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Middleby (MIDD) Down 7.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Middleby (MIDD - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Middleby 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.

Middleby Q1 Earnings & Sales Miss Estimates, Down Y/Y

Middleby 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -10.32% due to these changes.

VGM Scores

At this time, Middleby has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Middleby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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