The Marzetti Company Reports First Quarter Sales and Earnings

David A. Ciesinski, CEO of The Marzetti Company

“The cyclospora outbreak had a significant impact on this quarter’s top and bottom-line results. The outbreak resulted in lower sales for both our Retail and Foodservice segments, with the impact on Retail segment net sales more notable, accounting for an estimated year-over-year net sales decline of approximately 4% due to lower demand for our Retail dressing, dip and crouton products. On a positive note, other areas of our business continued to perform well and the cyclospora impact has moderated in recent weeks.”

David A. Ciesinski, CEO of The Marzetti Company

“The newly acquired Bachan’s brand added $17.8 million in incremental sales to our Retail segment. Retail scanner data sourced from Circana for the quarter ended September shows continued momentum for the Bachan’s brand, with sales up 10.7% as the brand continues to gain share in the barbecue sauce category. Consumer demand for our Texas Roadhouse(®) dinner rolls also remained strong, with sales up 21.3% per Circana. In the Foodservice segment, with the cyclospora outbreak a headwind to growth, the segment’s reported net sales declined 6.9% and Adjusted Foodservice Net Sales, which exclude the non-core TSA sales, decreased 2.6%.”

David A. Ciesinski, CEO of The Marzetti Company

“The decrease in consolidated operating income was driven by the lower sales and associated impact of lower production volumes on our plant operations; significantly higher diesel and freight costs; and commissioning costs for the addition of new production capacity at our sauce and dressing facility in Atlanta, Georgia.”

David A. Ciesinski, CEO of The Marzetti Company

“Looking ahead to our fiscal second quarter and the remainder of the fiscal year, we anticipate Retail segment sales will continue to benefit from incremental sales attributed to the Bachan’s acquisition in addition to contributions from new items that we recently launched or have planned for introduction later this year. In the Foodservice segment, we expect sales to remain supported by select quick-service restaurant customers in our mix of national chain restaurant accounts. We continue to anticipate a moderate level of commodity cost inflation, in addition to significantly higher diesel and freight costs, most or all of which we expect to mitigate through inflationary pricing and our cost savings programs as we remain focused on margin improvement.”