Investopedia: Waiting To Warm Up To Middleby

Foodservice equipment manufacturer Middleby (Nasdaq:MIDD) is following a time-tested strategy - bring innovation and consolidation to a fragmented and, in some ways, stagnant industry. At the same time, certain realities still apply to the company and the stock. Foremost among them is the fact that the capital equipment market for the foodservice industry is still challenging, and Middleby still competes against well-known and well-heeled competitors. 


First Quarter Results Look Warm, Not Hot 
Middleby's first quarter was not necessarily bad, but institutional investors will likely focus on the company's shortfall in revenue. While the company did report revenue growth of nearly 14%, the company still came in below the lowest published analyst estimate. Organic sales were up more than 7% for the period, with the commercial foodservice unit up nearly 9% and the more volatile food processing unit down about 3%.

Even if revenue was disappointing, the company did well on margins. Gross margin was nearly flat, though the company did mention pressures from higher material costs. Operating income rose 19%, and the company saw about 80 basis points of margin expansion, as flat general/administrative expenses helped offset higher sales expenses.


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