The Marzetti Company Reports Third Quarter Sales and Earnings

About this update from The Marzetti Company

WESTERVILLE, Ohio, May 04, 2026 --( BUSINESS WIRE )--The Marzetti Company (Nasdaq: MZTI) reported results today for the company’s fiscal third quarter ended March 31, 2026. Summary CEO David A. Ciesinski commented, "We were pleased to report record-high gross profit in the quarter despite the decline in net sales. In our Retail segment, our category-leading frozen bread brands performed well as sales of our New York Bakery TM frozen garlic bread products continued to grow and increase market share while sales of our Sister Schubert’s ® dinner rolls benefited from the pull-forward of demand due to the earlier Easter holiday. These sales gains were more than offset by the impacts of category softness and reduced sales into the club channel. In the Foodservice segment, reported net sales increased 1.5% while Adjusted Foodservice Net Sales, which exclude non-core TSA sales, grew 1.8%, led by higher demand from several of our core national chain restaurant accounts." "Looking ahead to the final quarter of our fiscal year, in addition to incremental sales attributed to the Bachan’s acquisition, we expect Retail sales will benefit from new product introductions including Marzetti ® Protein Ranch dressing and veggie dips, a new Olive Garden ® Zesty Italian dressing flavor, and the addition of a larger-sized bottle for the popular Chick-fil-A ® Avocado Lime Ranch dressing. In the Foodservice segment, we anticipate continued growth from select customers in our mix of national chain restaurant accounts." Third Quarter Results Consolidated net sales decreased 1.0% to $453.4 million versus $457.8 million last year. Excluding non-core sales attributed to the TSA with Winland Foods, Inc., Adjusted Consolidated Net Sales decreased 0.9% to $451.8 million. Retail segment net sales declined 3.2% to $233.8 million driven by a 5.6% decrease in the segment’s sales volume, measured in pounds shipped, partially offset by some inflationary pricing. The non-core TSA sales, which totaled $1.5 million in the current-year quarter and $2.1 million last year, are accounted for as Foodservice segment sales and resulted from our acquisition of the Winland Foods sauce and dressing production facility located in Atlanta, Georgia. The TSA sales commenced in March 2025 and concluded during our fiscal third quarter ended March 31, 2026. Excluding the non-core TSA sales, Adjusted Foodservice Net Sales improved 1.8% to $218.1 million while the segment’s sales volumes, measured in pounds shipped, increased 0.8%. Consolidated gross profit increased $1.3 million, or 1.2%, to a third quarter record $107.2 million. The higher gross profit reflects the benefit of our ongoing cost savings programs. Adjusted Gross Margin, which excludes all non-core TSA sales as those sales did not contribute meaningfully to gross profit, increased approximately 50 basis points to 23.7%. SG&A expenses increased $5.4 million to $61.4 million. SG&A expenses include $3.5 million and $1.7 million in acquisition-related costs in the current- and prior-year quarters, respectively. The higher SG&A costs also reflect increased investments in personnel and IT to enable future growth of the business. Income of $0.8 million reported in the Restructuring, Impairment and Other line item represents insurance claim proceeds related to the manufacturing equipment impairment charge that we recognized in this year’s fiscal second quarter. Consolidated operating income declined $3.3 million to $46.6 million. Excluding all acquisition-related SG&A costs and the $0.8 million in insurance claim proceeds, Adjusted Operating Income declined $2.3 million. This decrease reflects the impact of the higher SG&A expenses as partially offset by the increase in gross profit. Net income declined $4.1 million to $37.1 million, or $1.35 per diluted share, versus $1.49 per diluted share last year. The acquisition-related SG&A costs reduced net income by $0.10 per diluted share while the insurance claim proceeds increased net income by $0.02 per diluted share. In the prior-year quarter, acquisition-related costs in SG&A reduced net income by $0.05 per diluted share. Fiscal Year-to-Date Results For the nine months ended March 31, 2026, consolidated net sales increased 2.2% to $1,464.8 million compared to $1,433.7 million a year ago. Excluding all non-core sales attributed to the TSA with Winland Foods, Inc., Adjusted Consolidated Net Sales increased 0.9% to $1,444.4 million. Reported operating income declined 0.2% to $181.0 million while Adjusted Operating Income, which excludes all acquisition-related SG&A costs and Restructuring, Impairment and Other items, increased 1.0% to $186.6 million. Net income for the nine-month period totaled $143.3 million, or $5.21 per diluted share, versus the prior-year amount of $134.8 million, or $4.89 per diluted share. In the current-year period, acquisition-related costs in SG&A reduced net income by $2.7 million, or $0.10 per diluted share, while the net impact of Restructuring, Impairment and Other items reduced net income by $1.6 million, or $0.06 per diluted share. In the prior-year period, a noncash pension settlement charge resulting from our decision to terminate the company’s legacy pension plans reduced net income by $10.8 million, or $0.39 per diluted share, and acquisition-related SG&A expenses reduced net income by $2.6 million, or $0.09 per diluted share. Conference Call on the Web The company’s third quarter conference call is scheduled for this morning, May 4, at 10:00 a.m. ET. Access to a live webcast and subsequent replay of the call is available through a link on the company’s website at investors.marzetticompany.com. About The Marzetti Company The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels. Forward-Looking Statements We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). This news release contains various "forward-looking statements" within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "believe," "intend," "plan," "expect," "hope" or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations. Reconciliation of GAAP to non-GAAP Financial Measures The Marzetti Company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). However, from time to time, the corporation may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Gross Margin and Adjusted Operating Income. Management considers such non-GAAP financial measures to provide useful supplemental information to investors in facilitating year-over-year comparisons by removing non-recurring items or other items that management believes do not directly reflect the underlying operations. Management uses these non-GAAP measures in the preparation of our annual operating plan and for our monthly analysis of operating results. Reconciliations of the non-GAAP measures to the most comparable GAAP financial measures are provided below. The corporation’s definitions of these non-GAAP measures may differ from similarly titled measures used by other companies. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures that exclude non-core sales and cost of sales attributed to a temporary supply agreement ("TSA") made in connection with our February 2025 acquisition of Winland’s Atlanta-based sauce and dressing production facility. The TSA sales are included in the reported net sales for our Foodservice segment and did not contribute meaningfully to gross profit. The TSA sales commenced in March 2025 and concluded during the quarter ended March 31, 2026. The following tables present a reconciliation between net sales, cost of sales, gross profit and gross margin as reported in accordance with GAAP and Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin for the three and nine month periods ended March 31, 2026 and 2025. Adjusted Operating Income is a non-GAAP financial measure that excludes certain items affecting comparability, which can impact the analysis of our underlying core business performance and trends. The following table presents a reconciliation between operating income as reported in accordance with GAAP and Adjusted Operating Income for the three and nine month periods ended March 31, 2026 and 2025. The $3.5 million adjustment for the three and nine months ended March 31, 2026 reflects incremental SG&A expenses attributed to the Bachan’s acquisition. The $0.8 million adjustment for the three months ended March 31, 2026 reflects a recovery through an insurance claim related to a previously recognized asset impairment charge. The $2.0 million adjustment for the nine months ended March 31, 2026 consists of $1.4 million in charges related to the impairment of manufacturing equipment, the $0.8 million insurance recovery, and $1.4 million attributed to the restructuring and impairment charges resulting from the closure of our sauce and dressing production facility in Milpitas, California. The prior-year adjustments of $1.7 million and $3.3 million for the three and nine months ended March 31, 2025, respectively, reflect incremental SG&A expenses attributed to the Atlanta production facility acquisition.   View source version on businesswire.com: https://www.businesswire.com/news/home/20260501568227/en/ Contacts FOR FURTHER INFORMATION: Dale N. Ganobsik Vice President, Corporate Finance and Investor Relations The Marzetti Company Phone: 614/224-7141 Email: [email protected]

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