[Press Release Overview](index=1&type=section&id=1.%20Press%20Release%20Overview) This section provides an overview of Middleby Corporation's Q2 2025 net earnings report, including company information and CEO commentary [Company Information](index=1&type=section&id=1.1%20Company%20Information) Middleby Corporation (NASDAQ: MIDD), a global leader in commercial foodservice, food processing, and residential kitchen equipment, released its second-quarter 2025 net earnings report - Middleby Corporation (NASDAQ: MIDD) is a global leader in commercial foodservice, food processing, and residential kitchen equipment[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) CEO Tim FitzGerald highlighted strong operational performance, new product launches, and customer collaboration despite economic uncertainties, emphasizing the company's fundamental transformation for long-term growth and significant share repurchases due to undervalued market perception - The CEO noted strong operational performance, new product launches, and customer collaboration despite economic uncertainties[3](index=3&type=chunk) - The company has undergone a fundamental business transformation to drive long-term growth, particularly in innovation and market expansion capabilities, positioning it for outsized growth post-market rebound[3](index=3&type=chunk) - The company repurchased **$323 million** in stock this quarter and expects to continue opportunistically deploying capital to enhance EPS, believing current market valuation does not reflect its significant growth opportunities[3](index=3&type=chunk) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=2.%20Second%20Quarter%202025%20Financial%20Highlights) This section summarizes Middleby's overall financial performance, segment-specific organic sales and adjusted EBITDA, and cash flow with capital allocation for Q2 2025 [Overall Performance Summary](index=1&type=section&id=2.1%20Overall%20Performance%20Summary) Middleby's Q2 2025 net sales decreased by 1.4% year-over-year, with organic net sales down 5.4%, while adjusted EBITDA fell to **$200.2 million**, including a **$10 million** tariff headwind, and operating income also declined Overall Performance Summary (in millions USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :----------- | | Net Sales | $977.86 | $991.55 | (1.4%) | | Operating Income | $155.39 | $175.71 | (11.6%) | | Adjusted EBITDA | $200.2 | $216.4 | (7.5%) | - Adjusted EBITDA for Q2 2025 includes a **$10 million** tariff headwind[4](index=4&type=chunk) [Segment Organic Sales and Adjusted EBITDA](index=1&type=section&id=2.2%20Segment%20Organic%20Sales%20and%20Adjusted%20EBITDA) In Q2 2025, all segments experienced a decline in organic net sales, with Residential Kitchen showing the largest decrease at **7.8%**, while Food Processing reported a **14.4%** net sales increase driven by acquisitions, though its organic sales also declined, and all segments saw a year-over-year decrease in adjusted EBITDA as a percentage of net sales Segment Performance (Q2 2025) | Segment | Reported Net Sales Growth (Q2 2025) | Organic Net Sales Growth (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2024) | | :---------------- | :--------------------------------- | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | | Commercial Foodservice | (4.8)% | (5.5)% | 27.0% | 28.1% | | Residential Kitchen | (6.1)% | (7.8)% | 10.3% | 9.1% | | Food Processing | 14.4% | (2.9)% | 21.2% | 24.2% | | Total Company | (1.4)% | (5.4)% | 20.5% | 21.8% | - Food Processing segment's reported net sales growth of **14.4%** was primarily driven by acquisitions (**15.4%**), while its organic net sales decreased by **2.9%**[4](index=4&type=chunk) [Cash Flow and Capital Allocation](index=1&type=section&id=2.3%20Cash%20Flow%20and%20Capital%20Allocation) Operating cash flow in Q2 2025 decreased to **$122 million** from **$149.5 million** in the prior year, with the company repurchasing **$322.7 million** in stock, resulting in a net leverage ratio of **2.3x**, and net debt increasing to **$1.9 billion** by quarter-end from **$1.7 billion** at FY2024 end Cash Flow and Capital Allocation (in millions USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :----------- | | Operating Cash Flow | $122.0 | $149.5 | (18.4%) | | Stock Repurchases (Q2) | $322.7 | N/A | N/A | - Net leverage ratio was **2.3x** as of the end of Q2 2025[5](index=5&type=chunk)[11](index=11&type=chunk) - Net debt increased to **$1.9 billion** as of the end of Q2 2025, up from **$1.7 billion** at the end of fiscal year 2024[11](index=11&type=chunk) [2025 Outlook](index=2&type=section&id=3.%202025%20Outlook) This section provides Middleby's financial guidance for the third quarter and full year of 2025 [Third Quarter 2025 Guidance](index=2&type=section&id=3.1%20Third%20Quarter%202025%20Guidance) Middleby projects Q3 2025 total revenue between **$950 million** and **$975 million**, adjusted EBITDA between **$185 million** and **$195 million**, and adjusted EPS between **$2.04** and **$2.19** Q3 2025 Guidance (in millions USD, except EPS) | Metric | Q3 2025 Guidance | | :----- | :--------------- | | Total Revenue | $950-975 million | | Commercial Foodservice Revenue | $580-590 million | | Residential Kitchen Revenue | $170-180 million | | Food Processing Revenue | $195-205 million | | Adjusted EBITDA | $185-195 million | | Adjusted EPS | $2.04-2.19 | [Full Year 2025 Guidance](index=2&type=section&id=3.2%20Full%20Year%202025%20Guidance) The company forecasts full-year 2025 total revenue between **$3.81 billion** and **$3.87 billion**, adjusted EBITDA between **$770 million** and **$800 million**, and adjusted EPS between **$8.65** and **$9.05** Full Year 2025 Guidance (in billions/millions USD, except EPS) | Metric | Full Year 2025 Guidance | | :----- | :--------------- | | Total Revenue | $3.81-3.87 billion | | Adjusted EBITDA | $770-800 million | | Adjusted EPS | $8.65-9.05 | [Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=4.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated statements of earnings, balance sheets, and cash flows for Middleby Corporation [Statements of Earnings](index=4&type=section&id=4.1%20Statements%20of%20Earnings) Net sales for Q2 2025 were **$977.86 million**, down from **$991.55 million** in Q2 2024, with net earnings decreasing to **$105.96 million** (**$1.99** diluted EPS) from **$115.40 million** (**$2.13** diluted EPS) in the prior year Statements of Earnings (in thousands USD, except EPS) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $977,859 | $991,546 | $1,884,486 | $1,918,472 | | Gross Profit | $371,291 | $379,642 | $717,224 | $726,000 | | Operating Income | $155,392 | $175,708 | $295,990 | $312,841 | | Net Earnings | $105,956 | $115,395 | $198,308 | $201,963 | | Diluted EPS | $1.99 | $2.13 | $3.68 | $3.72 | [Balance Sheets](index=5&type=section&id=4.2%20Balance%20Sheets) Total assets as of June 28, 2025, were **$7.34 billion**, a slight increase from **$7.28 billion** at December 28, 2024, with cash and cash equivalents decreasing while receivables and inventory rose, and total liabilities also increased, though long-term debt remained relatively stable Balance Sheets (in thousands USD) | Metric | June 28, 2025 | December 28, 2024 | | :----- | :----------- | :----------- | | Total Assets | $7,335,883 | $7,283,151 | | Cash and Cash Equivalents | $511,499 | $689,533 | | Accounts Receivable, Net | $665,833 | $643,355 | | Inventories, Net | $888,670 | $841,567 | | Total Current Assets | $2,259,590 | $2,330,043 | | Total Current Liabilities | $880,782 | $829,322 | | Long-Term Debt | $2,331,772 | $2,351,118 | | Total Stockholders' Equity | $3,622,555 | $3,638,431 | [Statements of Cash Flows](index=9&type=section&id=4.3%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities in Q2 2025 was **$122 million**, down from **$149.5 million** in Q2 2024, with **$24.4 million** used in investing activities and **$346.4 million** in financing activities, primarily for stock repurchases, resulting in **$101.1 million** in free cash flow for the quarter Statements of Cash Flows (in thousands USD) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Operating Activities | $122,003 | $149,516 | $263,137 | $290,417 | | Investing Activities | $(24,419) | $(14,228) | $(59,256) | $(30,317) | | Financing Activities | $(346,368) | $(14,117) | $(403,459) | $(42,675) | | Free Cash Flow | $101,084 | $138,579 | $208,486 | $265,737 | [Non-GAAP Financial Measures and Reconciliations](index=6&type=section&id=5.%20Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details Middleby's non-GAAP financial metrics, including segment information and reconciliations to GAAP measures, along with an explanation of their use [Non-GAAP Segment Information](index=6&type=section&id=5.1%20Non-GAAP%20Segment%20Information) This section presents non-GAAP financial data by segment, including net sales, operating income, and adjusted EBITDA for the three and six months ended June 28, 2025, compared to prior periods, also noting the reclassification of the Food Processing segment - To align with current year presentation, certain prior year amounts have been reclassified, including the performance of a segment previously reported within Commercial Foodservice now being reported within Food Processing[19](index=19&type=chunk)[21](index=21&type=chunk) [Three Months Ended June 28, 2025](index=6&type=section&id=5.1.1%20Three%20Months%20Ended%20June%2028%2C%202025) In Q2 2025, the Commercial Foodservice segment had the highest net sales and adjusted EBITDA, though its adjusted EBITDA as a percentage of net sales slightly decreased year-over-year, while Residential Kitchen saw an increase in this percentage despite lower net sales, and Food Processing experienced a decline Segment Performance (Q2 2025, in thousands USD) | Segment | Net Sales (Q2 2025) | Segment Operating Income (Q2 2025) | Adjusted EBITDA (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2025) | | :---------------- | :------------------ | :------------------------------- | :------------------------ | :--------------------------------------- | | Commercial Foodservice | $580,605 | $137,902 | $156,548 | 27.0% | | Residential Kitchen | $181,059 | $9,327 | $18,603 | 10.3% | | Food Processing | $216,195 | $42,677 | $45,846 | 21.2% | | Total Company | $977,859 | $155,392 | $200,193 | 20.5% | [Six Months Ended June 28, 2025](index=7&type=section&id=5.1.2%20Six%20Months%20Ended%20June%2028%2C%202025) For the first six months of 2025, Commercial Foodservice remained the largest segment in terms of net sales and adjusted EBITDA, with all segments experiencing a slight year-over-year decrease in adjusted EBITDA as a percentage of net sales Segment Performance (H1 2025, in thousands USD) | Segment | Net Sales (H1 2025) | Segment Operating Income (H1 2025) | Adjusted EBITDA (H1 2025) | Adjusted EBITDA as % of Net Sales (H1 2025) | | :---------------- | :------------------- | :-------------------------------- | :------------------------- | :--------------------------------------- | | Commercial Foodservice | $1,143,322 | $269,976 | $307,955 | 26.9% | | Residential Kitchen | $357,063 | $21,134 | $39,219 | 11.0% | | Food Processing | $384,101 | $66,189 | $75,912 | 19.8% | | Total Company | $1,884,486 | $295,990 | $382,273 | 20.3% | [Reconciliation of Net Earnings to Adjusted Net Earnings](index=8&type=section&id=5.2%20Reconciliation%20of%20Net%20Earnings%20to%20Adjusted%20Net%20Earnings) This section reconciles GAAP net earnings and diluted EPS to adjusted net earnings and adjusted diluted EPS by excluding non-recurring or non-core items such as amortization, restructuring charges, acquisition-related adjustments, and strategic transaction costs [Three Months Ended June 28, 2025](index=8&type=section&id=5.2.1%20Three%20Months%20Ended%20June%2028%2C%202025) In Q2 2025, adjusted net earnings were **$123.91 million** and adjusted diluted EPS was **$2.35**, compared to GAAP net earnings of **$105.96 million** and diluted EPS of **$1.99**, with key adjustments including amortization, restructuring charges, and strategic transaction costs Net Earnings Reconciliation (Q2, in thousands USD, except EPS) | Metric | Q2 2025 (GAAP) | Q2 2025 (Adjusted) | Q2 2024 (GAAP) | Q2 2024 (Adjusted) | | :----- | :------------- | :----------------- | :------------- | :----------------- | | Net Earnings | $105,956 | $123,906 | $115,395 | $128,479 | | Diluted EPS | $1.99 | $2.35 | $2.13 | $2.39 | | Amortization Adjustment | $17,192 | | $18,066 | | | Restructuring Charges Adjustment | $2,288 | | $5,350 | | | Strategic Transaction Costs Adjustment | $6,788 | | — | | [Six Months Ended June 28, 2025](index=8&type=section&id=5.2.2%20Six%20Months%20Ended%20June%2028%2C%202025) For the first six months of 2025, adjusted net earnings were **$235.09 million** and adjusted diluted EPS was **$4.43**, compared to GAAP net earnings of **$198.31 million** and diluted EPS of **$3.68** Net Earnings Reconciliation (H1, in thousands USD, except EPS) | Metric | H1 2025 (GAAP) | H1 2025 (Adjusted) | H1 2024 (GAAP) | H1 2024 (Adjusted) | | :----- | :-------------- | :------------------ | :-------------- | :------------------ | | Net Earnings | $198,308 | $235,086 | $201,963 | $229,829 | | Diluted EPS | $3.68 | $4.43 | $3.72 | $4.28 | | Amortization Adjustment | $34,981 | | $37,202 | | | Restructuring Charges Adjustment | $5,017 | | $8,527 | | | Strategic Transaction Costs Adjustment | $10,261 | | — | | [Use of Non-GAAP Financial Measures Explanation](index=9&type=section&id=5.3%20Use%20of%20Non-GAAP%20Financial%20Measures%20Explanation) The company utilizes non-GAAP financial measures such as organic net sales growth, adjusted EBITDA, net debt, adjusted net earnings, and free cash flow to provide deeper insights, enhance transparency, and aid management decision-making, as these metrics help assess core operating performance and facilitate period-over-period comparisons by excluding items not reflective of core operations - Non-GAAP measures (organic net sales growth, adjusted EBITDA, net debt, adjusted net earnings, and adjusted diluted EPS) are intended to provide deeper insights, enhance transparency, and assist management in financial and operational decision-making[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) - Free cash flow is considered an important measure of operating performance as it provides cash generated from operating activities available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt, and repurchasing common stock[27](index=27&type=chunk) [Additional Information](index=2&type=section&id=6.%20Additional%20Information) This section provides details on Middleby's upcoming conference call, forward-looking statements, and company profile with contact information [Conference Call](index=2&type=section&id=6.1%20Conference%20Call) Middleby has scheduled a conference call for August 6 at 11 AM ET/10 AM CT to discuss Q2 results, accessible via the company's investor relations website or by phone - The company has scheduled a conference call for August 6 at 11 AM ET/10 AM CT to discuss Q2 results, accessible via www.middleby.com or by calling (844) 676-5090[9](index=9&type=chunk) [Forward-Looking Statements](index=2&type=section&id=6.2%20Forward-Looking%20Statements) The press release contains forward-looking statements subject to various risks and uncertainties, including financing costs, operating performance fluctuations, reliance on key customers, international risks, market conditions, and raw material costs, with no obligation to update these statements unless legally required - Statements in the press release that are not historical facts are forward-looking statements, subject to various significant factors including financing costs, quarterly fluctuations in operating results, reliance on key customers, international risks, foreign exchange and political risks, changes in market conditions, competitive product and pricing impacts, timely product development and market acceptance, and raw material availability and costs[10](index=10&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[10](index=10&type=chunk) [Company Profile and Contact](index=3&type=section&id=6.3%20Company%20Profile%20and%20Contact) Middleby Corporation is a global leader in the foodservice industry, providing solutions for commercial foodservice, food processing, and residential kitchens, known for innovation and philanthropic partnerships, with investor relations contact information provided - Middleby Corporation is a global leader in the foodservice industry, developing and manufacturing a wide range of solutions for commercial foodservice, food processing, and residential kitchens, and prides itself on its state-of-the-art innovation and philanthropic partnerships[12](index=12&type=chunk) - Contact information for John Joyner, Vice President of Investor Relations, is jjoyner@middleby.com[13](index=13&type=chunk)

Core Insights - Insider buying activity has surged at three major companies, with executives investing over $170 million, indicating strong confidence in their future performance [1] Group 1: Builders FirstSource (BLDR) - Multiple directors, including Chairman Paul S. Levy, have purchased shares, with Levy investing approximately $55.4 million on May 8 [1][2] - Following Levy's purchase, BLDR shares increased by around 20%, outperforming the S&P 500's 11% gain during the same period [3] Group 2: UnitedHealth Group (UNH) - Stephen J. Hemsley, the new CEO and Chairman, bought approximately $25 million worth of shares on May 16, signaling confidence in the company's future [5][6] - Under Hemsley's previous leadership from 2006 to 2017, UNH shares provided a total return of 360%, significantly outperforming the S&P 500 [8] Group 3: Middleby (MIDD) - Director Edward P. Garden purchased over $93 million in Middleby stock from May 9 to May 21, increasing his stake from approximately 5% to 6% [10][11] - Garden aims to focus the company on its commercial foodservice segment, and the company announced plans to spin off its food processing business [12]

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Group 1 - The Middleby Corporation (NASDAQ: MIDD) was identified as an attractive investment opportunity due to its continued growth and low share price [1] - The company has been highlighted for its potential value and growth prospects in the market [1] Group 2 - Crude Value Insights provides an investing service focused on oil and natural gas, emphasizing cash flow and companies that generate it [1] - Subscribers have access to a stock model account, in-depth cash flow analyses of exploration and production firms, and live discussions about the sector [2]

Core Insights - The Middleby Corporation reported first-quarter 2025 adjusted earnings of $2.08 per share, exceeding the Zacks Consensus Estimate of $1.94, marking a year-over-year increase of 10.1% due to lower costs [1] - Net revenues for the quarter were $906.6 million, falling short of the consensus estimate of $941 million, representing a year-over-year decrease of 2.2% [2] Financial Performance - The Commercial Foodservice Equipment Group segment, accounting for 62.1% of net sales, generated $562.7 million, down 3.2% year over year, with organic sales decreasing by 2.8% [2] - The Residential Kitchen Equipment Group segment, representing 19.4% of total sales, reported $176 million, an increase of 1.2% year over year, with organic sales up by 2% [3] - The Food Processing Equipment Group segment, making up 18.5% of sales, totaled $167.9 million, down 2.2% year over year, with organic sales decreasing by 12.9% [4] Margin and Cost Analysis - Cost of sales decreased by 3.4% year over year to $560.7 million, while gross profit slightly declined by 0.1% to $345.9 million, resulting in a gross margin of 38.2%, an increase of 80 basis points from the previous year [5] - Selling, general and administrative expenses fell by 1.7% year over year to $202.6 million, leading to a 2.5% increase in operating income to $140.6 million, with an operating margin increase of 70 basis points to 15.5% [5] Cash Flow and Balance Sheet - As of the end of the first quarter, Middleby had cash and cash equivalents of $745.1 million, up from $689.5 million at the end of December 2024, with long-term debt slightly decreasing to $2.34 billion [7] - The company generated net cash of $141.1 million from operating activities in the first three months of 2025, compared to $140.9 million in the same period last year [7] - Capital expenditure for the quarter was $33.7 million, significantly higher than $13.7 million in the year-ago period, while free cash flow decreased to $107.4 million from $127.2 million [8] Strategic Developments - Middleby is on track to spin off its food processing business into a standalone public company, expected to be completed by early 2026, aiming to create two independent companies focused on different market segments [9][10]

Financial Data and Key Metrics Changes - The company authorized an additional $7.5 billion in shares for its accelerated buyback program, representing 21% of outstanding equity [3][4] - Operating cash flows reached over $141 million, the highest for the first quarter, with free cash flows totaling $107 million for the quarter and $620 million for the trailing twelve months [12] - The company has successfully reduced its leverage from three times to two times over the past two years, maintaining a strong balance sheet [12] Business Line Data and Key Metrics Changes - The residential segment saw growth primarily due to outdoor products, with margins holding well [16] - The commercial foodservice business experienced success from investments in the ice and beverage platform, although muted buying levels from major chain customers offset some gains [14] - Food processing revenues dropped due to customer-driven delivery delays, but the company anticipates higher sequential revenue in Q2 [15][19] Market Data and Key Metrics Changes - The company is facing tariff-related costs estimated to increase annual expenses by approximately $150 million to $200 million, with a significant portion attributed to foreign-sourced componentry from China [6][18] - The company expects to offset tariff impacts by the end of the year through operational actions and pricing adjustments [7][18] Company Strategy and Development Direction - The company plans to separate its food processing business into a standalone public company by early 2026, aiming to unlock shareholder value and enhance strategic focus [4][5] - The company is focusing on market expansion opportunities in adjacent markets such as poultry, pet foods, and snacks [5][22] - Strategic investments have been made to drive sustainable long-term growth, particularly in automation, digital technologies, and IoT connectivity [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenging market conditions affecting major chain customers but remains optimistic about sequential revenue increases throughout the year [17][20] - The company is confident in its ability to navigate tariff challenges and believes it is well-positioned to capitalize on market opportunities [7][45] - The long-term outlook for the food processing segment remains bullish, with a robust pipeline of opportunities [21][24] Other Important Information - The company plans to hold a dedicated Shareholder Day in Q4 to present further details on the strategic roadmap for the food processing business [6] - The company has received multiple industry awards for its innovative products, highlighting its commitment to innovation [10][99] Q&A Session Summary Question: 2025 sales guidance and segment outlook - Management indicated that the full-year outlook is primarily driven by the commercial segment, with expectations for improvement over the year despite current challenges [30][32] Question: Buyback decision rationale - The buyback decision was influenced by the company's strong cash flow, balance sheet position, and belief that the current share price does not reflect the business's strength [39][41] Question: Tariff impact and share gains - Management expressed confidence in offsetting tariff costs through operational initiatives and highlighted opportunities for share gains due to a strong U.S. manufacturing footprint [44][46] Question: Segment-level tariff cost allocation - The estimated tariff impact is weighted more towards commercial (approximately 70%), followed by residential (20%), and food processing (10%) [53] Question: Revenue outlook and new store openings - Management expects sequential improvement in revenue for Q2 and noted that new store openings are anticipated to be higher in the second half of the year [62] Question: Competitive pricing landscape - The company has observed competitors implementing price increases ranging from 10% to 25%, while it plans a mid-single-digit increase [83]

Financial Data and Key Metrics Changes - The company authorized an additional $7.5 billion in shares for its accelerated buyback program, representing 21% of outstanding equity, reflecting confidence in the business [2][3] - Operating cash flows reached over $141 million, the highest for the first quarter, with free cash flows totaling $107 million for the quarter and $620 million for the trailing twelve months [9][10] - The company has successfully reduced its leverage from three times to two times over the past two years, maintaining a strong balance sheet [9][10] Business Line Data and Key Metrics Changes - The residential segment saw growth primarily due to outdoor products, with margins holding steady [12][19] - The commercial foodservice business experienced success from investments in the ice and beverage platform, although muted buying levels from major chain customers offset some gains [11][12] - Food processing revenues dropped due to customer-driven delivery delays, but the company anticipates higher sequential revenue in Q2 [12][16] Market Data and Key Metrics Changes - The company is actively working to mitigate tariff-related costs, which are expected to increase annual expenses by approximately $150 million to $200 million [5][12] - The impact of tariffs is weighted more towards the commercial and residential segments, with an estimated 70% impact on commercial, 20% on residential, and 10% on food processing [49][50] Company Strategy and Development Direction - The company plans to separate its food processing business into a standalone public company by early 2026, aiming to unlock shareholder value and enhance operational focus [3][4] - Strategic investments have been made to drive sustainable long-term growth, focusing on automation, digital technologies, and expanding into adjacent markets like poultry and snacks [6][19] - The company is committed to using the majority of its free cash flow for share repurchases while maintaining strategic growth investments [2][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market dynamics and expects to emerge stronger despite challenges posed by tariffs and muted customer spending [5][13] - The long-term outlook for the food processing segment remains bullish, with a robust pipeline and expectations for sequential revenue increases [18][20] - Management acknowledged the uncertainty in the operating environment but remains optimistic about the company's positioning and growth potential over the next few years [22][21] Other Important Information - The company plans to hold a dedicated Shareholder Day in Q4 to present further details on the strategic roadmap for the food processing business [4] - Recent industry awards for new products highlight the company's commitment to innovation and market leadership [7][96] Q&A Session Summary Question: What is the 2025 sales guidance and where are the biggest changes? - The full-year outlook is primarily driven by the commercial segment, with changes due to macroeconomic factors and trade environment uncertainties affecting investment decisions across segments [25][26] Question: What informed the buyback decision? - The decision was influenced by the company's strong valuation, cash flow growth, and the belief that the share price does not reflect the business's strength [31][32] Question: How are tariffs impacting the business and what are the strategies to mitigate them? - Tariffs are expected to have a significant impact, particularly on commercial and residential segments, but the company is confident in offsetting these costs through pricing actions and operational initiatives [38][50] Question: What is the revenue outlook for the second half of 2025? - The company expects sequential improvement in revenue, with new store openings from major customers contributing positively, although some delays may occur [59][60] Question: Can you provide an update on new product rollouts and innovations? - The company is seeing good momentum with the Open Kitchen initiative and has several exciting new products in the pipeline, including advancements in beverage dispensing and cooking technologies [88][92]

Core Insights - Middleby (MIDD) reported revenue of $906.63 million for Q1 2025, a year-over-year decline of 2.2%, with an EPS of $2.08 compared to $1.89 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $941.15 million, resulting in a surprise of -3.67%, while the EPS exceeded the consensus estimate of $1.94 by +7.22% [1] Revenue Breakdown - Commercial Foodservice revenue was $562.72 million, below the average estimate of $579.76 million, reflecting a year-over-year decline of -4.7% [4] - Residential Kitchen revenue reached $176 million, slightly below the average estimate of $182.68 million, showing a year-over-year increase of +1.2% [4] - Food Processing revenue was reported at $167.91 million, compared to the estimated $178.72 million, marking a year-over-year increase of +3.2% [4] Segment Operating Income - Commercial Foodservice segment operating income was $132.07 million, exceeding the average estimate of $128.21 million [4] - Residential Kitchen segment operating income was $11.81 million, surpassing the average estimate of $9.20 million [4] - Food Processing segment operating income was $23.51 million, significantly lower than the estimated $34.98 million [4] Stock Performance - Over the past month, Middleby shares have returned +8.2%, compared to the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Middleby (MIDD) reported quarterly earnings of $2.08 per share, exceeding the Zacks Consensus Estimate of $1.94 per share, and showing an increase from $1.89 per share a year ago, representing an earnings surprise of 7.22% [1] - The company posted revenues of $906.63 million for the quarter ended March 2025, which was 3.67% below the Zacks Consensus Estimate and a decrease from $926.93 million year-over-year [2] - Over the last four quarters, Middleby has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock has lost about 0.1% since the beginning of the year, while the S&P 500 has declined by 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $2.44 on revenues of $1.01 billion, and for the current fiscal year, it is $9.69 on revenues of $3.99 billion [7] - The Zacks Industry Rank for Manufacturing - General Industrial is currently in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Middleby's Q1 2025 net sales decreased by 2.2% to $906.6 million, compared to $926.9 million in Q1 2024[8] - Adjusted EBITDA for Q1 2025 was $182.1 million, a decrease of 2.0% compared to $185.8 million in Q1 2024[8] - Operating cash flow remained relatively stable at $141.1 million in Q1 2025, compared to $140.9 million in Q1 2024[8] - Middleby repurchased $29 million of common stock in Q1 2025 and an additional $21 million to date in Q2 2025[25] Segment Performance - Commercial Foodservice net sales decreased by 3.2% to $562.7 million in Q1 2025[13] - Residential Kitchen net sales increased by 1.2% to $176.0 million in Q1 2025[16] - Food Processing net sales decreased by 2.2% to $167.9 million in Q1 2025[19] Strategic Initiatives - Middleby plans to allocate the vast majority of free cash flow to share repurchases, aiming to reduce outstanding shares by 6–8% annually[2] - The company is targeting a leverage ratio of 2.0–2.5x[2] - Middleby is progressing with the Food Processing spin-off, targeted for completion by early 2026[4] - Preliminary tariff cost effect is projected to be $150–200 million annually, with China representing roughly 50% of the identified cost exposure[3] Regional Performance - In Commercial Foodservice, U S and Canada revenue was $413.9 million, a decrease of 2.8%[14] - In Residential Kitchen, U S and Canada revenue was $112.9 million, an increase of 5.5%[17] - In Food Processing, U S and Canada revenue was $93.2 million, a decrease of 10.2%[20]