PARSIPPANY, NJ. — The ability to leverage innovation and cross-selling opportunities to expand placement of core products and brands helped deliver strong second-quarter earnings and sales at J&J Snack Foods Corp.

Net income at J&J Snack Foods in the second quarter ended March 30 totaled $13.33 million, equal to 69¢ per share on the common stock, up 94% from $6.87 million, or 36¢ per share, in the same period a year ago. Net sales increased 6.4% to $359.73 million from $337.85 million.

“We have a wonderful business with tremendous growth opportunities ahead of us, and we continue to see that in our financial results,” Daniel Fachner, president and chief executive officer, said during a May 7 conference call with analysts. “Our strong top-line performance combined with gross margins exceeding 30% in the quarter, a 330-basis points improvement over last year, is a result of executing our strategy, including focused initiatives to improve profitability.”

Foodservice operating income at J&J Snack Foods increased 55% to $7.93 million from $5.13 million. Sales increased 5.4% to $229.99 million from $218.28 million. Within the foodservice division, sales of bakery products were $91.91 million, up from $85.3 million in the same quarter a year ago, while sales of churros climbed 24% to $30.83 million from $24.92 million. Sales of soft pretzels eased 2.1% to $54.33 million from $55.49 million. Sales of handhelds also decreased, falling to $19.5 million from $20.31 million.

“Churros sales continued their strong growth momentum, increasing 23.7% to nearly $31 million led by new business growth of one of the three largest QSR customers,” Fachner said. “Recent investments to add two new churro production lines have us well positioned to capture incremental opportunities in the churro category, and we expect the continued growth throughout the year, including international opportunities as well.”

In the retail supermarket segment in the second quarter, operating income surged to $5.11 million from $487,000 in the previous year’s second quarter. Sales increased 11% to $52.89 million from $46.36 million. Within the retail supermarket segment, sales of soft pretzels inched up narrowly to $16.45 million from $16.01 million. Sales of frozen novelties increased 14% to $23.68 million from $20.77 million, while sales of biscuits rose 5.9% to $6.21 million from $5.86 million. Sales of handheld items rose 76% to $7.19 million from $4.1 million.

In the frozen beverages segment, J&J Snack posted operating income of $4.86 million, up 6.3% from $4.57 million in the same period a year ago. Sales increased 5% to $76.85 million.

During the call, Fachner highlighted the work of the company’s R&D team, pointing to their efforts to create new products, better packaging and product extensions.

“Recent accomplishments include the launch of Hola! Churros in retail, the addition of new Dogsters pumpkin flavor, new Dogsters club channel packaging, Brauhaus Bavarian packaging in foodservice, a new Cakeables cookie brand, and the launch of Superpretzels soft pretzel buns in the in-store bakery.

“We also recently announced the acquisition of the Thinsters brand, which provides us with strong brand and quality product to add to our cookie portfolio. Thinsters are predominantly sold in the club and retail channels, servicing existing customers of ours. We have been producing this product for the previous owner, so this will be a seamless integration and a quality brand that we can build across both retail and foodservice. Our team is relentlessly focused on innovation and creating new selling opportunities.”

On the operations side, Fachner said J&J Snack Foods has enhanced its supply chain with the opening of three distribution centers in Carroll, Texas; Woolridge, NJ; and Glendale, Ariz.

“These three new RDCs are exceeding expectations and will enable us to continue driving productivity improvements in our supply chain,” he said. “At this time, 81% of our sales orders are shipped from the new distribution network versus only 26% a year ago, with the average length of haul decreasing by over 40% and the on-time performance improving to 87% versus 74% a year ago.”

He said the addition of six new production lines also has “significantly” expanded capacity and given J&J Snack Foods the ability to meet growth opportunities across pretzels, churros and frozen novelties, opening the door to new customers and channels.

“Two new frozen novelty lines have added critical capacity and flexibility during the peak summer season,” Fachner said. “They’re also allowing us to make similar products in different locations, leading to freight savings. The new churro line also increased capacity and provided us with the capability to meet the growth we anticipated in churros. Our two new pretzel lines in Texas and New Jersey immediately created capacity to meet market demands that we could not previously serve, while also creating growth opportunities in foodservice for Bavarian pretzel bites, retail division expansion, and in-store bakery innovation.

“Overall, the expanded capacity has created production efficiencies and higher output metrics through better automation, which improves product margins, decreases over time, and provides the flexibility to meet un-forecasted additional sales during peak summer business.”