The Marzetti (MZTI) Q2 2026 earnings summary

Executive summary

• Consolidated net sales rose 1.7% to $518 million for the quarter ended December 31, 2025, with adjusted net sales (excluding TSA) up 0.1% to $509.8 million.

• Gross profit reached a record $137.3 million, up 3.4% year-over-year, with gross margin expanding by 40 basis points to 26.5%.

• Net income rose 20.6% to $59.1 million, with diluted EPS up 20.8% to $2.15, aided by the absence of prior year pension settlement and lower acquisition costs.

• Announced a definitive agreement to acquire Bachan’s, Inc., a fast-growing Japanese-American barbecue sauce brand, for $400 million in cash, expected to be accretive to growth and margins.

• Cash dividend increased 5.3% to $1.00 per share; $20.1 million in share repurchases; company remains debt-free with over $201 million in cash.

Financial highlights

• Foodservice segment net sales grew 5.2% to $240.4 million, while Retail segment net sales declined 1.1% to $277.5 million; adjusted Foodservice net sales up 1.6%.

• Adjusted gross margin improved 80 basis points to 26.9% due to cost savings and inflationary pricing.

• SG&A expenses increased 5.8% to $60.4 million, mainly from higher marketing spend and new product launches.

• Operating income for the quarter was $75.2 million, down 0.6% due to increased SG&A and $1.7 million in restructuring/impairment charges; adjusted operating income was $76.9 million.

• Temporary supply agreement (TSA) with Winland Foods added $8.2 million in non-core sales, expected to conclude by March 2026.

Outlook and guidance

• Retail sales expected to benefit from licensing programs, innovation, and some sales pulled forward due to an earlier Easter holiday.

• Foodservice segment projected to see continued growth from national chain restaurant accounts, supported by stable consumer spending and lower gas prices.

• Modest input cost inflation anticipated, to be offset by contractual pricing and cost savings initiatives.

• The Bachan’s acquisition will be funded with cash and additional financing; details to be provided in a future filing.