Middleby's Q1 Earnings Surpass Estimates While Revenues Miss

The Middleby Corporation MIDD reported first-quarter 2025 adjusted earnings of $2.08 per share, which beat the Zacks Consensus Estimate of $1.94. The bottom line increased 10.1% year over year due to lower costs.

Net revenues of $906.6 million missed the consensus estimate of $941 million. The top line decreased 2.2% year over year. Organic sales decreased 3.8%. Acquired assets increased sales by 2.4%, while movements in foreign currencies had a negative impact of 0.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

MIDD’s Segmental Results

Sales from the Commercial Foodservice Equipment Group segment (representing 62.1% of net sales) were $562.7 million, down 3.2% year over year. Our estimate was $594.8 million. Organic sales decreased 2.8%. Buyouts had a positive impact of 0.4% on sales, while foreign-currency translation had an adverse impact of 0.8%.

Sales from the Residential Kitchen Equipment Group segment (19.4%) totaled $176 million, up 1.2% year over year. Our estimate was $172.7 million. Organic sales increased 2%. Foreign-currency translation had an adverse impact of 0.8%.

Sales from the Food Processing Equipment Group segment (18.5%) summed $167.9 million, down 2.2% year over year. We expected the metric to be $171.2 million. Organic sales decreased 12.9% year over year. Acquisitions boosted sales by 11.8%, while foreign currency movements had an unfavorable impact of 1%.

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 3.4% year over year to $560.7 million. Gross profit inched down 0.1% to $345.9 million. The gross margin was 38.2%, up 80 basis points (bps) from the year-ago quarter.

Selling, general and administrative expenses decreased 1.7% year over year to $202.6 million. Operating income increased 2.5% year over year to $140.6 million. Operating margin increased 70 bps to 15.5%.

Adjusted EBITDA decreased 2% year over year to $182.1 million. Adjusted EBITDA margin increased 10 bps to 20.1%.

MIDD’s Balance Sheet and Cash Flow

Exiting the first quarter, Middleby had cash and cash equivalents of $745.1 million compared with $689.5 million at the end of December 2024. Long-term debt was $2.34 billion at the end of the first quarter compared with $2.35 billion at 2024-end.

In the first three months of 2025, Middleby generated net cash of $141.1 million from operating activities compared with $140.9 million in the year-ago period.

Capital expenditure totaled $33.7 million compared with $13.7 million in the year-ago period. Free cash flow was $107.4 million compared with $127.2 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 early 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.

MIDD’s Zacks Rank & Stocks to Consider

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

Enerpac Tool Group EPAC currently carries a Zacks Rank #2 (Buy). In the past 60 days, the Zacks Consensus Estimate for Enerpac Tool’s 2025 earnings has been stable.

Unifirst Corporation UNF currently carries a Zacks Rank of 2. UNF delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the consensus estimate for Unifirst’s fiscal 2025 (ending August 2025) earnings has increased 4.1%.

AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup’s 2025 earnings has increased 2.5%.

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

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