10-Q · May 4, 2026
The Marzetti Company reported Q3 2026 earnings with a revenue decrease to $453.4 million and EPS of $1.35, falling short of consensus estimates. The Retail segment experienced a significant decline in sales due to lower…
Earnings analysis · 10-K
MZTI earnings analysis
Filed August 25, 2026 · Our reading of the company's report
The latest report
Marzetti delivered modest top-line growth with record fiscal 2026 sales, continued three-year margin expansion, stronger Foodservice profitability, and higher EPS. The Bachan’s acquisition broadens the sauce-category…
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Marzetti delivered modest top-line growth with record fiscal 2026 sales, continued three-year margin expansion, stronger Foodservice profitability, and higher EPS. The Bachan’s acquisition broadens the sauce-category roadmap and should add distribution and product-development opportunities, but it introduced $200 million of variable-rate debt and substantial goodwill and intangible-asset exposure. Retail volume and profit declined, and reported EPS and operating income benefited from unusual items, keeping the overall outlook neutral despite improved operating cash flow and a strong dividend record.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $6.98
What stood out
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Record sales with acquisition and pricing support
Fiscal 2026 net sales reached a record $1,929.8 million, up 1.1% from $1,909.1 million in 2025 and $1,871.8 million in 2024. Growth included $15.4 million from Bachan’s and $17.0 million of net pricing, partly offset by a $17.9 million decline in core volume and mix.
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Three-year margin expansion
Gross margin expanded to 24.7% in 2026 from 23.9% in 2025 and 23.1% in 2024, while operating margin increased to 12.4% from 11.5% and 10.7%, respectively. Reported operating income included an $18.5 million gain on the sale of the Milpitas property.
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EPS growth aided by unusual items
Diluted EPS increased to $6.98 in 2026 from $6.07 in 2025 and $5.76 in 2024. However, the 2026 EPS benefit included $0.60 from restructuring and other items, while Bachan’s transaction costs and intangible amortization reduced EPS by $0.41 and $0.05, respectively.
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Foodservice drove segment profitability
Foodservice was the primary operating-growth driver: sales increased 2.4% to $927.1 million and operating income rose 17.7% to $131.3 million, lifting segment margin from 12.3% to 14.2%. Foodservice volume increased 0.9%, compared with a 1.9% decline in Retail volume.
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Strategic sauce-category expansion
The company acquired Bachan’s on May 1, 2026 for $399.3 million net of cash acquired, adding a rapidly growing Japanese Barbecue Sauce brand and $277.7 million of Retail-segment goodwill. Management expects distribution, supply-chain capabilities, culinary expertise, and product innovation to support future growth.
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Strong operating cash and dividend record
Cash provided by operating activities increased 8.5% to $283.8 million in 2026 from $261.5 million in 2025 and $251.6 million in 2024. Capital allocation included $108.8 million of dividends, $36.3 million of treasury-stock purchases, and a regular dividend increase to $3.95 per share, marking 63 consecutive years of increases.
What to watch
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Bachan’s integration and leverage risk
Bachan’s creates materially higher integration, execution, and balance-sheet risk: the acquisition cost $399.3 million, was partly financed with a $200.0 million term loan, and generated $127.0 million of identifiable intangibles plus $277.7 million of goodwill. Bachan’s represented 27% of consolidated assets, while its sales contributed less than 1% of fiscal 2026 consolidated net sales; the company excluded Bachan’s from its internal-control assessment because of the acquisition’s proximity to year-end.
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Retail volume and profit pressure
Retail momentum weakened despite Bachan’s contribution: Retail sales declined 0.1% to $1,002.8 million, operating income fell 3.8% to $203.7 million, and volume declined 1.9%; excluding Bachan’s, Retail volume declined 3.2%. The filing also identifies reduced club-channel sales as an unfavorable factor.
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Variable-rate debt and fixed commitments
The new term loan bears interest at a variable rate tied to SOFR or an alternate base rate, with $200.0 million outstanding at June 30, 2026 and $10.0 million scheduled to mature in each of 2027, 2028, 2029, and 2030. The company also has a fixed cash commitment of approximately $159 million for a 15-year Columbus, Ohio warehouse lease beginning in fiscal 2027, constraining financial flexibility after the acquisition.
Management's outlook
No numeric fiscal 2027 revenue or EPS guidance was provided. Management expects sales to benefit from Bachan’s, new products, licensing, and select quick-service restaurant customers; moderate input-cost inflation is expected to be offset through pricing and cost savings.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.