In Tuesday trading, there were 30 new 52-week highs on the NYSE and 35 new 52-week lows. Meanwhile, there were 19 new 52-week highs on the Nasdaq and 96 new 52-week lows. 

Among the 96 new 52-week lows on Nasdaq was J&J Snack Foods (JJSF), a New Jersey-based small-cap that manufactures snack foods and frozen beverages. Its brands include SuperPretzel, Icee, Hola Churros, and many more.

 The company reported Q2 2025 results yesterday before the markets opened. Missing on the top and bottom lines, JJSF stock lost nearly 12% on the day, hitting a new 52-week low of $115.84. It is the stock’s 10th new 52-week low in the past 12 months, and trades 54 cents from a new 5-year low. 

While I don’t often write about small caps, especially one with a 30-day average volume of less than 150,000. 

However, I’ve followed this stock for years, and it tends to go through these occasional slumps in its business. Still, historically, it has always rebounded, utilizing a business model that combines organic growth with strategic acquisitions. 

If you’re a long-term investor and don’t mind owning small-cap stocks, J&J Snack Foods could fit the bill. Here’s why. 

The Results That Sunk JJSF Stock

The Zacks analyst estimate for Q2 2025 revenue was $366.7 million. The company delivered $356.1 million, $10.6 million shy of the consensus. On the bottom line, it earned $0.35 a share on an adjusted basis, a whopping 34 cents short of Wall Street’s estimate.

J&J CEO Dan Fachner said three things contributed to its poor quarter: 1) Its frozen beverages underperformed due to weakness in the theater channel, 2) its food service business faced tough comps due to a limited-time offer in Q2 2024 for churro volumes, and 3) its costs were higher due to higher chocolate prices for its bakery business. 

“Despite the challenges in the quarter, we expect earnings to improve in the second half, driven by a rebound in theater traffic, as well as actions we are taking to implement additional price increases and to grow volume,” Fachner said in its earnings release. 

“...Although we achieved price increases in the second quarter, the pace was slower than anticipated as we balanced price and volume considerations. We are implementing selective price increases in the third quarter.”

Investors are rightly focused on the big earnings miss. It will have to do better in the second half of its fiscal year, which ends in September. 

The CEO believes it will. 

3 Positives From the Second Quarter

When you get lemons, make lemonade.

While the gross margin declined 320 basis points during the quarter to 26.9%, its operating expenses were very controlled, falling 0.7%. Despite the lower operating expenses, it wasn’t enough to keep the operating margin in the mid-single digits--5.0% in Q2 2024--at 1.7%. 

The company generated positive free cash flow in the first six months of 2025 ($8.9 million) despite declining earnings in the second quarter. 

Lastly, the retail supermarket segment increased sales by 1.8% in the quarter, to $53.8 million, accounting for 15% of revenue. 

While there is no question that its food service sales (63% of revenue) have to be better, the softness in earnings in the quarter had everything to do with higher costs and less to do with a lack of sales. 

In the food service segment, J&J sold $6.5 million in the quarter to new customers and through the introduction of new churro products. Investors can expect Hola Churros to boost sales in subsequent quarters. 

It continues to carry no long-term debt with $48.5 million in cash ($2.49 a share). Lastly, its Altman Z-Score, which predicts the likelihood of bankruptcy proceedings in the next 24 months, is 6.80. Anything above 1.81 is acceptable.  

The Play to Make

Since 2016, JJSF stock has traded at these levels only twice--March 2020 and May 2025. On the first occasion, its stock hit a high of $181.71 in June 2021, a 72% return over 15 months (58% annualized). 

The same type of return is possible over the next 15 months. However, this stock is only for risk-tolerant investors given the tariff situation. 

You’ll probably want to use options to bet on JJSF. The options volume for J&J is only 11, so buying a call might take some time.

Looking at current open interest, your best bet is one of the Aug. 15 strikes. 

While the $145 strike has the lowest ask price, the $125 delta of 0.33730 means you can double your money by selling the call sometime before Aug. 15 if it appreciates $16.31 (14%) in the next 101 days. 

The $4.90 ask price is just 3.9% of yesterday’s closing price of $116.10. The risk/reward proposition is there for the taking.