Marzetti Q1 sales slightly miss, profit falls on cyclospora outbreak, higher costs

Overview

• U.S. specialty food maker's fiscal Q1 sales declined 2.4%, slightly missing analyst expectations

• Adjusted EPS for fiscal Q1 fell and missed analyst expectations

• Company says cyclospora outbreak and higher costs drove declines in sales and profit

Outlook

• Company expects Retail segment sales to benefit from Bachan’s acquisition and new product launches

• Company anticipates Foodservice sales to remain supported by select quick-service restaurant customers

• Company expects moderate commodity cost inflation and higher diesel and freight costs, to be mitigated by pricing and cost savings

Result Drivers

• CYCLOSPORA OUTBREAK - Co said cyclospora outbreak reduced demand and sales for both Retail and Foodservice segments, with estimated 4% decline in Retail and 2% in Foodservice

• HIGHER COSTS - Co said significantly higher diesel and freight costs and commissioning costs for new production capacity reduced gross profit and operating income

• BACHAN’S ACQUISITION - Newly acquired Bachan’s brand contributed $17.8 mln in incremental Retail segment sales, offsetting some sales decline

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy."

• Wall Street's median 12-month price target for The Marzetti Company is $135.00, about 21.7% above its November 2 closing price of $110.93

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 15 three months ago

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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)