The Marzetti Company Reports Fourth Quarter and Fiscal Year Results
Key Terms
temporary supply agreement financial
adjusted diluted eps financial
non-gaap financial measures financial
basis points financial
Fourth Quarter Summary
-
Consolidated fourth quarter net sales declined
2.2% to . Excluding the prior-year quarter’s$465.0 million in non-core sales attributed to a temporary supply agreement (“TSA”) with Winland Foods, Inc., which concluded during the quarter ended March 31, 2026, consolidated net sales increased$12.2 million 0.4% . -
Retail segment net sales increased
0.9% to , which includes$243.6 million of incremental sales from Bachan’s, Inc., our newly acquired Japanese Barbecue Sauce brand known for its delicious, authentic, clean-label products. The acquisition closed on May 1, 2026.$15.4 million -
Foodservice segment net sales decreased
5.3% to on a reported basis. Excluding the non-core TSA sales of$221.4 million in the prior-year quarter, Foodservice segment net sales decreased$12.2 million 0.1% . -
Consolidated gross profit increased
to a fourth quarter record$7.9 million . Reported gross profit margin improved 220 basis points to$114.0 million 24.5% driven by our ongoing cost savings programs. -
SG&A expenses increased
to$12.3 million . The higher SG&A expenses include a$74.3 million increase in acquisition-related costs in addition to$10.5 million in incremental noncash amortization expense attributed to Bachan’s intangible assets.$1.6 million -
Consolidated operating income grew
to$18.8 million . In addition to the impacts of the increased gross profit and higher SG&A expenses, consolidated operating income includes the benefit of an$57.7 million gain on the sale of our property in$18.5 million Milpitas, California , the former location of the sauce and dressing facility that we closed in fiscal 2026. The gain is reported as part of the Restructuring, Impairment and Other line item. In the prior-year period, restructuring and impairment charges of$18.5 million primarily relate to the$5.1 million Milpitas plant closure. -
Fourth quarter net income was
per diluted share versus$1.76 per diluted share last year. In the current-year quarter, the acquisition-related SG&A expenses decreased net income by$1.18 per diluted share; the incremental noncash amortization expense for Bachan’s intangible assets reduced net income by$0.31 per diluted share; and the net impact of all restructuring, impairment and other items, most of which is the gain on the$0.05 Milpitas property sale, increased net income by per diluted share. In the prior-year quarter, restructuring and impairment charges reduced net income by$0.66 per diluted share while acquisition-related SG&A costs reduced net income by$0.15 per diluted share. Excluding these items, the resulting Adjusted Net Income Per Diluted Share (“Adjusted Diluted EPS”) grew$0.01 9.0% to in the current-year quarter, versus$1.46 last year, driven by the higher gross profit.$1.34
CEO David A. Ciesinski commented, “We were pleased to report record gross profit and strong gross margin improvement in our fiscal fourth quarter. In our Retail segment, the newly acquired Bachan’s brand added
Fourth Quarter Results
Fourth quarter consolidated net sales decreased
Consolidated gross profit increased
SG&A expenses increased
The
Consolidated operating income increased
Interest expense totaled
Net income increased
Fiscal Year Results
For the fiscal year ended June 30, 2026, net sales increased
Fiscal 2026 cash flows from operating activities increased
Fiscal 2027 Outlook
Mr. Ciesinski commented, “Looking ahead to fiscal 2027, Retail segment sales will continue to benefit from incremental sales attributed to the Bachan’s acquisition in addition to contributions from the new items we recently launched or have planned for introduction for both our legacy brands and licensing program. In the Foodservice segment, we expect sales to be supported by select quick-service restaurant customers in our mix of national chain restaurant accounts. Note that external factors, including
Conference Call on the Web
The company’s fourth quarter and fiscal year-end conference call is scheduled for this morning, August 25, at 10:00 a.m. ET. Access to a live webcast and subsequent replay of the call is available through a link on the company’s website at investors.marzetticompany.com.
About the Company
The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Forward-Looking Statements
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This news release contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:
- the ability to successfully integrate the acquired Bachan’s business and achieve operational and financial performance objectives;
- changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill;
- significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and foodborne outbreaks;
- efficiencies in plant operations and our overall supply chain network;
- geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;
- inflationary pressures resulting in higher input costs;
- adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
- fluctuations in the cost and availability of ingredients and packaging;
- the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
- price and product competition;
- changes in our cash flow or use of cash in various business activities;
- the success and cost of new product development efforts;
- the lack of market acceptance of new products;
- the impact of customer store brands on our branded retail volumes;
- the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the federal, state or local government;
- adverse changes in trade policies, including increased tariffs, retaliatory trade measures, or other trade restrictions;
- dependence on key personnel and changes in key personnel;
- adequate supply of labor for our manufacturing facilities;
- stability of labor relations;
- the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;
- dependence on a wide array of critical third parties to support our operations, including contract manufacturers, distributors, logistics providers and IT vendors;
- cyber-security incidents, information technology disruptions, and data breaches;
- the potential for loss of larger programs or key customer relationships;
- capacity constraints that may affect our ability to meet demand or may increase our costs;
- failure to maintain or renew license agreements;
- the possible occurrence of product recalls or other defective or mislabeled product costs;
- maintenance of competitive position with respect to other manufacturers;
- the outcome of any litigation or arbitration;
- the effect of consolidation of customers within key market channels;
- changes in estimates in critical accounting judgments; and
- risks related to other factors described under “Risk Factors” in other reports and statements filed by us with the Securities and Exchange Commission, including without limitation our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (available at www.sec.gov).
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.
THE MARZETTI COMPANY |
||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
||||||||||||||
(In thousands except per-share amounts) |
||||||||||||||
|
Three Months Ended |
|
Fiscal Year Ended |
|||||||||||
June 30, |
June 30, |
|||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|||||||
Net sales |
$ |
465,030 |
|
|
$ |
475,427 |
|
$ |
1,929,823 |
|
|
$ |
1,909,122 |
|
Cost of sales |
|
351,037 |
|
|
|
369,335 |
|
|
1,452,535 |
|
|
|
1,453,476 |
|
Gross profit |
|
113,993 |
|
|
|
106,092 |
|
|
477,288 |
|
|
|
455,646 |
|
Selling, general & administrative expenses |
|
74,337 |
|
|
|
62,075 |
|
|
254,601 |
|
|
|
230,227 |
|
Restructuring, impairment and other, net |
|
(18,034 |
) |
|
|
5,102 |
|
|
(16,024 |
) |
|
|
5,102 |
|
Operating income |
|
57,690 |
|
|
|
38,915 |
|
|
238,711 |
|
|
|
220,317 |
|
Interest expense |
|
(1,763 |
) |
|
|
— |
|
|
(1,763 |
) |
|
|
— |
|
Pension settlement charge |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(13,968 |
) |
Other, net |
|
594 |
|
|
|
1,594 |
|
|
5,022 |
|
|
|
7,114 |
|
Income before income taxes |
|
56,521 |
|
|
|
40,509 |
|
|
241,970 |
|
|
|
213,463 |
|
Taxes based on income |
|
8,231 |
|
|
|
7,980 |
|
|
50,364 |
|
|
|
46,116 |
|
Net income |
$ |
48,290 |
|
|
$ |
32,529 |
|
$ |
191,606 |
|
|
$ |
167,347 |
|
|
|
|
|
|
|
|
|
|||||||
Net income per common share: (a) |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
1.76 |
|
|
$ |
1.18 |
|
$ |
6.98 |
|
|
$ |
6.08 |
|
Diluted |
$ |
1.76 |
|
|
$ |
1.18 |
|
$ |
6.98 |
|
|
$ |
6.07 |
|
|
|
|
|
|
|
|
|
|||||||
Cash dividends per common share |
$ |
1.00 |
|
|
$ |
0.95 |
|
$ |
3.95 |
|
|
$ |
3.75 |
|
|
|
|
|
|
|
|
|
|||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||||
Basic |
|
27,321 |
|
|
|
27,457 |
|
|
27,385 |
|
|
|
27,469 |
|
Diluted |
|
27,338 |
|
|
|
27,488 |
|
|
27,406 |
|
|
|
27,489 |
|
(a) |
Based on the weighted average number of shares outstanding during each period. |
THE MARZETTI COMPANY |
|||||||||||||||
BUSINESS SEGMENT INFORMATION (Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
|
Three Months Ended |
|
Fiscal Year Ended |
||||||||||||
June 30, |
June 30, |
||||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||||||
NET SALES |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
243,628 |
|
|
$ |
241,554 |
|
|
$ |
1,002,769 |
|
|
$ |
1,003,409 |
|
Foodservice |
|
221,402 |
|
|
|
233,873 |
|
|
|
927,054 |
|
|
|
905,713 |
|
Total Net Sales |
$ |
465,030 |
|
|
$ |
475,427 |
|
|
$ |
1,929,823 |
|
|
$ |
1,909,122 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME |
|
|
|
|
|
|
|
||||||||
Retail |
$ |
43,155 |
|
|
$ |
40,905 |
|
|
$ |
203,669 |
|
|
$ |
211,695 |
|
Foodservice |
|
32,405 |
|
|
|
28,835 |
|
|
|
131,329 |
|
|
|
111,579 |
|
Nonallocated Restructuring, Impairment and Other, Net |
|
18,472 |
|
|
|
(5,102 |
) |
|
|
17,068 |
|
|
|
(5,102 |
) |
Corporate Expenses |
|
(36,342 |
) |
|
|
(25,723 |
) |
|
|
(113,355 |
) |
|
|
(97,855 |
) |
Total Operating Income |
$ |
57,690 |
|
|
$ |
38,915 |
|
|
$ |
238,711 |
|
|
$ |
220,317 |
|
THE MARZETTI COMPANY |
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||
(In thousands) |
|||||
|
June 30, |
|
June 30, |
||
2026 |
|
2025 |
|||
ASSETS |
|
||||
Current assets: |
|
||||
Cash and equivalents |
$ |
25,096 |
|
$ |
161,476 |
Receivables |
|
105,488 |
|
|
95,817 |
Inventories |
|
205,062 |
|
|
169,301 |
Other current assets |
|
25,315 |
|
|
17,037 |
Total current assets |
|
360,961 |
|
|
443,631 |
Net property, plant and equipment |
|
551,554 |
|
|
534,543 |
Other assets |
|
692,505 |
|
|
296,550 |
Total assets |
$ |
1,605,020 |
|
$ |
1,274,724 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|||
Current liabilities: |
|
|
|||
Accounts payable |
$ |
156,785 |
$ |
117,962 |
|
Accrued liabilities |
|
64,751 |
|
68,332 |
|
Current portion of long-term debt |
|
10,000 |
|
— |
|
Total current liabilities |
|
231,536 |
|
186,294 |
|
Long-term debt |
|
189,276 |
|
— |
|
Other noncurrent liabilities and deferred income taxes |
|
131,058 |
|
89,935 |
|
Shareholders’ equity |
|
1,053,150 |
|
998,495 |
|
Total liabilities and shareholders’ equity |
$ |
1,605,020 |
$ |
1,274,724 |
|
Reconciliation of GAAP to non-GAAP Financial Measures
The Marzetti Company prepares its consolidated financial statements in accordance with
Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures that exclude non-core sales and cost of sales attributed to a temporary supply agreement (“TSA”) made in connection with our February 2025 acquisition of Winland’s
|
Three Months Ended June 30, 2026 |
|
Three Months Ended June 30, 2025 |
|||||||||||||||||||
(Unaudited, Dollars In Thousands) |
Reported |
|
TSA-Related |
|
Adjusted
|
|
Reported |
|
TSA-Related |
|
Adjusted
|
|||||||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Sales |
$ |
465,030 |
|
|
$ |
— |
|
$ |
465,030 |
|
|
$ |
475,427 |
|
|
$ |
12,174 |
|
|
$ |
463,253 |
|
Cost of Sales |
|
351,037 |
|
|
|
— |
|
|
351,037 |
|
|
|
369,335 |
|
|
|
12,174 |
|
|
|
357,161 |
|
Gross Profit |
$ |
113,993 |
|
|
$ |
— |
|
$ |
113,993 |
|
|
$ |
106,092 |
|
|
$ |
— |
|
|
$ |
106,092 |
|
Gross Margin |
|
24.5 |
% |
|
|
N/M |
|
|
24.5 |
% |
|
|
22.3 |
% |
|
|
— |
% |
|
|
22.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foodservice Segment |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foodservice Net Sales |
$ |
221,402 |
|
|
$ |
— |
|
$ |
221,402 |
|
|
$ |
233,873 |
|
|
$ |
12,174 |
|
|
$ |
221,699 |
|
|
Fiscal Year Ended June 30, 2026 |
|
Fiscal Year Ended June 30, 2025 |
||||||||||||||||||||
(Unaudited, Dollars In Thousands) |
Reported |
|
TSA-Related |
|
Adjusted
|
|
Reported |
|
TSA-Related |
|
Adjusted
|
||||||||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Sales |
$ |
1,929,823 |
|
|
$ |
20,415 |
|
|
$ |
1,909,408 |
|
|
$ |
1,909,122 |
|
|
$ |
14,237 |
|
|
$ |
1,894,885 |
|
Cost of Sales |
|
1,452,535 |
|
|
|
20,415 |
|
|
|
1,432,120 |
|
|
|
1,453,476 |
|
|
|
14,237 |
|
|
|
1,439,239 |
|
Gross Profit |
$ |
477,288 |
|
|
$ |
— |
|
|
$ |
477,288 |
|
|
$ |
455,646 |
|
|
$ |
— |
|
|
$ |
455,646 |
|
Gross Margin |
|
24.7 |
% |
|
|
— |
% |
|
|
25.0 |
% |
|
|
23.9 |
% |
|
|
— |
% |
|
|
24.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foodservice Segment |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foodservice Net Sales |
$ |
927,054 |
|
|
$ |
20,415 |
|
|
$ |
906,639 |
|
|
$ |
905,713 |
|
|
$ |
14,237 |
|
|
$ |
891,476 |
|
Adjusted Operating Income and Adjusted Diluted EPS are non-GAAP financial measures that exclude certain items affecting comparability, which can impact the analysis of our underlying core business performance and trends. The following tables present a reconciliation between 1) operating income as reported in accordance with GAAP and Adjusted Operating Income and 2) diluted EPS as reported in accordance with GAAP and Adjusted Diluted EPS for the three months and fiscal years ended June 30, 2026 and 2025. For 2026, the adjustments reflect incremental SG&A expenses attributed to the Bachan’s acquisition; incremental SG&A expenses attributed to the amortization of intangible assets resulting from the Bachan’s acquisition; and restructuring, impairment and other, net, which consists of restructuring and impairment charges resulting from the closure of our sauce and dressing production facility in
|
|
Three Months Ended June 30, |
|||||||||||||||
Unaudited, dollars in thousands except per share data |
Reported |
SG&A
|
SG&A
|
Restructuring,
|
Pension
|
Adjusted
|
|||||||||||
2026 |
Operating Income |
$ |
57,690 |
|
$ |
10,974 |
$ |
1,606 |
$ |
(18,034 |
) |
$ |
— |
$ |
52,236 |
|
|
2026 |
Diluted EPS |
$ |
1.76 |
|
$ |
0.31 |
$ |
0.05 |
$ |
(0.66 |
) |
$ |
— |
$ |
1.46 |
|
|
2025 |
Operating Income |
$ |
38,915 |
|
$ |
451 |
$ |
— |
$ |
5,102 |
|
$ |
— |
$ |
44,468 |
|
|
2025 |
Diluted EPS |
$ |
1.18 |
|
$ |
0.01 |
$ |
— |
$ |
0.15 |
|
$ |
— |
$ |
1.34 |
|
|
2026 vs 2025: |
|
|
|
|
|
|
|||||||||||
Operating Income Change ($) |
$ |
18,775 |
|
$ |
10,523 |
$ |
1,606 |
$ |
(23,136 |
) |
$ |
— |
$ |
7,768 |
|
||
Operating Income Change (%) |
|
48.2 |
% |
|
N/M |
|
N/M |
|
(453.5 |
)% |
|
— |
|
17.5 |
% |
||
Diluted EPS Change ($) |
$ |
0.58 |
|
$ |
0.30 |
$ |
0.05 |
$ |
(0.81 |
) |
$ |
— |
$ |
0.12 |
|
||
Diluted EPS Change (%) |
|
49.2 |
% |
|
N/M |
|
N/M |
|
(540.0 |
)% |
|
— |
|
9.0 |
% |
||
* The sum of individual per share amounts may not add due to rounding. |
|||||||||||||||||
|
|
Fiscal Year Ended June 30, |
|||||||||||||||||
Unaudited, dollars in thousands except per share data |
Reported |
SG&A
|
SG&A
|
Restructuring,
|
Pension
|
Adjusted
|
|||||||||||||
2026 |
Operating Income |
$ |
238,711 |
|
$ |
14,509 |
|
$ |
1,606 |
$ |
(16,024 |
) |
$ |
— |
|
$ |
238,802 |
|
|
2026 |
Diluted EPS |
$ |
6.98 |
|
$ |
0.41 |
|
$ |
0.05 |
$ |
(0.60 |
) |
$ |
— |
|
$ |
6.83 |
|
|
2025 |
Operating Income |
$ |
220,317 |
|
$ |
3,781 |
|
$ |
— |
$ |
5,102 |
|
$ |
— |
|
$ |
229,200 |
|
|
2025 |
Diluted EPS |
$ |
6.07 |
|
$ |
0.11 |
|
$ |
— |
$ |
0.15 |
|
$ |
0.39 |
|
$ |
6.72 |
|
|
2026 vs 2025: |
|
|
|
|
|
|
|||||||||||||
Operating Income Change ($) |
$ |
18,394 |
|
$ |
10,728 |
|
$ |
1,606 |
$ |
(21,126 |
) |
$ |
— |
|
$ |
9,602 |
|
||
Operating Income Change (%) |
|
8.3 |
% |
|
283.7 |
% |
|
N/M |
|
(414.1 |
)% |
|
— |
|
|
4.2 |
% |
||
Diluted EPS Change ($) |
$ |
0.91 |
|
$ |
0.30 |
|
$ |
0.05 |
$ |
(0.75 |
) |
$ |
(0.39 |
) |
$ |
0.11 |
|
||
Diluted EPS Change (%) |
|
15.0 |
% |
|
272.7 |
% |
|
N/M |
|
(500.0 |
)% |
|
(100.0 |
)% |
|
1.6 |
% |
||
* The sum of individual per share amounts may not add due to rounding. |
|||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20260824316576/en/
FOR FURTHER INFORMATION:
Dale N. Ganobsik
Vice President, Corporate Finance and Investor Relations
The Marzetti Company
Phone: 614/224-7141
Email: ir@marzetti.com
Source: The Marzetti Company