Marzetti Q1 sales slightly miss, profit falls on cyclospora outbreak, higher costs
MZTI•Marzetti’s fiscal first-quarter sales fell 2.4% to $481.52 million, slightly below expectations, while adjusted EPS fell to $1.14 and missed expectations. The company said a cyclospora outbreak and higher costs hurt sales and profit.
1. Quarterly results
The Marzetti Company reported fiscal first-quarter sales of $481.52 million, down 2.4% and slightly below the $484 million consensus estimate. Adjusted EPS was $1.14, below the $1.36 estimate, and net income was $29.30 million.
2. Outbreak and costs
The company said the cyclospora outbreak reduced demand and sales in both segments, with an estimated 4% decline in Retail and 2% in Foodservice. Significantly higher diesel and freight costs, along with commissioning costs for new production capacity, reduced gross profit and operating income.
3. Outlook and acquisition
Bachan’s contributed $17.8 million in incremental Retail sales, offsetting some of the decline. The company expects Retail sales to benefit from the acquisition and new product launches, while Foodservice sales are expected to remain supported by select quick-service restaurant customers. It anticipates moderate commodity cost inflation and higher diesel and freight costs, to be mitigated by pricing and cost savings.
