Middleby Corp Reports 3.9% Decrease in Net Sales for Q3 2024, Gross Margin Remains Stable

For the three months ended September 28, 2024, Middleby Corp reported net sales of $942.8 million, a decrease of $37.9 million or 3.9% from $980.7 million in the same period of the previous year. For the nine months ended September 28, 2024, net sales totaled $2.861 billion, down $166.7 million or 5.5% from $3.028 billion for the nine months ended September 30, 2023. The decline in sales was attributed to a decrease in domestic sales across key segments, particularly in the Commercial Foodservice Equipment Group, which saw a drop of $33.9 million or 5.3% to $600.1 million.

Gross profit for the third quarter of 2024 was $355.4 million, down from $375.3 million in the prior year, resulting in a gross margin of 37.7%, compared to 38.3% previously. For the nine-month period, gross profit decreased to $1.081 billion from $1.147 billion, with a gross margin rate of 37.8%, slightly lower than the 37.9% reported in the prior year.

Operating income for the third quarter was $173.4 million, marginally down from $174.4 million in the same quarter of 2023. For the nine months, operating income decreased to $486.3 million from $520.2 million. Net earnings for the third quarter increased to $114.2 million from $108.7 million, while for the nine months, net earnings decreased to $316.1 million from $324.6 million. Earnings per share for the third quarter rose to $2.12 from $2.03, but for the nine months, it fell to $5.88 from $6.06.

Middleby Corp's cash and cash equivalents increased significantly to $606.0 million as of September 28, 2024, up from $247.5 million at the beginning of the year. The company reported net cash provided by operating activities of $447.1 million for the nine months, an increase from $373.1 million in the prior year.

The company has been actively managing its costs amid inflationary pressures in wages, logistics, and raw materials. It implemented price increases to mitigate these impacts. Additionally, Middleby completed several acquisitions in 2023 and 2024, contributing to its net sales, although the overall impact was limited. The company also reported a decrease in selling, general, and administrative expenses, which fell to $179.5 million in the third quarter from $196.4 million in the prior year.

As of September 28, 2024, total debt remained stable at approximately $2.4 billion, with the company maintaining compliance with all covenants related to its borrowing agreements.