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Middleby's Q2 Earnings and Sales Beat Estimates, Decline Y/Y
ZACKS· 2025-08-07 14:16
Core Insights - The Middleby Corporation (MIDD) reported adjusted earnings of $2.35 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $2.20, although the earnings decreased by 1.7% year over year due to lower sales [1] - Net sales reached $977.9 million, surpassing the consensus estimate of $975 million, but showed a decline of 1.4% year over year, with organic sales down by 5.4% [1][10] - The company is on track to spin off its food processing business into a standalone public company by the first half of 2026, aiming to enhance strategic focus and capital optimization for both entities [11][12] Financial Performance - The Commercial Foodservice Equipment Group segment, accounting for 59.4% of net sales, reported sales of $580.6 million, down 4.8% year over year, with organic sales decreasing by 5.5% [2] - The Residential Kitchen Equipment Group segment, representing 18.5% of total sales, saw a decline to $181.1 million, down 6.1% year over year, with organic sales down by 7.8% [3] - The Food Processing Equipment Group segment, which makes up 22.1% of total sales, experienced a 14.4% increase in sales to $216.2 million, driven by acquisitions, despite a 2.9% decline in organic sales [4] Margin and Cost Analysis - Cost of sales decreased by 0.9% year over year to $606.6 million, while gross profit fell by 2.2% to $371.3 million, resulting in a gross margin of 38%, down 30 basis points from the previous year [5] - Selling, general and administrative expenses rose by 7.5% year over year to $213.6 million, leading to an operating income decrease of 11.6% to $155.4 million and an operating margin decline of 180 basis points to 15.9% [5] Cash Flow and Capital Expenditure - As of the end of Q2 2025, Middleby had cash and cash equivalents of $511.5 million, down from $689.5 million at the end of December 2024, with long-term debt slightly reduced to $2.33 billion [7] - In the first half of 2025, net cash generated from operating activities was $263.1 million, compared to $290.4 million in the same period last year, while capital expenditure increased to $54.7 million from $24.7 million [8] Future Guidance - For Q3 2025, Middleby expects total sales to be between $950 million and $975 million, with segment-specific projections for Commercial Foodservice, Residential Kitchen, and Food Processing [13] - The company anticipates adjusted EBITDA in the range of $185 million to $195 million and adjusted earnings per share between $2.04 and $2.19 [14] - For the full year 2025, total sales are projected to be between $3.81 billion and $3.87 billion, with adjusted EBITDA forecasted at $770 million to $800 million and adjusted earnings per share expected to be between $8.65 and $9.05 [15]
Middleby's Q1 Earnings Surpass Estimates While Revenues Miss
ZACKS· 2025-05-08 16:40
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]
Middleby(MIDD) - 2025 Q1 - Earnings Call Presentation
2025-05-07 11:16
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]