A month has gone by since the last earnings report for Middleby (
MIDD Quick Quote MIDD - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Middleby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Middleby Q1 Earnings & Revenues Beat, Increase Y/Y
Middleby 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. How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
At this time, Middleby has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Middleby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Middleby belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Illinois Tool Works (
ITW Quick Quote ITW - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Illinois Tool Works reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of +2%. EPS of $2.33 for the same period compares with $2.11 a year ago.
Illinois Tool Works is expected to post earnings of $2.39 per share for the current quarter, representing a year-over-year change of +0.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Illinois Tool Works has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.