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Why Is Middleby (MIDD) Down 2.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for The Middleby Corporation (MIDD - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings: The company’s quarterly adjusted earnings of $1.41 per share surpassed the Zacks Consensus Estimate of $1.27. In addition, the bottom line considerably improved from the prior-year tally by 60.2%. The impressive year-over-year growth was primarily backed by higher sales and productive integration initiatives undertaken by the company.
For full-year 2016, adjusted earnings came in at $4.98 per share as against $3.36 per share reported in full-year 2015.
Revenues: Net sales for the quarter came in at $596.8 million, up 11.6% year over year. The upside was driven by higher sales accrued from Middleby’s acquired businesses. The top line also surpassed the Zacks Consensus Estimate of $574 million.
For full-year 2016, net sales came in at $2,267.9 million, up 24.2% year over year.
Segmental Details: Middleby reports its net sales under three heads/segments. The segmental quarterly results are briefly discussed below:
Revenues from the Commercial Foodservice Equipment Group increased 20.2% on a year-over-year basis. Revenues from the Food Processing Equipment Group jumped 19.7% year over year in the quarter. However, revenues from the Residential Kitchen Equipment Group declined 5.9% year over year.
Margins: In the reported quarter, Middleby’s cost of sales climbed 6.5% year over year to $357.6 million. Gross margin expanded 290 basis points (bps) year over year to 40.1%, on the back of the benefits generated from the company’s integration initiatives.
Selling and distribution expenses came in at $55.6 million, down 1.5% year over year. Operating income surged 74.2% year over year to $126.5 million.
For full-year 2016, gross margin came in at 39.7% as against 38.7% recorded in the year-ago period. Operating income totaled $446.2 million, up 47.5% year over year.
Balance Sheet: Middleby exited the fourth quarter with cash and cash equivalents of $68.5 million as against $55.5 million recorded at the end of 2015. Long-term debt was $726.2 million compared with $734 million reported at the end of 2015.
Outlook: Middleby believes that higher demand of restaurant chain customers would likely boost sales of Commercial Foodservice Equipment Group segment in the quarters ahead. Fresh product launches of the Viking range and superior customer services are expected to reinforce revenue of the company’s Residential Kitchen Equipment Group. Also, higher demand for novel equipment solutions is estimated to drive revenue of Middleby’s Food Processing Equipment Group in the near term.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in estimate revisions. There has been one revision lower for the current quarter.
At this time, Middleby's stock has a nice score of 'B' on both growth and momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable for growth and momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months.
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Why Is Middleby (MIDD) Down 2.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for The Middleby Corporation (MIDD - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Middleby reported better-than-expected fourth-quarter 2016 results.
Earnings: The company’s quarterly adjusted earnings of $1.41 per share surpassed the Zacks Consensus Estimate of $1.27. In addition, the bottom line considerably improved from the prior-year tally by 60.2%. The impressive year-over-year growth was primarily backed by higher sales and productive integration initiatives undertaken by the company.
For full-year 2016, adjusted earnings came in at $4.98 per share as against $3.36 per share reported in full-year 2015.
Revenues: Net sales for the quarter came in at $596.8 million, up 11.6% year over year. The upside was driven by higher sales accrued from Middleby’s acquired businesses. The top line also surpassed the Zacks Consensus Estimate of $574 million.
For full-year 2016, net sales came in at $2,267.9 million, up 24.2% year over year.
Segmental Details: Middleby reports its net sales under three heads/segments. The segmental quarterly results are briefly discussed below:
Revenues from the Commercial Foodservice Equipment Group increased 20.2% on a year-over-year basis. Revenues from the Food Processing Equipment Group jumped 19.7% year over year in the quarter. However, revenues from the Residential Kitchen Equipment Group declined 5.9% year over year.
Margins: In the reported quarter, Middleby’s cost of sales climbed 6.5% year over year to $357.6 million. Gross margin expanded 290 basis points (bps) year over year to 40.1%, on the back of the benefits generated from the company’s integration initiatives.
Selling and distribution expenses came in at $55.6 million, down 1.5% year over year. Operating income surged 74.2% year over year to $126.5 million.
For full-year 2016, gross margin came in at 39.7% as against 38.7% recorded in the year-ago period. Operating income totaled $446.2 million, up 47.5% year over year.
Balance Sheet: Middleby exited the fourth quarter with cash and cash equivalents of $68.5 million as against $55.5 million recorded at the end of 2015. Long-term debt was $726.2 million compared with $734 million reported at the end of 2015.
Outlook: Middleby believes that higher demand of restaurant chain customers would likely boost sales of Commercial Foodservice Equipment Group segment in the quarters ahead. Fresh product launches of the Viking range and superior customer services are expected to reinforce revenue of the company’s Residential Kitchen Equipment Group. Also, higher demand for novel equipment solutions is estimated to drive revenue of Middleby’s Food Processing Equipment Group in the near term.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in estimate revisions. There has been one revision lower for the current quarter.
The Middleby Corporation Price and Consensus
The Middleby Corporation Price and Consensus | The Middleby Corporation Quote
VGM Scores
At this time, Middleby's stock has a nice score of 'B' on both growth and momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable for growth and momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months.