John B Sanfilippo & Son Inc (JBSS) Q3 2021 Earnings Call Transcript

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John B Sanfilippo & Son Inc (JBSS -1.75%)
Q3 2021 Earnings Call
Apr 29, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to John B. Sanfilippo and Son, Inc., Third Quarter Fiscal 2021 Operating Results Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mike Valentine, Chief Financial Officer. Thank you. Please go ahead, sir.

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

Thank you, Dee. Good morning, everyone, and welcome to our 2021 Third Quarter Earnings conference call. We thank you all for joining us today. On the call with me is Jeffrey Sanfilippo, our Chief Executive Officer and Jasper Sanfilippo, our Chief Operating Officer. Before we start, we want to alert you to the fact that we may make some forward-looking statements today. These statements are based on our current expectations, and they involve certain risks and uncertainties. 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 income statement, net sales for the third quarter of Fiscal 2021 decreased 1.8% to $207.9 million from net sales of $211.6 million for the third quarter of Fiscal 2020. The decrease in net sales was mainly attributable to a 1.2% decrease in sales volume, which we define as pounds sold to customers. Sales volume declined primarily due to a reduction in sales volume for almonds and peanuts. This was offset in part by increased sales volume for trail and snack mixes. Sales volume increased in our consumer distribution channel by 9.1%, and that was due to an 11.8% increase in sales volume for private brand snack nuts and trail and snack mixes. The increase in sales volume for these private brand products came from new distribution at existing customers, a shift in consumer preferences to lower-priced private brand products and growth in snacking as many consumers continue to purchase food for consumption at home while they work at home. Sales volume in the consumer distribution channel accounted for 77.7% of our total sales volume in the current third quarter.

Now looking at sales volume for our brands and our consumer channel, sales volume for Fisher recipe nuts fell 6.4%, and that was primarily due to loss distribution at two grocery customers. The 21.4% decrease in sales volume for our Orchard Valley Harvest brand was attributable to lower foot traffic and a major customer in the nonfood sector due to COVID 19. Fisher snack nut sales volume decreased 3.1%, primarily due to reduced merchandising activity for Fisher and shell peanuts as we are in the process of discontinuing that product line. And we expect to have that completed by the end of the upcoming fourth quarter. Sales volume for Southern Style nuts decreased 14.2% due to the discontinuance of an item at a major customer. Sales volume decreased in the commercial ingredients channel by 29.8% due to a 25.7% decline in sales volume in our foodservice business and a decline in sales of peanut crushing stock to peanut oil processors. The decline in foodservice sales volume was mainly due to a decline in air travel and continued nationwide restrictions on indoor restaurant dining as a result of COVID-19.

Sales volume declined in the contract packaging distribution channel by 19.2%, and that was primarily due to the unfavorable impact of lower convenience store foot traffic on one customer's business, again as a result of COVID-19. The net sales for the first three quarters of the current fiscal year decreased to $651.7 million from $675.9 million for the first three quarters of Fiscal 2020. The decrease in net sales was attributable primarily to a 2.7% decrease in our weighted average selling price for our products, which, in turn, was due to a decline in commodity acquisition costs for all major tree nuts. Sales volume decreased 0.9%, primarily due to a reduction in sales volume for almonds and peanuts, and that was partially offset by increased sales for trail and snack mixes. The decline in sales volume, especially for almonds, also contributed to the decline in net sales. Sales volume increased 7.7% in the consumer distribution channel, primarily for the same reason I discussed in the quarterly comparison. Sales volume decreased 27.1% in the commercial ingredients distribution channel, mainly as a result of a 32.5% decline in sales volume in our foodservice business. And again, the food -- the decline in food service sales volume occurred for the same reasons I discussed in the quarterly comparison. Sales volume declined in the contract packaging distribution channel by 15.1%, primarily for the reason I cited in the quarterly comparison as well as the loss of peanut butter business with another customer, which was attributable to a temporary peanut supply shortage that existed in the first quarter of fiscal 2021.

Third quarter gross profit increased $3.2 million and gross profit margin as a percentage of net sales increased to 22.1% for the third quarter of fiscal 2021 from 20.2% for the third quarter of fiscal 2020. The increases in gross profit and gross profit margin were attributable primarily to lower commodity acquisition costs for all major tree nuts. Gross profit for the first three quarters of the current year increased $3.1 million and gross profit margin as a percentage of net sales increased to 21.2% from 20% for the same period last year. Again, the increases in both gross profit and gross profit margin were due to the lower commodity acquisition costs for all major tree nuts. Total operating expenses for the current third quarter increased to 12% of net sales from 11.1% for last year's third quarter. In total, operating expenses for the current third quarter increased to $24.9 million from $23.4 million in the quarterly comparison. The increase in total operating expenses was due to a $1.5 million increase in freight expense, and that resulted from significantly higher freight rates compared to freight rates in last year's third quarter and to a lesser extent, an increase in sales volume for sales made on a delivered basis to our customers. Total operating expenses for the current year-to-date period increased slightly to 10.8% from 10.7% of net sales for the first three quarters of Fiscal 2020, and total operating expenses decreased $1.7 million.

The decline in total operating expenses was due to a $2.3 million gain from the final insurance recovery that was recognized in the second quarter of Fiscal 2021. This insurance recovery related to the Garysburg, North Carolina facility fire that occurred in the second quarter of Fiscal 2020. The impact of that insurance recovery gain was offset in part by increases in freight, insurance and consulting expenses, net of decreases in advertising, incentive compensation and travel expenses. Interest expense for the current third quarter decreased to $300,000 from $600,000 in last year's third quarter, and interest expense for the first three quarters of the current year decreased to $1.1 million from $1.5 million for the first three quarters of Fiscal 2020. The decrease in interest expense in both comparisons primarily resulted from lower average debt levels. Net income was $14.7 million or $1.27 per diluted share for the third quarter of fiscal 2021 compared to $13.5 million or $1.17 per share diluted for the third quarter of Fiscal 2020. Both net income and EPS were records for a third quarter. Net income for the first three quarters of Fiscal 2021 was $47.4 million or $4.1 per share diluted compared to net income of $43.9 million or $3.80 per share diluted for the first three quarters of Fiscal 2020.

Now taking a quick look at our inventory, the total value of our inventories on hand at the end of the current third quarter decreased $36.8 million or 19.5% compared to the total inventory value at the end of the third quarter of Fiscal 2020. The decrease in the value of total inventories was primarily due to lower commodity acquisition costs for all major tree nuts. Also lower quantities of peanuts, almonds and pecans, contributed to the decline in the total value of inventories on hand. The weighted average cost per pound of our raw nut and dried fruit input stocks on hand decreased 17.8%, again due to lower acquisition costs for all major tree nuts.

And now, I will turn the call over to Jeffrey Sanfilippo, our Chief Executive Officer, to provide additional comments on our operating results for the third quarter of Fiscal 2021. Jeffrey?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thank you, Mike. Good morning, everyone. As was the case in the second quarter of Fiscal 2021, we reported record net income and diluted earnings per share despite the continuing challenges we faced in our food service business and our contract packaging distribution channel and with our Orchard Valley Harvest brand due to the impact of COVID-19. These record results were, again, driven in large part by lower commodity acquisition costs, as Mike mentioned, for all major tree nuts and strong sales volume growth for private brand products in our consumer distribution channel. And we continue to see improvement in our foodservice business as we did in the first two quarters of Fiscal 2021, with dining out and air travel having increased. Our record performance over the last two quarters put us in a strong position to pay a $2.50 per share special dividend during the current third quarter. Team members from every department across our organization worked hard and led with dedication and commitment to deliver these strong results and service our customers and consumers.

At this time last year, our company established a COVID-19 crisis management team that had met daily to discuss risks faced by the company and mitigation strategies. Here we are one year later, continuing to follow recommendations made by state and federal regulators and health agencies to ensure the safety and health of our employees as those recommendations change and evolve. But I'm happy to share that the crisis team has now pivoted to being a recovery team with a focus on getting our team members vaccinated. A few weeks ago, we organized a free voluntary COVID-19 immunization clinic, which was held on-site at our Elgin, Illinois facility. The company in partnership with Jewel-Osco administered 1064 Pfizer vaccinations to employees and their families. The second dose will be administered next week. JBSS is in the process now of facilitating clinics at each of our manufacturing locations. In addition to this important initiative, the recovery team is coordinating our reimagined workforce, which will provide for flexibility on when and where people work in our organization to support our business and take care of our customers and consumers. One key learning from the pandemic is that many of our associates prove they could work remotely and still meet goals and objectives while continuing to nurture collaboration and connection. At the same time, being apart from each other has also made us realize how much we value being together in person. And there is often no substitute for live collaboration, connection and celebration to maintain a strong JBSS culture.

In our operations, there are short-term external headwinds to manage driving up costs as we navigate and transition into a post pandemic environment. For example, the wood and pallet industry has been impacted for several months now with low inventory levels due in part to labor and lumber shortages. The pallet shortage has impacted our operations, primarily at our Elgin facility and led to some cost increases. We anticipate the industry to see some relief in the coming quarters. In the interim, we are working with our vendors, customers and JBSS facilities in other regions of the country to source additional supply. Also during Fiscal 2021, there is a shortage in capacity in the transportation industry. Compounding this driver shortage is an increase in demand driven by additional spending on consumer goods. This tightening in transportation capacity, including rail and ocean freight is expected to continue in Fiscal 2022, has led to increased transportation costs. Despite these headwinds, there are bright signs of demand recovery in specific business segments. I've shared the negative impact on our food service and contract manufacturing business and volume demand declines in convenience stores and nonessential retail customers due to reduced foot traffic, while people continue to work from home. The good news is that 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 vaccine becomes more widely distributed and accepted by the public and restrictions are again loosened, sales volume will -- with our foodservice, restaurant, convenience store and nonessential retail customers will continue to improve. And we've already started seeing significant growth in our backlog these past few weeks.

Turning to sales review by channel. Net sales in the consumer distribution channel increased 6.8% in the third quarter of Fiscal 2021. As Mike mentioned, the increase was driven by growth in private brands from several of our key retail partners. They continue to benefit from elevated at home food demand driven by the pandemic. For our branded business, there is much work to be done. The marketing, innovation, R and D and insights teams have been working extremely hard on brand positioning, product differentiation and consumer engagement. A lot of heavy lifting is taking place right now to build stronger brands and sales distribution plans for the coming year. The teams are prioritizing core brand initiatives and enhancing product portfolios. For example, the Fisher nut flower program is gaining momentum with new distribution gains as we capitalize on the ongoing increased demand for food at home as well as the rise in cooking and baking. Net sales in the commercial ingredient distribution channel decreased 30.5% in dollars.

As we've shared previously, reduced away-from-home demand is a significant driver of these declines. But throughout this past year, our foodservice and industrial teams have set us up for a strong recovery by developing strategic partnerships and getting product placement in locations where it matters. And we are seeing positive leading indicators in our order backlog that business demand is coming back in this channel. Net sales in the contract packaging distribution channel decreased 23.2% in dollars. Again, one of the negative impacts of COVID-19 is the decline in people visiting convenience stores throughout the country, where our largest customer in this channel has significant sales concentration, but this too is beginning to recover as we see growing demand in this channel.

Turning to category updates. I will share some of the brand results with you and category updates for the quarter. As always, all the market information I'll be referring to is IRI reported data, and for today, it is for the period ending March 2021. When I refer to Q3, I'm referring to 13 weeks of the quarter ending March 21. 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 nut categories are based on our custom definitions developed in conjunction with IRI. And the term velocity refers to the sales per point of distribution. As we've mentioned for the past year, COVID-19 had positive and negative impacts upon our results for Fiscal 2021. In the last four weeks of Q3, however, we started to lap the beginning of the pandemic and the large pantry bill that happened in March of 2020. The total nut category and JBSS volume both declined in the last four weeks versus prior year; while results for the quarter are mixed. The total nut category was flat in both sales dollars and pounds in Q3. This is down versus the dollars and pound growth we saw in the first half of the year. This is primarily driven by the lap of the March pantry build from last year, as mentioned previously. Overall prices for the quarter were flat versus the prior year.

Now I'll cover each category in much more depth, starting with recipe nuts. The recipe category grew 5% in dollar sales and 7% in pound sales. This is consistent with the growth that we saw in Q2. The category saw significant growth throughout the pandemic, driven by more consumers cooking and baking at home. Despite category growth, our overall Fisher brand continues to be challenged by declining distribution with two key retailers. Our Fisher recipe nuts decreased 15% in dollar sales and 10% in pound sales for the quarter versus last year. We did see gains in velocity, but this was not enough to offset distribution declines. As a result, Fisher's share in the category decreased 2.4 pound share points versus last year. Fisher continues to be the branded share leader in the recipe category when using a broader multi outlet definition or within the U.S. food channel. Now, let me turn to the snack category. In Q3, the snack category declined dollar sales 2% will remain flat in pound sales. Fisher snack grew faster than the category, up 1% in dollar sales and up 9% in pound sales in Q3, driven by strong pound velocity on core Fisher snack nuts; up 19.5%, driven by increased promotional activity. The trail and snack mix category declined dollars and pounds in Q3 by 6% and 8%, respectively. Our Southern Style Nut brand performed better than the category, though still declined 4% in pounds and dollars due to lost distribution on a flavor variant at a major retailer. In Q3, the produce nut category increased 6% in dollars and 5% in pound volume. Orchard Valley Harvest, our produce nut brand, decreased 16% in dollar sales and 18% in pound sales, driven by lost distribution and aggressive competition -- competitive action.

In closing, it is extraordinary how the world has changed since our third quarter last year, but our company and our team of dedicated leaders and frontline associates throughout our organization remains steadfast and strong. We adapted quickly to the dramatic changes in consumer behavior and seized opportunities to follow consumption growth in e-commerce and elevated demand with our private brand retail partners. We've made good progress on our Fiscal 2021 priorities; building a stronger commercial team and fueling investment in our brands and manufacturing capabilities. Looking ahead, we remain focused on strengthening our momentum and emerging from the pandemic, a stronger company, even better positioned to drive long-term shareholder value. We will continue to prioritize the health and productivity of our associates and follow the most up-to-date guidance from health authorities to ensure we are doing all we can in our manufacturing facilities and offices to keep everyone safe. Lastly, we have the right strategies, the right talent and the right business model to continue to grow and provide exceptional value and innovation for our customers and consumers. We appreciate your participation in the call, and thank you for your interest in our company.

I will now turn the call back over to Mike.

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

Okay. Thank you, Jeffrey. At this time, Dee, can you please queue up the first question?

Questions and Answers:

Operator

Yes. Your first question comes from the line of Chris McGinnis of Sidoti and Company.

Chris McGinnis -- Sidoti and Company -- Analyst

Thank you for taking my question and nice quarter. I know you mentioned increases in freight, and it sounds like pallet, but outside of that, the raw material is coming down. I think you're probably the only industry I cover that sees deflationary raw material cost. Can you just talk about maybe the outlook there? How confident or what you think in terms of raw material costs over the next maybe 12 months as you see it, ag has obviously seen increase in some pricing. So I'm wondering how that could possibly impact you longer term?

Jasper B. Sanfilippo Jr. -- Chief Operating Officer, President and Assistant Secretary

Yes. Chris, this is Jasper. As it stands now, we're covered through the fall. Obviously, we bought our crops last year. So our positions are very good through fall. Certain crops have not really developed yet. For example, pecans and walnuts are just coming off of bloom. It looks like we have a decent almond crop. Cashews are pretty tight. So we're not necessarily seeing that there's going to be anything that could be really impactful from a major price increase unless we have some disasters as these crops are developing. From a labor standpoint, there's nothing really that we're seeing as well that's going to cause any effect there. So I think commodities will stay stable for the first half of our year. And then depending on harvest and crop sizes, we'll determine the back half of the year.

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

Yes. And Chris, I would also add that we have some pretty significant carryovers on just about all the tree nuts, except cashews. So that should also keep a lid on those market prices.

Chris McGinnis -- Sidoti and Company -- Analyst

Great. And I guess just that -- I don't want to call it elevated because it's been here for a while, but just that margin profile that you've been hitting that on the growth side. Should that be sustainable for the next few quarters given the commentary you just gave me?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes. Chris, this is Jeffrey. I would expect that at home demand to still continue. I think people are still slowly getting back into traveling and eating out. But I expect this next probably two quarters, you'll see that slowly. I think you're going to see that maintain, but you'll slowly see that increase, as I talked about in the foodservice channel and the contract packaging channel as people are more comfortable going out again.

Chris McGinnis -- Sidoti and Company -- Analyst

Okay. And just on the impact of that margin profile. Okay. I understand that. And I guess just in thinking about some of the loss, I guess, the changes with maybe Fisher, maybe the recipe. Can you just talk about some of the lost channels, how you're going to approach that? You made some commentary that you're kind of refocusing a little bit on some of the loss share. Can you just talk about how you're going to change that strategy going forward and take that back over the next six to 12 months?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Sure. So if you look at -- start with Fisher recipe, so that business was up for bid at two major retailers. And unfortunately, we lost that distribution to another brand. But that business comes up again in the next year. I think both of them come up in the next year or so. So we're working hard to build our brand equity, looking at the product innovation in the category. I mentioned the nut flower, which we're having great success in getting new distribution there. So really doing better at positioning the brand equity and the product portfolio. So when those bids come back up, again, we're positioned really well to pursue that business. At the same time, I talked about velocity. And so when you need velocity, it's how much you're turning in a store where you have distribution. And we've done a great job at building that velocity through promotional activity, through consumer engagement. So we've got great success stories at other retailers where we have Fisher distribution and our goal is to take those success stories and demonstrate to retailers where we don't have distribution why they should have Fisher in their sets. So that's Fisher recipe. Orchard Valley Harvest, our health and wellness brand and produce brand. A lot of work being done there on understanding our consumer and how we can differentiate that brand and product portfolio. So the team is working hard on something you'll see in the coming months.

We've been in the test market with something called chickpea chips with our OVH brand. Our R and D team has developed some great new flavor profiles for that brand. So you'll see us enter that market in a stronger way in the salty snack section. And then Squirrel is our indulgent brand. A lot of work being done there. We did a great Valentine's promotional program with a brand, a product called Ruby Royal; very successful on QVC. And so we're looking at that product portfolio as well and elevating the type of products that we put in under our Squirrel portfolio to engage new consumers and build that brand. So a lot of opportunities on the branded side. Heavy lifting being done now, as I mentioned, to build those brand positioning and develop consumer engagement, but very excited about what we're going to do with the brands in the future.

Chris McGinnis -- Sidoti and Company -- Analyst

I really appreciate it. That's very helpful. Just to touch on the trail and snack mix, obviously, pretty strong the last few quarters. How much room does that still have to grow? Is that more of the change in consumer, the expansion with the distribution customers. Can you just talk about that because that's been a really strong channel for you for a while now.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Sure. Yes. So trail mix has always been a very strong segment in the category. We did see some shift to lower cost trail mixes, especially with peanuts as consumers looked at the economy and just income in general. So we did see a shift to lower cost trail mixes. But we also see growth in the health and wellness trail Max. If you look at something like a keto mix, which is relatively new to the category, we're seeing substantial growth with that type of health and wellness, trail mix. And I think you'll continue to see more development in that segment of trail mixes with more health and wellness type of products.

Chris McGinnis -- Sidoti and Company -- Analyst

I appreciate that. And then you just mentioned the competitive landscape increasing a little bit in some components. Can you just maybe discuss that broadly across any of the portfolio? Have you seen any real change in strategy in terms of pricing?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Not really. I think people have been very, I think, really just trying to manage through the pandemic. We haven't seen any huge competitive price changes. Obviously, as the -- we saw price deflation, a lot of that was passed on to consumers through lower retail prices. But also what it's allowed us to do is create more meaningful promotions when we saw these lower commodity costs coming through, trying to attract new consumers to the nut category and hit price points that we were never able to hit before. And so I think all of the competitors have been very focused on getting through the pandemic, but also managing their pricing and making sure that they're driving promotions like we are. We've got -- obviously, with competitive activity, we know of Hormel's acquisition with Planters. We haven't seen any changes yet. Obviously, it's relatively new, and that process is still going through. But we would monitor that and expect to see some things come out of that transition once Hormel takes over the brand.

Chris McGinnis -- Sidoti and Company -- Analyst

Yeah, thank you. And then just, obviously, a strong balance sheet. Just your thoughts around capital and any M and A opportunities out there that you see? Thanks.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Sure. Chris, we're always looking at M and A. It's important to look at what's outside of just our current product portfolio or capabilities. So we've looked at a few companies. We're constantly looking at businesses. I think this past year, our focus has really been on our base business, our core products, reimagining our brands, taking care of our workforce. But M and A definitely will be something -- it's something we always look at and something that will continue to be part of our strategic growth plan.

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

And then, Chris, we're also making a major investment to enter a new product category, that investment has already started and will continue through Fiscal 2022, and then we'll start to see some benefits of that investment in Fiscal 2023. It's a major project for us.

Chris McGinnis -- Sidoti and Company -- Analyst

Is that a new product offering that has been announced? Or is that a new product offer not -- not yet announced.

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

It has not been announced.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Soon.

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

Yes.

Chris McGinnis -- Sidoti and Company -- Analyst

Okay. Well, thank you very much. That's very important. I appreciate that. Good luck in the next quarter and thank you very much for answering my questions. I appreciate that.

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

Okay Chris. Thanks.

Operator

Your next question comes from the line of Tim Call with Capital Management.

Tim Call -- Capital Management -- Analyst

Congratulations on a strong quarter.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thanks Tim.

Tim Call -- Capital Management -- Analyst

This seemed to be your last quarter with hard comparisons. And yet you reported strong quarterly results. And so with easier comparisons and volumes down in quarters in the previous year. Should we expect to see an acceleration of fundamentals?

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

Well, actually, our fourth quarter was a monster quarter last year because of pantry building. So we still have one more quarter of a challenging comp. But I agree with you after that, we should be able to build some momentum there.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

And also add, Tim, that we -- as I mentioned during the call, we are seeing a strong recovery, especially in our foodservice channel. Our industrial channel is coming back. The consumer group -- really, all of our sales and marketing teams have done an extraordinary job, putting us in a strong position with distribution and new product placement and strategic partnerships that will really matter as the economy changes and as the market changes post pandemic. You're starting to see those results flow through, as I mentioned, the back order log now.

Tim Call -- Capital Management -- Analyst

So contract manufacturing might come back. Food service used to be 10% of your overall sales and your branded products are sold through a lot of stores that were closed during the pandemic. So should we -- are you able to handle all the increased demand that might occur from all those areas at the same time. And when we think of companies that could greatly benefit from the reopening of America, should we think of your firm?

Jasper B. Sanfilippo Jr. -- Chief Operating Officer, President and Assistant Secretary

Yes, Tim, this is Jasper. From a capacity standpoint, we're well prepared to be able to handle the increased demand. Some of those product lines like food service, for example, have dedicated equipment. So if we get back to normal levels, the equipment that we have will be sufficient to meet that demand. And we've always been continually investing on our retail side, either through rigid packaging like PET jars, cans or stand-up bag. So I think we'll be -- we're in good shape on capacity.

Tim Call -- Capital Management -- Analyst

And you mentioned Planters, and hopefully, there's some disruption there, but their last calendar year had sales of roughly $1 billion of those Planters product lines that were sold. And the sales price was around $3.35 billion, cash. Your last fiscal year, you had sales of around $0.9 billion. And your market cap and the stock market is around $1 billion; very little debt. Is there -- there seems to be a vast difference in valuation of what the market was paying for Planters and what the market is paying for your firm, what do you think can be done to narrow that gap? Do you think just more investors need to find out about John B. Sanfilippo?

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Yes. So Tim, one of the big things, and we were surprised at the multiple was paid for Planters. It's a great brand. It's the heritage brand. I think Hormel will do a nice job with it. But I think when you look at our comparison in profit, but in valuation, brands are important to investors, as we all know, high margin, much better control in some cases over -- or the future growth of the brand. And so as we continue to build our brands across our portfolio, in addition to complementing our private brand and industrial business and contract packaging business. I think that's where we'll see that multiple start to grow. The stronger brands that we can have, the stronger market share, the bigger distribution we have across the country, I think the stronger multiple you'll see in the company.

Tim Call -- Capital Management -- Analyst

Well, thank you for all your hard work. It's great seeing it pay off. Congratulations on a great quarter.

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Thank you. Appreciate it Tim.

Jasper B. Sanfilippo Jr. -- Chief Operating Officer, President and Assistant Secretary

Thank you Tim.

Operator

[Operator Instructions] I'm showing no other questions at this time.

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

Okay. Since there are no other questions, thank you again for your interest in JBSS, and this concludes the call for our third quarter of Fiscal 2021 operating results.

Operator

[Operator Closing Remarks]

Duration: 38 minutes

Call participants:

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

Jeffrey T. Sanfilippo -- Chairman and Chief Executive Officer

Jasper B. Sanfilippo Jr. -- Chief Operating Officer, President and Assistant Secretary

Chris McGinnis -- Sidoti and Company -- Analyst

Tim Call -- Capital Management -- Analyst

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