Middleby's Q2 Earnings and Sales Beat Estimates, Decline Y/Y

The Middleby Corporation MIDD reported second-quarter 2025 adjusted earnings of $2.35 per share, which beat the Zacks Consensus Estimate of $2.20. The bottom line decreased 1.7% year over year due to lower sales.

Net sales of $977.9 million beat the consensus estimate of $975 million. The top line decreased 1.4% year over year. Organic sales decreased 5.4%. Acquired assets increased sales by 3.2%, while movements in foreign currencies had a positive impact of 0.9%.

MIDD’s Segmental Results

Sales from the Commercial Foodservice Equipment Group segment (representing 59.4% of net sales) were $580.6 million, down 4.8% year over year. Our estimate was $593 million. Organic sales decreased 5.5%. Buyouts had a positive impact of 0.4% on sales, while foreign-currency translation had a positive impact of 0.3%.

Sales from the Residential Kitchen Equipment Group segment (18.5%) totaled $181.1 million, down 6.1% year over year. Our estimate was $185 million. Organic sales decreased 7.8%. Foreign-currency translation had a favorable impact of 1.7%.

Sales from the Food Processing Equipment Group segment (22.1%) totaled $216.2 million, up 14.4% year over year. We expected the metric to be $198 million. Organic sales decreased 2.9% year over year. Acquisitions boosted sales by 15.4%, while foreign currency movements had a favorable impact of 1.9%.

The Middleby Corporation Price, Consensus and EPS Surprise

The Middleby Corporation price-consensus-eps-surprise-chart | The Middleby Corporation Quote

Middleby’s Margin Profile

Middleby’s cost of sales decreased 0.9% year over year to $606.6 million. Gross profit inched down 2.2% to $371.3 million. The gross margin was 38%, down 30 basis points (bps) from the year-ago quarter.

Selling, general and administrative expenses increased 7.5% year over year to $213.6 million. Operating income decreased 11.6% year over year to $155.4 million. Operating margin decreased 180 bps to 15.9%.

Adjusted EBITDA decreased 7.5% year over year to $200.2 million. Adjusted EBITDA margin decreased 130 bps to 20.5%.

MIDD’s Balance Sheet and Cash Flow

Exiting the second quarter, Middleby had cash and cash equivalents of $511.5 million compared with $689.5 million at the end of December 2024. Long-term debt was $2.33 billion at the end of the second quarter compared with $2.35 billion at 2024-end.

In the first six months of 2025, Middleby generated net cash of $263.1 million from operating activities compared with $290.4 million in the year-ago period.

In the first six months, its capital expenditure totaled $54.7 million compared with $24.7 million in the year-ago period. Free cash flow was $208.5 million compared with $265.7 million in the year-ago period.

Spin-Off of Middleby’s Food-Processing Business

Middleby remains on track to separate its food processing business into a standalone public company, Middleby Food Processing. The tax-free spin-off is expected to be completed by the first half of 2026.

This move aims to create two independent companies, namely, The Middleby Corporation (Middleby RemainCo), which will be focused on commercial foodservice and residential kitchens, and Middleby Food Processing, targeting industrial food markets. The move is expected to unlock value by enabling heightened strategic focus, capital optimization and M&A opportunities for both entities.

Middleby’s Q3 Outlook

For the third quarter, the company expects total sales to be in the range of $950-$975 million. It expects sales from the Commercial Foodservice segment to be in the band of $580-$590 million, while the same from the Residential Kitchen segment are anticipated to be $170-$180 million. Sales from the Food Processing are projected to be about $195-$205 million.

While adjusted EBITDA is projected to be $185-$195 million, adjusted earnings are anticipated to be in the band of $2.04-$2.19 per share.

2025 Outlook

For 2025, Middleby expects total sales to be in the range of $3.81-$3.87 billion. While adjusted EBITDA is forecasted to be $770-$800 million, adjusted earnings are likely to be $8.65-$9.05 per share.

Zacks Rank & Key Picks

MIDD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks are discussed below:

Federal Signal Corporation FSS currently sports a Zacks Rank of 1. FSS has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 5.7%.  In the past 60 days, the Zacks Consensus Estimate for Federal Signal’s 2025 earnings has increased 4.2%.

ITT Inc. ITT currently carries a Zacks Rank #2 (Buy). ITT has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 1.5%.  In the past 60 days, the Zacks Consensus Estimate for ITT’s 2025 earnings has increased 1.7%.

RBC Bearings Incorporated RBC currently carries a Zacks Rank of 2. RBC outperformed the consensus estimate thrice in the preceding four quarters and missed once, with an average surprise of 3.8%. In the past 60 days, the Zacks Consensus Estimate for RBC Bearings’ 2025 earnings has increased 1.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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