Middleby Q2 Earnings Beat Estimates, Sales Down Y/Y

The Middleby Corporation MIDD reported second-quarter 2024 adjusted earnings of $2.39 per share, which beat the Zacks Consensus Estimate of $2.27. The bottom line decreased 3.6% year over year due to lower sales.

Net sales of $992 million beat the consensus estimate of $989 million. The top line dipped 4.7% year over year. Organic revenues decreased 4.8%. Acquired assets boosted sales by 0.3% while movements in foreign currencies had a negative impact of 0.2%.

Segmental Results

Sales from the Commercial Foodservice Equipment Group segment (representing 62.5% of net sales) were $619.4 million, down 4.1% year over year. Our estimate was $624.7 million. Organic sales decreased 3.9%. Buyouts had a positive impact of 0.1% while adverse foreign-currency translation lowered sales by 0.2%.

Sales from the Residential Kitchen Equipment Group segment (19.4%) totaled $192.8 million, down 6.2% year over year. Our estimate was $186.9 million. Organic sales plunged 6.7%. Buyouts boosted sales by 0.5%.

Sales from the Food Processing Equipment Group segment (18.1%) summed $179.4 million, down 4.9% year over year. We expected the metric to be $177.3 million. Organic sales decreased 5.7% year over year. Acquisitions boosted sales by 1% while foreign currency movements had an unfavorable impact of 0.3%.

Margin Profile

Middleby's cost of sales decreased 5.4% year over year to $611.9 million. Gross profit fell 3.5% to $379.6 million. The gross margin increased to 38.3% from 37.8% in the year-ago quarter.

Selling, general and administrative expenses decreased 2.4% year over year to $198.6 million. Operating income declined 4.9% year over year to $175.7 million. Operating margin decreased 10 basis points (bps) to 17.7%.

Adjusted EBITDA declined 5.6% year over year to $216.4 million. Adjusted EBITDA margin fell 20 bps to 21.8%.

Balance Sheet and Cash Flow

Exiting the second quarter, Middleby had cash and cash equivalents of $459.5 million compared with $247.5 million at the end of December 2023. Long-term debt was $2.36 billion at the end of the second quarter compared with $2.38 billion at 2023-end.

In the first six months of 2024, Middleby generated net cash of $290.4 million from operating activities compared with $154 million a year ago. Capital expenditure totaled $24.7 million compared with $48.3 million in the prior-year quarter. Free cash flow was $265.7 million in the first six months of the year compared with $105.6 million in the year-earlier quarter.

Zacks Rank

The company currently carries a Zacks Rank #3 (Hold).

Performance of Other Industrial Companies

Pentair plc PNR reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.

Net sales rose 1.6% year over year to $1.1 billion. PNR's top line outpaced the Zacks Consensus Estimate of $1.09 billion. 

Crown Holdings, Inc. CCK reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.

Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.

A. O. Smith Corporation's AOS second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.

Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.

To read this article on Zacks.com click here.