The Middleby Corporation ( MIDD Quick Quote MIDD - Free Report) reported first-quarter 2023 adjusted earnings of $2.19 per share, which surpassed the Zacks Consensus Estimate of $1.93. The bottom line inched up around 3% year over year on higher sales. Net sales of $1,007.4 million surpassed the Zacks Consensus Estimate of $968 million. The top line inched up 1.3% year over year. Organic revenues in the reported quarter decreased 1.4%. Acquired assets boosted sales by 4%, while movements in foreign currencies had a negative impact of 1.3%. Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 60.9% of the net sales) were $613.94 million, up 13.7% year over year. Organic sales in the reported quarter increased 11.5%. Buyouts boosted sales by 3.3%, while foreign-currency woes affected sales by 1.2%.
Sales from the Residential Kitchen Equipment Group (representing 21.8% of the reported quarter’s net sales) totaled $219.96 million, down 33.6% year over year. Organic sales in the quarter under review dropped 32.1%. Adverse foreign currency movements had a negative impact of 1.6%. Sales from the Food Processing Equipment Group (representing 17.2% of the reported net sales) summed $173.50 million, up 40.4% year over year. Organic sales in the quarter jumped 24.3%. Acquisitions boosted sales by 17.3%, while adverse foreign currency movements affected sales by 1.2%. Margin Profile
In the first quarter, Middleby’s cost of sales decreased 5.3% year over year to $628.66 million. Gross profit augmented 14.6% to $378.74 million. Gross margin increased to 37.6% from 33.2% in the year-ago quarter.
Selling, general and administrative expenses increased 4.5% year over year to $215.41 million. Segment operating income in the first quarter rose 31.4% year over year to $161.02 million. Operating margin increased to 16% from 12.3% in the year-ago period. Balance Sheet and Cash Flow
Exiting the first quarter, Middleby had cash and cash equivalents of $156.52 million compared with $162 million at the end of December 2022. Long-term debt was $2.69 billion at the end of the first quarter compared with $2.68 billion at 2022-end.
In the first quarter, MIDD generated net cash of $92 million from operating activities against $15.34 million of cash used in operating activities in the year-ago period. Capital expenditure totaled $25.49 million compared with $14.50 in the year-ago period. Free cash flow was $66.52 million in the first quarter, against the free cash outflow of $29.84 million in the year-ago period. Zacks Rank & Other Key Picks
Middleby carries a Zacks Rank #2 (Buy).
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