J&J Snack Foods Corp., the Pennsauken company that makes Superpretzel soft pretzels, Icee frozen drinks, and other snacks and beverages, warned investors Monday that COVID-19 shutdowns would have a “decidedly negative” impact on its financial results.
Two-thirds of the company’s $1.2 billion in annual revenues — or nearly $800 million — come from locations, including movie theaters, sports stadiums, schools and other outlets, whose operations have been closed or reduced in response to the spread of the virus.
The company’s forecast was much more downbeat than on March 12, when the company said that only a third of its business was impacted. The downturn reflects how government has broadened its efforts to contain the virus, demobilizing large swaths of the economy.
J&J Snack also sells through up to 90% of the nation’s supermarkets, but those sales accounted for only 10% of J&J’s revenue in the year ended Sept. 28, 2019. Supermarket sales could increase, but not nearly enough to offset losses from other outlets, the company said.
The company said in its annual report that it employs 4,600 full- and part-time workers, plus 1,500 additional workers supplied by staffing agencies. The firm did not respond to questions about the impact, if any, of its workforce.
J&J’s shares closed down 12.42% Monday to $108.42, down 42% from January, when COVID-19 was first discovered in the United States.
Other Philadelphia-area companies are also responding to the growing impact of COVID-19.
On March 10, Crown Holdings Inc., makers of beverage and food cans, said its board authorized the buyback of up to $250 million shares of the Yardley packaging company. “The repurchase authorization is being put in place today as a result of the extraordinary market conditions due to the current coronavirus (COVID-19) crisis,” the company said.
At that point, Crown’s shares had fallen 20%, to $64 from a February peak of $80. They’ve since fallen an additional 32 percent, to close Monday at $43.69, down 6.96% from Friday’s close.
That’s happened “even though its primary beverage can business is fairly recession-resilient and there isn’t as yet much news of canceled orders or disrupted production,” according to a report Friday by Gimme Credit, a Chicago bond-ratings firm.
Analyst Kimberly Noland said in the report that the shutdown of bars and restaurants would hurt demand for beverages, a trend partially upset by consumer stockpiling.
Gov. Tom Wolf’s order last week that all “non-life-sustaining” businesses should close their physical locations led Knoll Inc., an office furniture manufacturer, to announce that it was temporarily suspending production at its factory in East Greenville, Montgomery County.
In all, the location has 350 hourly employees. Some of them work in warehousing and distribution and are not affected by Wolf’s order.
Knoll said it was trying to get a waiver so it could continue production in East Greenville because “it provides workplace products to the United States government and health-care organizations.”
A spokesperson for the Pennsylvania Department of Community and Economic Development had no immediate information on waivers Monday morning.