Marzetti Co (MZTI) · Nov 3, 2026 · Earnings
Miss — Adjusted diluted EPS $1.14 vs ~$1.37 consensus
Marzetti earnings missed expectations as cyclospora, freight and Atlanta startup costs pressured margins despite Bachan’s sales growth.
Marzetti is integrating the Bachan’s acquisition while expanding Atlanta production capacity and trying to restore growth across its retail and foodservice brands; the prior fiscal-year plan already relied on Bachan’s and new products to drive retail growth while inflationary pricing and cost savings protected margins.
The quarter was materially below the earnings bar. Adjusted diluted EPS was $1.14 versus a published consensus of roughly $1.37, while sales were $481.5 million against roughly $484 million of consensus. The miss is not just accounting noise: adjusted operating income fell 27.4% year over year, and management tied the decline to weaker volumes, higher freight and diesel costs, and Atlanta commissioning expenses.
| Metric | Q1 FY27 | Q1 FY26 | Consensus |
|---|---|---|---|
| Net sales (Financial Highlights) | $481.5M (-2.4%) | $493.5M | ~$484.0M |
| Adjusted diluted EPS (Adjusted EPS reconciliation) | $1.14 (-34.5%) | $1.74 | ~$1.37 |
| Gross margin (Non-GAAP reconciliation) | 23.0% (-160 bps) | 24.6% | |
| Retail sales (Segment results) | $252.7M (+2.0%) | $247.8M | |
| Foodservice sales (Segment results) | $228.8M (-6.9%) | $245.6M | |
| Cash dividend per share (Financial Highlights) | $1.00 | $0.95 |
Bachan’s is producing real growth, but not enough to offset the core business pressure. The acquired brand added $17.8 million of retail sales and scanner sales rose 10.7%, helping retail revenue grow 2.0%. But the cyclospora outbreak reduced estimated retail sales by about 4%, while foodservice fell 2.6% excluding the discontinued temporary supply agreement. 〔0〕
The bigger issue is operating leverage moving the wrong way. Even after excluding Bachan’s amortization and last year’s restructuring charge, adjusted EPS fell from $1.74 to $1.14. Gross margin compressed as lower production volumes, freight inflation and Atlanta startup costs hit simultaneously, while SG&A rose $10.9 million partly because the acquisition added ongoing expenses. Management says it expects pricing and cost savings to offset most or all of the cost inflation, but this quarter shows that protection is not yet reaching earnings.
The filing preserves the strategic growth story but weakens the near-term execution story. Bachan’s, Texas Roadhouse rolls and new products are gaining traction, and the outbreak reportedly moderated in recent weeks. However, that recovery is not yet demonstrated in the consolidated numbers: reported operating income dropped 30.1%, foodservice volume declined 7.6%, and the company supplied no new quantified earnings outlook to reset the disappointing quarter.
Bottom line: Marzetti’s acquisition is growing sales, but the first quarter shows the business is struggling to convert that growth into profit. The outbreak may prove temporary, yet the size of the adjusted EPS and margin deterioration makes this a clear earnings miss, not a routine integration wobble.
November 3 earnings call; cyclospora recovery update
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