Latest news with #BryanMittelman
Yahoo
11-06-2025
- Business
- Yahoo
MIDD Q1 Earnings Call: Spin-Off, Tariffs, and Share Buyback Dominate Management's Focus
Kitchen product manufacturer Middleby (NYSE:MIDD) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 2.2% year on year to $906.6 million. Its non-GAAP profit of $2.08 per share was 5.3% above analysts' consensus estimates. Is now the time to buy MIDD? Find out in our full research report (it's free). Revenue: $906.6 million vs analyst estimates of $941.7 million (2.2% year-on-year decline, 3.7% miss) Adjusted EPS: $2.08 vs analyst estimates of $1.97 (5.3% beat) Adjusted EBITDA: $182.1 million vs analyst estimates of $185.7 million (20.1% margin, 1.9% miss) Operating Margin: 15.5%, in line with the same quarter last year Organic Revenue fell 3.8% year on year (-8.7% in the same quarter last year) Market Capitalization: $7.96 billion Middleby's first quarter results were shaped by segment-specific trends and operational discipline across its diversified kitchen equipment portfolio. Management attributed stable margins and cash flow generation to effective cost controls and selective growth in the Residential segment, particularly outdoor products. CEO Timothy FitzGerald discussed ongoing investments in automation, digital connectivity, and the build-out of innovation centers as crucial to sustaining Middleby's position in commercial foodservice and food processing. Bryan Mittelman, CFO, noted that while the commercial segment saw benefit from beverage platform wins and favorable customer mix, muted spending by large chain customers and delivery delays in food processing held back broader sales momentum. Looking ahead, Middleby's outlook is defined by three major themes: the anticipated spin-off of its Food Processing Group, substantial tariff-related cost headwinds, and a stepped-up share buyback program. Management expects ongoing pricing actions and operational adjustments to mitigate the impact of tariffs, though margin pressures are likely to persist in the near term. FitzGerald stated, 'We have a high degree of confidence that through the balance of this year, [tariff costs] will all be offset,' but acknowledged persistent uncertainty in customer investment decisions. The company remains focused on product innovation and leveraging its U.S.-centric manufacturing base to capture share in impacted categories. Management identified the pending Food Processing spin-off, new tariffs, and accelerated share repurchases as the largest business developments, while also highlighting evolving customer demand and product innovations. Food Processing spin-off progress: Middleby reiterated that it remains on track to separate its Food Processing Group into a standalone public company in early 2026. Management believes this will allow targeted growth and capital allocation strategies for both businesses, aiming to unlock shareholder value and better align each entity with relevant industry peers. Accelerated share buyback: The board authorized an additional 7.5 million shares for repurchase, representing about 21% of outstanding equity. Management plans to deploy the majority of annual free cash flow to buybacks, citing a belief that the current share price undervalues Middleby's long-term prospects. Tariff mitigation underway: New tariffs, especially on Chinese-sourced components, are expected to add $150–$200 million in annual costs, mainly impacting the Commercial and Residential segments. Management is responding with mid- to high single-digit price increases, operational adjustments, and supply chain shifts, aiming to offset the majority of these costs by year-end. Commercial segment mix shift: Successes in beverage platforms and select cooking and refrigeration brands were partially offset by muted buying from large chain customers. Management noted a positive margin impact from favorable customer and product mix despite overall revenue softness. Product innovation and market expansion: Middleby highlighted progress in automation, ventless cooking, IoT-enabled kitchen equipment, and new beverage dispensing solutions. The company is investing in adjacent markets like poultry, pet, and snack foods, and reported strong early traction for its Open Kitchen connectivity platform and next-generation appliances. Middleby's forward guidance centers on the interplay of tariff headwinds, execution on pricing strategies, and the strategic separation of its Food Processing business. Tariff cost management: Management expects tariff-driven cost increases to pressure margins through the year, particularly in Commercial and Residential segments. The company is depending on price increases, supply chain initiatives, and operational efficiencies to restore profitability, but acknowledged that customer demand and competitive reactions could affect the pace and effectiveness of these efforts. Food Processing spin-off execution: The planned spin-off is expected to bring greater strategic focus and unlock new growth opportunities for both the remaining Middleby business and the new standalone entity. Management will provide more detail on leadership, cost structure, and financials later this year, with a dedicated shareholder event scheduled for the fourth quarter. Innovation and customer adoption: Ongoing investments in automation, digital sales tools, and connected kitchen platforms like Open Kitchen are seen as key to driving organic growth. Management indicated that successful rollout and customer uptake of new products—especially in international markets—will be critical for revenue improvement in the second half of the year. Over the coming quarters, the StockStory team will monitor (1) progress on offsetting tariff-related costs and the success of announced price adjustments, (2) milestones toward the Food Processing Group spin-off—including leadership appointments and detailed financial disclosures, and (3) evidence of sustained demand for new product rollouts and digital connectivity solutions, especially internationally. Execution on these fronts will signal whether Middleby can deliver on its strategic transformation despite current macro headwinds. Middleby currently trades at a forward P/E ratio of 14.9×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
The Middleby Corp (MIDD) Q1 2025 Earnings Call Highlights: Record Cash Flows and Strategic ...
Middleby has demonstrated strong cash flow generation, with operating cash flows of over $141 million in Q1, the highest for a first quarter. The company plans to separate its food processing business into a stand-alone public company by early 2026, aiming to unlock significant shareholder value. The Middleby Corp ( NASDAQ:MIDD ) has authorized an additional 7.5 million shares under its accelerated buyback program, reflecting confidence in the business. For the complete transcript of the earnings call, please refer to the full earnings call transcript . Story Continues Q & A Highlights Q: Can you provide an update on the 2025 sales guidance and which segments are seeing the biggest changes? A: Bryan Mittelman, CFO, explained that the full-year outlook is primarily driven by the commercial segment due to its size. The change in outlook is largely due to macroeconomic factors and trade environment uncertainties affecting consumer behavior and customer investment decisions. This uncertainty impacts all segments, but the dynamics differ between residential and commercial/food processing. Q: What informed the decision to accelerate the share buyback program? A: CEO Timothy Fitzgerald stated that the decision was influenced by several factors, including the company's strong cash flow, balance sheet, and belief that the current share price does not reflect the business's strength. The company views itself as the best investment opportunity and plans to deploy most of its cash flow towards buybacks, especially given the maturity of the commercial and residential segments. Q: How is Middleby addressing the impact of tariffs, and what are the opportunities for market share gains? A: CEO Timothy Fitzgerald noted that while tariffs present challenges, they also offer opportunities due to Middleby's strong US manufacturing footprint. The company is confident in offsetting tariff costs through operational initiatives and pricing actions. Middleby sees opportunities for market share gains in categories like light-duty cooking equipment and induction, where competitors rely more on imports. Q: Can you clarify the allocation of the $175 million tariff impact across segments and how you plan to offset these costs? A: Steven Spittle, Chief Commercial Officer, explained that the tariff impact is mostly on the commercial and residential segments, with less impact on food processing. The company plans to offset costs through pricing actions, supply chain adjustments, and operational initiatives, aiming for a cost-neutral position by the end of the year. Q: What is the outlook for new store openings, and how does it affect Middleby's revenue? A: Steven Spittle mentioned that new store openings are weighted more towards international markets, with significant growth expected in Europe, India, and Brazil. Middleby is well-positioned to support this growth due to its investments in international resources and service capabilities. The company expects sequential revenue improvement throughout the year, supported by these new store openings. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
