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Reasons Why You Should Avoid Betting on Middleby Stock Right Now
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Key Takeaways
MIDD faces softness in the Residential Kitchen and Commercial Foodservice Equipment segments.
Selling and administrative expenses rose 7.5% in Q2 2025, lifting cost ratio to 21.8%.
Long-term debt stood at $2.33B in Q2 2025, with $1.6B drawn under its credit facility.
The Middleby Corporation (MIDD - Free Report) has failed to impress investors with its recent operational performance as it is grappling with persistent weakness across its businesses, escalating costs and expenses, and a high debt level.
Let’s discuss the factors that continue to take a toll on the firm.
Factors Affecting MIDD
Business Weakness: Middleby has been witnessing weakness in the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group segments. Lower sales of outdoor products due to tariff-related headwinds are affecting the performance of the Residential Kitchen Equipment Group segment. Challenging conditions in domestic and European markets remain concerning as well.
Softness in the restaurant industry, due to declining traffic, is affecting the demand for the company's products within the Commercial Foodservice Equipment Group segment. High wages and recent food cost inflation in the US have pressured restaurant operators, leading to delayed investments, which are alarming for the segment as well.
Escalating Costs: MIDD has been dealing with the adverse impacts of high costs and expenses. During the second quarter of 2025, the company witnessed a 7.5% year-over-year increase in selling and administrative expenses due to high strategic transaction costs and professional fees. The metric, as a percentage of total revenues, increased 180 basis points to 21.8%. Escalating costs and expenses, if left unchecked, may negatively impact Middleby’s profitability in the near term.
MIDD’s Price Performance
Shares of this Zacks Rank #5 (Strong Sell) company have declined 9.8% in the past six months against the industry’s 10.9% growth.
Image Source: Zacks Investment Research
Long-Term Debt: High debt levels raise financial obligations and hurt the company’s profitability. At the end of second-quarter 2025, MIDD’s long-term debt remained high at $2.33 billion. It is worth noting here that in October 2021, the company amended its credit agreement, increasing its size to $4.5 billion from the previous $3.1 billion. The credit facility included a revolving credit facility, a term loan and a delayed draw-term loan. As of June 28, 2025, Middleby had $1.6 billion in total borrowings under its credit facility, including $918.7 million in term loans and $703.1 million in delayed draw term loans.
Forex Woes: International businesses expose Middleby to risks arising from geopolitical issues and unfavorable movements in foreign currencies. This is because a strengthening U.S. dollar may require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry for the company.
FLS delivered a trailing four-quarter average earnings surprise of 5.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 5%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.5%.
In the past 60 days, the consensus estimate for CR’s 2025 earnings has increased 4%.
DNOW Inc. (DNOW - Free Report) presently carries a Zacks Rank of 2. DNOW delivered a trailing four-quarter average earnings surprise of 44.1%.
In the past 60 days, the consensus estimate for DNOW’s 2025 earnings has increased 9.2%.
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Reasons Why You Should Avoid Betting on Middleby Stock Right Now
Key Takeaways
The Middleby Corporation (MIDD - Free Report) has failed to impress investors with its recent operational performance as it is grappling with persistent weakness across its businesses, escalating costs and expenses, and a high debt level.
Let’s discuss the factors that continue to take a toll on the firm.
Factors Affecting MIDD
Business Weakness: Middleby has been witnessing weakness in the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group segments. Lower sales of outdoor products due to tariff-related headwinds are affecting the performance of the Residential Kitchen Equipment Group segment. Challenging conditions in domestic and European markets remain concerning as well.
Softness in the restaurant industry, due to declining traffic, is affecting the demand for the company's products within the Commercial Foodservice Equipment Group segment. High wages and recent food cost inflation in the US have pressured restaurant operators, leading to delayed investments, which are alarming for the segment as well.
Escalating Costs: MIDD has been dealing with the adverse impacts of high costs and expenses. During the second quarter of 2025, the company witnessed a 7.5% year-over-year increase in selling and administrative expenses due to high strategic transaction costs and professional fees. The metric, as a percentage of total revenues, increased 180 basis points to 21.8%. Escalating costs and expenses, if left unchecked, may negatively impact Middleby’s profitability in the near term.
MIDD’s Price Performance
Shares of this Zacks Rank #5 (Strong Sell) company have declined 9.8% in the past six months against the industry’s 10.9% growth.
Image Source: Zacks Investment Research
Long-Term Debt: High debt levels raise financial obligations and hurt the company’s profitability. At the end of second-quarter 2025, MIDD’s long-term debt remained high at $2.33 billion. It is worth noting here that in October 2021, the company amended its credit agreement, increasing its size to $4.5 billion from the previous $3.1 billion. The credit facility included a revolving credit facility, a term loan and a delayed draw-term loan. As of June 28, 2025, Middleby had $1.6 billion in total borrowings under its credit facility, including $918.7 million in term loans and $703.1 million in delayed draw term loans.
Forex Woes: International businesses expose Middleby to risks arising from geopolitical issues and unfavorable movements in foreign currencies. This is because a strengthening U.S. dollar may require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry for the company.
Stocks to Consider
Some better-ranked companies are discussed below.
Flowserve Corporation (FLS - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 5.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 5%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.5%.
In the past 60 days, the consensus estimate for CR’s 2025 earnings has increased 4%.
DNOW Inc. (DNOW - Free Report) presently carries a Zacks Rank of 2. DNOW delivered a trailing four-quarter average earnings surprise of 44.1%.
In the past 60 days, the consensus estimate for DNOW’s 2025 earnings has increased 9.2%.