The Middleby Corporation (MIDD - Free Report) reported first-quarter 2024 adjusted earnings of $1.89 per share, which missed the Zacks Consensus Estimate of $2.04. The bottom line decreased 14.1% year over year due to lower sales.
Net sales of $927 million missed the consensus estimate of $977 million. The top line dipped 8% year over year. Organic revenues in the reported quarter decreased 8.7%. Acquired assets boosted sales by 0.4% while movements in foreign currencies also had a positive impact of 0.4%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group segment (representing 63.7% of net sales) were $590.3 million, down 3.8% year over year. Our estimate was $610.8 million. Organic sales in the reported quarter decreased 4.2%. Buyouts and foreign-currency translation had a positive impact of 0.2%, each on sales.
Sales from the Residential Kitchen Equipment Group segment (18.7%) totaled $173.9 million, down 21% year over year. Results were hurt by weakness in residential kitchen industry. Organic sales plunged 22.3%. Buyouts boosted sales by 0.5% while favorable foreign currency movements had a positive impact of 0.9%.
Sales from the Food Processing Equipment Group segment (17.6%) summed $162.7 million, down 6.2% year over year. We suggested the metric to be $174.4 million. Organic sales decreased 7.7% year over year. Acquisitions boosted sales 1% while foreign currency movements had a favorable impact of 0.4%.
Margin Profile
Middleby’s cost of sales decreased 7.7% year over year to $580.6 million. Gross profit fell 8.5% to $346.4 million. The gross margin contracted to 37.4% from 37.6% in the year-ago quarter.
Selling, general and administrative expenses decreased 4.4% year over year to $206 million. Operating income in the first quarter declined 14.8% year over year to $137.1 million. Operating margin decreased 120 basis points (bps) to 14.8% in the reported quarter.
Adjusted EBITDA declined 11.9% year over year to $185.8 million. Adjusted EBITDA margin fell 90 bps to 20% in the quarter.
Balance Sheet and Cash Flow
Exiting the first quarter, Middleby had cash and cash equivalents of $341 million compared with $247.5 million at the end of December 2023. Long-term debt was $2.37 billion at the end of the first quarter compared with $2.38 billion at 2023-end.
In the first three months of 2024, Middleby generated net cash of $140.9 million from operating activities compared with $92 million a year ago. Capital expenditure totaled $13.7 million compared with $25.5 million in the prior-year quarter. Free cash flow was $127.2 million in the first three months of 2024 compared with $66.5 million in the year-earlier quarter.
Zacks Rank and Key Picks
MIDD currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the Zacks Industrial Products sector:
Luxfer Holdings (LXFR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 122.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LXFR’s 2024 earnings has remained stable in the past 60 days.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2 (Buy). It delivered a trailing four-quarter average earnings surprise of 15.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 3.3%.
RBC Bearings Incorporated (RBC - Free Report) currently carries a Zacks Rank of 2. RBC delivered a trailing four-quarter average earnings surprise of 6.4%.
In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 0.6%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
The Middleby Corporation (MIDD - Free Report) reported first-quarter 2024 adjusted earnings of $1.89 per share, which missed the Zacks Consensus Estimate of $2.04. The bottom line decreased 14.1% year over year due to lower sales.
Net sales of $927 million missed the consensus estimate of $977 million. The top line dipped 8% year over year. Organic revenues in the reported quarter decreased 8.7%. Acquired assets boosted sales by 0.4% while movements in foreign currencies also had a positive impact of 0.4%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group segment (representing 63.7% of net sales) were $590.3 million, down 3.8% year over year. Our estimate was $610.8 million. Organic sales in the reported quarter decreased 4.2%. Buyouts and foreign-currency translation had a positive impact of 0.2%, each on sales.
Sales from the Residential Kitchen Equipment Group segment (18.7%) totaled $173.9 million, down 21% year over year. Results were hurt by weakness in residential kitchen industry. Organic sales plunged 22.3%. Buyouts boosted sales by 0.5% while favorable foreign currency movements had a positive impact of 0.9%.
Sales from the Food Processing Equipment Group segment (17.6%) summed $162.7 million, down 6.2% year over year. We suggested the metric to be $174.4 million. Organic sales decreased 7.7% year over year. Acquisitions boosted sales 1% while foreign currency movements had a favorable impact of 0.4%.
Margin Profile
Middleby’s cost of sales decreased 7.7% year over year to $580.6 million. Gross profit fell 8.5% to $346.4 million. The gross margin contracted to 37.4% from 37.6% in the year-ago quarter.
Selling, general and administrative expenses decreased 4.4% year over year to $206 million. Operating income in the first quarter declined 14.8% year over year to $137.1 million. Operating margin decreased 120 basis points (bps) to 14.8% in the reported quarter.
Adjusted EBITDA declined 11.9% year over year to $185.8 million. Adjusted EBITDA margin fell 90 bps to 20% in the quarter.
Balance Sheet and Cash Flow
Exiting the first quarter, Middleby had cash and cash equivalents of $341 million compared with $247.5 million at the end of December 2023. Long-term debt was $2.37 billion at the end of the first quarter compared with $2.38 billion at 2023-end.
In the first three months of 2024, Middleby generated net cash of $140.9 million from operating activities compared with $92 million a year ago. Capital expenditure totaled $13.7 million compared with $25.5 million in the prior-year quarter. Free cash flow was $127.2 million in the first three months of 2024 compared with $66.5 million in the year-earlier quarter.
Zacks Rank and Key Picks
MIDD currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the Zacks Industrial Products sector:
Luxfer Holdings (LXFR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 122.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LXFR’s 2024 earnings has remained stable in the past 60 days.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2 (Buy). It delivered a trailing four-quarter average earnings surprise of 15.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 3.3%.
RBC Bearings Incorporated (RBC - Free Report) currently carries a Zacks Rank of 2. RBC delivered a trailing four-quarter average earnings surprise of 6.4%.
In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 0.6%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Get the latest research report on RBC - FREE
Get the latest research report on MIDD - FREE
Get the latest research report on CR - FREE
Get the latest research report on LXFR - FREE