Middleby (MIDD) Q2 Earnings & Revenues Beat, Increase Y/Y
The Middleby Corporation MIDD reported second-quarter 2023 adjusted earnings (excluding 31 cents from non-recurring items) of $2.47 per share, which surpassed the Zacks Consensus Estimate of $2.32. The bottom line increased 10.8% year over year on higher sales.
Net sales of $1,040 million surpassed the Zacks Consensus Estimate of $1034.7 million. The top line inched up 2.6% 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%. Organic revenues in the reported quarter decreased 2.3%. Acquired assets boosted sales by 4.9%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 62.1% of the net sales) were $645.66 million, up 6.5% year over year. Our estimate for Commercial Foodservice revenues in the second quarter was $634.7 million. Organic sales in the reported quarter increased 2.9%. Buyouts boosted sales by 3.8%, while foreign-currency woes affected sales by 0.2%.
The Middleby Corporation Price, Consensus and EPS Surprise
The Middleby Corporation price-consensus-eps-surprise-chart | The Middleby Corporation Quote
Sales from the Residential Kitchen Equipment Group (representing 19.8% of the reported quarter’s net sales) totaled $205.57 million, down 26.6% year over year. Results were hurt by inventory de-stocking in the residential business and housing market weakness. Our estimate for segmental revenues was $221.4 million. Organic sales in the quarter under review dropped 26.8%. Favorable foreign currency movements boosted sales by 0.2%.
Sales from the Food Processing Equipment Group (representing 18.1% of the reported net sales) summed $188.75 million, up 48.2% year over year. Our estimate for Food Processing revenues was pegged at $175.5 million. Organic sales in the second quarter jumped 26.7%. Acquisitions boosted sales by 21%, while foreign currency movements had a favorable impact of 0.5%.
Margin Profile
In the second quarter, Middleby’s cost of sales dipped nearly 1% year over year to $646.75 million. Gross profit augmented 9% to $393.24 million. Gross margin increased to 37.8% from 35.6% in the year-ago quarter.
Selling, general and administrative expenses increased 7.4% year over year to $203.52 million. Segment operating income in the second quarter rose 10.5% year over year to $184.77 million. Operating margin increased to 17.8% from 16.5% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the second quarter, Middleby had cash and cash equivalents of $157.28 million compared with $162 million at the end of December 2022. Long-term debt was $2.69 billion at the end of the second quarter compared with $2.68 billion at 2022-end.
In the first six months of 2023, Middleby, carrying a Zacks Rank #4 (Sell), generated net cash of $153.95 million from operating activities compared with $89.46 million in the year-ago period. Capital expenditure totaled $48.32 million compared with $32.13 in the year-ago period. Free cash flow was $105.64 million in the first half of 2023 compared with $57.32 million in the year-ago period.
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Performance of Other Industrial Companies
A. O. Smith Corporation’s AOS second-quarter 2023 adjusted earnings (excluding 3 cents from non-recurring items) of $1.01 per share surpassed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line jumped 23.2% year over year.
A. O. Smith’s net sales of $960.8 million underperformed the consensus estimate of $971 million. The top line dipped 0.5% year over year.
Allegion plc’s ALLE second-quarter 2023 adjusted earnings of $1.76 per share surpassed the Zacks Consensus Estimate of $1.69. The bottom line increased 28.5% year over year.
Allegion’s revenues of $912.5 million missed the Zacks Consensus Estimate of $927 million. However, the top line jumped 18% from the year-ago quarter.
IDEX Corporation’s IEX second-quarter 2023 adjusted earnings of $2.18 per share surpassed the Zacks Consensus Estimate of adjusted earnings of $2.12 per share. On a year-over-year basis, the bottom line increased 7.9%.
IDEX’s net sales of $846.2 million underperformed the Zacks Consensus Estimate of $847 million. However, the top line increased 6.3% year over year. Organic sales in the quarter increased 3% year over year.
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