The Middleby Corporation (MIDD) Q4 2023 earnings summary

Executive summary

• Q4 sales fell 2.2% YoY to $1,008.6M; adjusted EBITDA reached a record $235.2M, up 0.7%, and adjusted diluted EPS rose 3% to $2.65.

• FY adjusted EBITDA reached a record $900.4M, up 6%; FY sales were $4.037B versus $4.033B in 2022.

• FY operating cash flow reached a record $628.8M; net leverage was below 2.5x entering 2024.

• Commercial Foodservice and Food Processing grew adjusted EBITDA margins, while Residential Kitchen remained pressured by inventory and housing-market conditions.

Financial highlights

• Q4 gross profit was $386.8M, or 38.4% of sales, versus $390.1M, or 37.8%, in Q4 2022.

• Q4 adjusted operating income was $192.7M, up 2.4%; adjusted net earnings were $134.9M, up 1.3%.

• Q4 GAAP net earnings were $76.3M versus $133.2M; diluted EPS was $1.42 versus $2.45, including $78.1M of impairment charges.

• FY adjusted net earnings were $520.6M and adjusted diluted EPS was $9.70, versus $493.0M and $9.10 in 2022.

• Q4 operating cash flow was $255.7M versus $159.1M; FY operating cash flow was $628.8M versus $332.6M.

Outlook and guidance

• Commercial Foodservice targets a 30% EBITDA margin within two years; Residential Kitchen targets 25% in three to four years, partly contingent on market improvement.

• Food Processing targets a 25% EBITDA margin.

• Total leverage could fall below 2x by year-end 2024, assuming no acquisitions, investments or stock buybacks.

• Residential Kitchen planned a record number of product launches at the February 27–29 Kitchen & Bath Industry Show.