Did The Marzetti beat or miss consensus estimates last quarter?

What is the market's earnings forecast for The Marzetti next quarter?

What does The Marzetti do and what are its main business segments?

What is The Marzetti's gross profit margin?

What were the key takeaways from The Marzetti's earnings call?

What factors drove the changes in The Marzetti's revenue and profit?

What is The Marzetti's latest dividend and current dividend yield?

What guidance did The Marzetti's management provide for the next earnings period?

- **Revenue Records**: Q1 2026 sales hit $493 million (+5.8% YoY), driven by Retail licensing success (Chick-fil-A +9.6%) and Foodservice resilience (+3.5% adjusted sales).
- **Profit Margin Expansion**: Gross margin +30bps to 24.1%, operating income +8.1% YoY, fueled by supply chain efficiency and cost control.
- **Strategic Wins**: Club channel expansion for Chick-fil-A sauces, Texas Roadhouse dinner rolls, and New York Bakery gluten-free toast are key growth engines.
- **Financial Strength**: Debt-free balance sheet with $182 million cash, 62-year dividend streak, and $69.5 million operating cash flow.
- **Consumer Resilience**: Despite macro challenges, flavor-driven products (e.g., Sister Schubert's rolls, Marzetti dips) maintain category leadership.

**【CEO Summary Section】**
- **Record Q1 Sales**: Consolidated net sales reached $493 million (+5.8% YoY), with adjusted net sales of $483 million (+3.5% YoY). Gross profit and operating income also hit records at $119 million and $59 million, respectively.
- **Retail Segment Growth**: Driven by New York Bakery frozen garlic bread (8.6% sales growth, 44.1% market share) and licensing programs (Chick-fil-A sauces +9.6%, Texas Roadhouse dinner rolls). Marzetti brand produce dips grew 4.1% with 82.1% market share.
- **Foodservice Resilience**: Adjusted sales +3.5% YoY, supported by strong demand from key accounts like Chick-fil-A, Domino's, and Taco Bell. Gross profit increased 7.2% to $119 million, aided by supply chain efficiency and inflationary pricing.
- **Strategic Pillars**: Accelerate core growth, simplify supply chain, and expand through M&A/licensing. Club channel expansion for Chick-fil-A sauces and Texas Roadhouse rolls is a key driver.

**【CFO Financial Commentary】**
- **Top-Line Performance**: Net sales growth of 5.8% YoY, with 210bps from volume/mix, 140bps from pricing, and 230bps from a temporary supply agreement (TSA) with Winland Foods (expected to end Q2 2026).
- **Profitability**: Gross margin expanded 30bps to 24.1%, with adjusted margin (excluding TSA) up 80bps. Operating income grew 8.1% YoY to $59 million, despite 6.3% SG&A increase due to marketing and compensation costs.
- **Cash Flow & Dividends**: Generated $69.5 million in operating cash flow (+$49.6 million YoY). Paid a $0.95 quarterly dividend (+6% YoY), maintaining 62-year dividend streak. Debt-free balance sheet with $182 million in cash.
- **Capital Allocation**: FY26 capex forecast of $75-85 million for cost-saving projects and Atlanta facility expansion. Restructuring charges of $1.1 million for Milpitas facility closure.

**【Q&A Key Highlights】**
- **Inflation Pass-Through**: Foodservice pricing agreements allow quarterly mark-to-market adjustments, offsetting input cost inflation (e.g., soybean oil, eggs). Retail pricing lags 1-2 quarters.
- **Chick-fil-A Momentum**: Club channel expansion and core Retail growth drove 9.6% sauce sales growth vs. category +0.2%. Texas Roadhouse dinner rolls contribute $200-220 million in Retail sales.
- **Foodservice Outlook**: Q1 outperformance (+3.5% adjusted sales) suggests improved outlook for FY26, driven by strong national account demand and supply chain efficiency.
- **Marketing Investment**: Retail SG&A increased due to higher marketing spend (e.g., New York Bakery gluten-free toast), with ROI seen in category share gains.
- **Consumer Resilience**: Despite macro challenges, consumers prioritize flavor and affordable luxuries (e.g., Sister Schubert's rolls, Marzetti caramel dip).

The Marzetti Company (MZTI) Q1 2026 Earnings Call Transcript

Specialty Foods

MZTI

MZTI fundamentals

You can ask Aime