Middleby Corporation Reports $906.6 Million in Net Sales, Plans Spin-Off of Food Processing Business

The Middleby Corporation reported a net sales figure of $906.6 million for the three months ended March 29, 2025, reflecting a decrease of 2.2% compared to $926.9 million in the same period last year. The decline in sales was attributed to a decrease of $42.7 million, or 4.6%, excluding contributions from recent acquisitions. The company noted that foreign exchange rates negatively impacted sales by approximately $7.8 million. Despite the overall decline, the Residential Kitchen Equipment Group saw a slight increase in sales, while the Commercial Foodservice and Food Processing Equipment Groups experienced decreases of 3.2% and 2.2%, respectively.

Gross profit for the quarter was $345.9 million, down from $346.4 million year-over-year, with a gross margin rate of 38.2%, an improvement from 37.4% in the prior year. The increase in gross margin was primarily due to profitability initiatives and product mix adjustments. Selling, general, and administrative expenses decreased to $202.6 million from $206.0 million, reflecting reduced compensation costs and a favorable impact from foreign exchange rates. The company reported net earnings of $92.4 million, or $1.69 per diluted share, compared to $86.6 million, or $1.59 per diluted share, in the prior year.

In terms of strategic developments, Middleby announced its intention to spin off its Food Processing business into a separate publicly traded entity, targeting completion by early 2026. This move is expected to be tax-free for U.S. federal income tax purposes, pending customary conditions and board approval. The company did not make any acquisitions during the first quarter of 2025, but it did benefit from prior acquisitions, which contributed an additional $22.4 million in sales.

Operationally, Middleby reported a slight increase in cash and cash equivalents, totaling $745.1 million at the end of the quarter, up from $689.5 million at the end of 2024. The company generated $141.1 million in net cash from operating activities, slightly higher than the $140.9 million reported in the previous year. However, the company faced challenges with increased inventory levels, which rose by $28.7 million, reflecting ongoing supply chain constraints and inflationary pressures.

Looking ahead, Middleby remains focused on navigating the current economic landscape, which includes inflationary pressures and potential impacts from trade policies. The company is committed to implementing strategic actions to mitigate these challenges while continuing to pursue operational efficiencies and long-term growth objectives. The outlook remains cautious, with management emphasizing the importance of monitoring market conditions and adjusting strategies as necessary.