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Middleby (MIDD) Q4 Earnings Beat, Revenues Decrease Y/Y

The Middleby Corporation MIDD reported fourth-quarter 2023 adjusted earnings of $2.65 per share, which surpassed the Zacks Consensus Estimate of $2.44. The bottom line increased 3.1% year over year due to lower costs.

Net sales of $1.00 billion missed the consensus estimate of $1.01 billion. The top line dipped 2.2% year over year. Organic revenues in the reported quarter decreased 4.7%. Acquired assets boosted sales by 1.3% while movements in foreign currencies had a positive impact of 1.2%.

Segmental Results

Sales from the Commercial Foodservice Equipment Group (representing 62.3% of the net sales) were $627.9 million, down 0.2% year over year. Our estimate for Commercial Foodservice revenues in the fourth quarter was $633.6 million. Organic sales in the reported quarter decreased 2.3%. Buyouts boosted sales 1.4% while foreign-currency translation had a positive impact of 0.8%.

Sales from the Residential Kitchen Equipment Group (representing 18.7% of the reported quarter’s net sales) totaled $189 million, down 12.5% year over year. Results were hurt by inventory de-stocking in the residential business and housing market weakness. Our estimate for segmental revenues was $200.7 million. Organic sales in the quarter under review dropped 14.6%. Favorable foreign currency movements boosted sales 1.8%.

Sales from the Food Processing Equipment Group (representing 19% of the reported net sales) summed $191.7 million, up 2.7% year over year. Our estimate for Food Processing revenues was pegged at $183.3 million. Organic sales in the fourth quarter decreased 1.3% year over year. Acquisitions boosted sales 2.3% while foreign currency movements had a favorable impact of 1.7%.

The Middleby Corporation Price, Consensus and EPS Surprise

The Middleby Corporation price-consensus-eps-surprise-chart | The Middleby Corporation Quote

Margin Profile

In the fourth quarter, Middleby’s cost of sales decreased 3.1% year over year to $621.8 million. Gross profit decreased 0.8% to $386.8 million. The gross margin increased to 38.4% from 37.8% in the year-ago quarter.

Selling, general and administrative expenses decreased 4.4% year over year to $191.6 million. Segment operating income in the fourth quarter rose 2.4% year over year to $192.7 million. Operating margin decreased to 11.4% from 18.2% in the year-ago period.

Balance Sheet and Cash Flow

Exiting the fourth quarter, Middleby had cash and cash equivalents of $247.5 million compared with $162 million at the end of December 2022. Long-term debt was $2.4 billion at the end of the fourth quarter compared with $2.7 billion in 2022 end.

In 2023, Middleby, carrying a current Zacks Rank #3 (Hold), generated net cash of $628.8 million from operating activities compared with $332.5 million in the year-ago period. Capital expenditure totaled $85.2 million compared with $67.3 in the year-ago period. Free cash flow was $543.6 million in 2023 compared with $265.3 million in the year-ago period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industrial Companies

Tetra Tech, Inc. TTEK reported first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $1.40 per share, which surpassed the Zacks Consensus Estimate of $1.35. The bottom line surged 4.5% year over year driven by strong momentum in each of its segments.

In the fiscal first quarter, Tetra Tech generated adjusted revenues of $1.2 billion, reflecting a year-over-year increase of 37.3%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.0 billion, up 37.8% year over year. Tetra Tech’s revenues exceeded the consensus estimate of $974 million.

A. O. Smith Corporation’s AOS fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year, driven by the continued strong demand for residential water heaters in North America.

Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.

Illinois Tool Works Inc. ITW reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year.

The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year due to a favorable foreign currency translation of 1.2%. However, organic sales decreased 0.5% and divestitures reduced revenues by 0.4%.

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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report

Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report

A. O. Smith Corporation (AOS) : Free Stock Analysis Report

The Middleby Corporation (MIDD) : Free Stock Analysis Report

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