift nut launch. Social media and marketing plans have already been executed, and the product was recently launched on amazon.com as well. So look for it. In the commercial ingredient channel, distribution decreased by 40% in dollars and 23.6% in sales volume in the second quarter of fiscal '21. The decline in sales volume was due to a 29.4% decrease in volume in our food service business. The sales volume decline in our food service business resulted in a decline in air travel and nationwide restrictions on indoor restaurant dining and closures of restaurants, all of which were attributable to the pandemic. In our first quarter of fiscal '21, volume declines were 40%. In this quarter, volume declines were only 30%. Although demand has been suppressed from our food service customers, the rate of decline is recovering from its low point in our fourth quarter of fiscal 2020.

And we believe that as the COVID-19 vaccines become more widely distributed and accepted by the public and restrictions are again loosen, sales volume with our food service restaurant and non-commercial customers will continue to improve, and we expect to eventually return to pre-pandemic levels. I know the food service sales team has been laser-focused on getting expanded distribution in place for our products in preparation for reopenings and reengagement with their customers. In the contract packaging channel, distribution decreased by 12.8% in dollars and 14.1% in sales volume in the second quarter of fiscal '21, compared to the second quarter of fiscal '20. As Mike mentioned, the decline in volume was primarily attributable to the unfavorable impact of lower convenience store foot traffic on our customers' business as a result of the pandemic. Here, too, in the contract packaging channel, we anticipate a slow, but eventual return to pre-pandemic levels of volume as vaccines become more widely distributed and accepted by the public and restrictions are again loosened. Turning to category updates. I will serve some of the insights from this past quarter. As always, all the market information I'll be referring to is the IRi reported data, and for today, it is the period ending December 27, 2020. When I refer to Q2, I'm referring to 13 weeks of the quarter ending December 27. References to changes in volume or price are versus the corresponding period one year ago. We look at the category on IRi's total U.S. definition, which includes food, drug, mass, Walmart, military and other outlets, unless otherwise specified. And when we discuss pricing, we are referring to average price per pound. Breakouts of the recipe, snack and produce categories are based on our customer -- custom definitions developed in conjunction with IRi. And the term velocity refers to the sales per point of distribution. As has been mentioned, COVID-19 had positive and negative impacts upon our results for the second quarter of fiscal 2021.

We continue to see evidence of a shift in consumer preferences to shop in smaller store formats like grocery and online. Growth in private label and moves to larger value sizes continue to drive category growth. The total nut category increased in both sales dollars and pound volume by 4% and 5%, respectively, in Q2. This was slightly behind pound growth we saw in Q1, but ahead in dollar growth. Both pound and dollar growth rates are ahead of the category growth rate last year at this time. Overall prices for the quarter were down 1% versus the prior year. Now I will cover each category in more depth starting with recipe nuts. Based on IRi's total U.S. Multi-Outlet market data, consumers continue to do much more cooking and baking at home. However, consumers also changed holiday behavior with smaller gatherings for Thanksgiving and Christmas, given travel bans and lockdowns. The recipe nut category grew 4% in dollar sales and 6% in pound sales. This is down from the previous quarter of 16% in dollar growth and 13% in pound growth. Despite category growth, our overall Fisher brand continues to be challenged by a decline in distribution with two key retailers. Our Fisher recipe nuts decreased 20% in dollar sales and 19% in pound sales for the quarter versus last year. We did show gains in velocity where we have distribution. This was not enough to offset distribution declines. As a result, Fisher's share in the category decreased 4.9 point -- share points versus last year. Fisher continues to be the branded share leader in the recipe category when using the broader Multi-Outlet definition or within the U.S. food channel. Now let me turn to the snack category. In Q4, the snack category increased 4% in dollar sales and 6% in pound sales. Fisher snack also grew 4% in dollars and 10% in pound volume sales in Q2, with a 17% increase in pound velocity on core Fisher snack nuts, driven by increased promotional activity and an 8% pound growth rate on our Oven Roasted Never Fried line. Pound volume for our Southern Style Nuts brand at retail decreased by 19% in the quarter due to decreases in merchandising and promotional activity, while pound volume for the total trail and snack mix category decreased by 2% in the quarter.

In Q4, the produce net category increased 6% in dollar sales and 4% in pound volume. Orchard Valley Harvest, our produce nut brand decreased 14% in pound sales, resulting in a pound share decline of 0.2 points versus last year. The volume decline was due to reduced promotional activity and lost distribution at some customers. In closing, we face a number of future challenges with the uncertainty of the pandemic and its continued impact on our business, but we also see significant opportunities for growth. Our management team and all our associates are not wasting any time waiting to expand our business. The teams are working incredibly hard to build stronger brands to build more innovative product platforms and to provide higher levels of quality and service. We have a stronger foundation today than we did at the start of the pandemic. And JBSS is positioned well for a bigger and brighter future. We have a dedicated team of leaders throughout the company who are doing what matters most to deliver strong financial results. We are investing in new talent. We are investing in new capabilities. And we are investing in our brands. Fisher recipe, Fisher snack, Orchard Valley Harvest, Squirrel and Southern Style Nuts are all relevant brands in our portfolio with enormous opportunities for growth. And we have the right strategies and human capital to continue to build our business and provide exceptional value and innovation for our customers, our consumers and our stockholders. We appreciate your participation in the call, and thank you for your interest in our company.

I'll now turn the call back over to Mike.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Thank you, Jeff. We will now open the call to questions from participants. Dexter, please queue up the first question.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Chris McGinnis from Sidoti. Your line is open.

Chris McGinnis -- Sidoti -- Analyst

Good morning, thanks for taking my questions and congratulations on another good quarter.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Good morning, Chris.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thanks, Chris.

Chris McGinnis -- Sidoti -- Analyst

I was wondering if we could just maybe start at the growth -- gross margin line. And just talk about, I guess, one, maybe the benefits over the prior year, how much of that is maybe consumer? Now that that's a heavier portion of the mix versus the lower nut prices. And can you just maybe dig into that a little bit more? And then maybe as you think about whether it's the next quarter or the next 12 months, how that plays out in the lower tree nut prices into that margin line for the next year?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

I'll take that, Chris. So as we mentioned in the release, virtually all the improvement on that line came from lower commodity costs. And as we mentioned, it's just about all the major tree nuts that we process, probably with the exception maybe hazelnuts. So it's pretty interesting. It's not something we can recall seeing in recent years where every tree nut is down pretty significantly year-over-year, and that's really what drove that. Going forward, we're pretty much locked in for the remainder of the crop year for the North American tree nuts. And that would pretty much take us through next summer. So our costs are fixed. We do have some more pricing actions to take in January as we typically do. And -- but overall, we think we'll see some margin expansion simply because of the lower acquisition costs.

Chris McGinnis -- Sidoti -- Analyst

Great. All right. So this is in for some time then, this gross margin level, I guess, if you want to call it?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Right.

Chris McGinnis -- Sidoti -- Analyst

Okay. And you said it's unprecedented, can you maybe just shed your insight? Obviously, you've been around it for a long time. Just maybe your thoughts around what's driving kind of the decline in the pricing? And how sustainable that is?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Chris, it's Jeffrey. So it's a combination of things. It's just been an extraordinary year -- a couple of years for growers. So there's been so much more planting of almonds, of walnuts, pecans in some places. So you've just seen an increase in the supply side because the growers have made so much money and it's been such a profitable industry to invest in over the last 10 years. And so now you're seeing the results of those increases in acreage planting. So you've got close to three billion-pound almond crop. You've got a record -- close to record walnut crop, record pistachio crop. Pecan crop in Mexico continues to grow as well as places like South Africa. And so you've seen just increases in supply. And -- but it takes a while for demand to catch up with that. So that's part of the reason you're seeing some of this price deflation today as a result of just larger crops around the world.

Chris McGinnis -- Sidoti -- Analyst

That makes sense. And can you just -- thinking about the pandemic on your business, obviously, consumer, you've obviously benefited from -- I guess as things start to come back on the other two segments of the company, how do you see that playing out on the margin front? And do you want that to come back? Or -- I know it's still important, but this beneficial kind of -- it's obviously benefited the consumer more for you. Can you hold the gains on the other side, too, and a comeback you think in the economy? Just thinking about your portfolio, do you want to change it at all during the pandemic?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes. So as we've talked about, we've seen a shift to e-commerce. We've seen a shift to people eating and cooking at home. I believe as states reopen, you're going to see some of that shift back to, and we hope to see to shift back to food service, where people are going out to eat and traveling again. We expect to see that. I think some of the gains you've seen in consumers, some of that will stick. We're hopeful that we've -- consumers are now used to cooking at home and they've learned to cook at home. That increase we saw in our -- in the recipe program and even down that recipe aisle. And we're hoping that we can maintain some of that volume, even though the pandemic is -- once the pandemic subsides. And so we're hopeful that we can keep that recipe category growing strong, continue to educate consumers on how they can use nuts to cook and what to do with them. And I think the food service piece, our team has been really laser-focused on building distribution so that when states do reopen, we have our product portfolios in place to optimize the volume again in that channel. That's why I'm really confident once we do get back to some new level of normalcy, you'll see that food service piece come back again. It's just a matter of time when states start to reopen, and people are confident and comfortable to go back out to eat again and travel.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Chris, this is Mike. I would add that if we were to see a decline in, say, private label snack nuts and trail mixes in favor of food service, walnuts and pecans, where we're seeing a lot of decline right now, that would actually be a very positive development for us because, as you know, we're vertically integrated in those two nuts. We tend to have better gross profit per pound measures with the nuts that we shell. And that actually, I think, would be a positive for us if we saw that shift.

Chris McGinnis -- Sidoti -- Analyst

Okay. I really appreciate it. And just with some of the lost business on the recipe side, is there an opportunity to go back and get that? I know there has been some talk about that at times and just your confidence around that brand. And obviously, still -- obviously a strong position in that marketplace, but just the ability to go out and gain some more store space.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes. Chris, this is Jeffrey. So we absolutely believe there are opportunities to regain that distribution or some of it. Obviously, retailers are looking at brands every year, and they bid some out every couple of years. If you look at our velocity versus some of our competitors in the marketplace, it's so much higher. And I believe we really invest in our consumers, we invest in educating people on recipe nuts. I just think we have a very strong -- we have very strong brand equity with Fisher. And I think with the marketing efforts that we're making and some of the changes in our brand positioning, we're bringing value to retailers that carry Fisher. I really believe that some of the lost distribution, we can get -- we can regain that with some of the success stories we're having in other places.

Chris McGinnis -- Sidoti -- Analyst

About maybe -- is there opportunities for M&A in this environment for you? And maybe just your thoughts around what maybe the confidence of the competitive landscape as well?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Sure. Sure. So we always look at M&A. We've talked about it periodically on this call. So we're always looking at companies. Nothing that has been that important or we felt was that strategic that made sense for us at this point, or perhaps pricing wasn't right. But we are continually looking at opportunities in M&A, whether it's a new capability that we currently don't have, it's a new product platform or it's got a brand that reaches a consumer that we currently don't reach. A lot of opportunities and strategies we have in M&A, and we'll continue to look at them. Just nothing that made sense up till now.

Chris McGinnis -- Sidoti -- Analyst

And maybe can you just talk on the competitive landscape at this point? Or I guess just the -- all the different changes, moving parts within the industry. Just how are they attacking maybe the consumer side?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes. So obviously, competitors are responding to the pandemic and just trying to understand the dynamics with consumption trends and consumer behavior. So we've seen some of our competitors, Diamond, for example, being very aggressive on building their recipe nut distribution. Planners has been aggressive investing in their brands and trying to continue to expand distribution. And so the brands are still there trying to play a stronger role at retail and on the shelves and try to mitigate some of the impact that these big private brand programs are having with shelf space. But we don't anticipate major changes with competitors. I just think you're going to see people watching what happens with the pandemic and continued changes in consumer behavior and respond accordingly.

Chris McGinnis -- Sidoti -- Analyst

Sure. Okay. Thanks for taking my questions and good luck in Q3.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thanks, Chris.

Operator

Your next question comes from the line of Timothy Call from Capital Management. Your line is open.

Timothy Call -- Capital Management. -- Analyst

Congratulations on another great quarter. I look forward to the new products.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Thanks, Tim.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thanks, Tim.

Timothy Call -- Capital Management. -- Analyst

Do you expect interest expense to decline over upcoming years as you pay down long-term debt to close to 0?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Yes. Basically, our average interest rate on long-term debt is about twice as much as it is on short-term debt. And all of our debt amortizes. So yes, we do.

Timothy Call -- Capital Management. -- Analyst

There were some capital expenditures with the pandemic. Do you expect capital expenditures to go down over time post pandemic?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

The capital expenditures we made for the pandemic actually were a pretty small percentage of our total capex in fiscal 2020. Our plant was actually pretty well laid out. That allowed us to create a safer working environment without a lot of capex. The big increase in capex that you're seeing for fiscal '21, that we disclosed in our 10-K at the end of 2020, is really attributable to product line expansion.

Timothy Call -- Capital Management. -- Analyst

That's great. You had near record sales and earnings and consumer sales were 82% of the base, which is huge. As the economy reopens, I think you said you believe you have enough capacity when food service and specialty retail sales and other areas open up and demand nuts from you. I believe you said you have enough capacity to handle that from these levels. Is that right?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

That is correct. Yes. We've got an amazing infrastructure at all our facilities, Tim, and we've invested over the years. And as our business grew, we invested in new packaging, new capabilities, robotics. It just extraordinary investments we've made in manufacturing. So as we -- even if product line shift or volume shifts, we've got available capacity to meet those demands. So as food service comes back and we see that growth return, we've got the capacity to handle that additional growth, in addition to keeping the volume growth we've seen in the consumer channel.

Timothy Call -- Capital Management. -- Analyst

That's terrific. Do you expect to sell the Garysburg facility?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

We haven't made a final decision on that yet. But currently, we do have inventory there. We are doing some shipping and receiving. More than likely, we probably will put it up for sale in the fourth quarter, but we're still studying our options.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes, if you have a buyer, Tim, let us know.

Timothy Call -- Capital Management. -- Analyst

Yes. On their last call, Smucker indicated they had a solid Jif price increases due to higher costs and they thought those price increases would stick long term. Meanwhile, we have Conagra buying -- or selling Peter Pan and other nut lines to Post. How does this competitor activity affect your company?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Well, the peanut butter business -- the majority of our peanut butter business is private brands. We took some pricing activity early -- mid last year remember the timing?

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Because of the crop.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes, because of the crop. So we did take some pricing in mid last year because of the pricing just as Smucker's and some other brands did. We anticipate -- I don't anticipate huge changes in the peanut butter segment. It's still a strong segment. I think you're seeing growth there as a result of kind of the current economy today. It is a low price, high-protein item for families. And so we've seen a lift with our current private brand peanut butter customers as well as obviously, the food pantries around the country. Huge growth and demand there.

Timothy Call -- Capital Management. -- Analyst

Well, thank you for all your hard work and success we appreciate it.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thanks, Tim, for your support.

Operator

[Operator Instructions] There are no further questions at this time. I would now like to turn the conference back to you, Mike Valentine.

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Okay. Thank you, Dexter. Again, thank you, everyone, for your interest in JBSS, and this concludes the call for our second quarter fiscal 2021 operating results. Have a good day.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Michael J. Valentine -- Chief Financial Officer, Group President and Secretary

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Chris McGinnis -- Sidoti -- Analyst

Timothy Call -- Capital Management. -- Analyst

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