The Marzetti Company reported adjusted earnings per share of $1.46 for its fiscal fourth quarter ended June 30, exceeding Wall Street’s $1.40 consensus by $0.06. Reported diluted EPS rose 49.2% to $1.76, while net sales declined 2.2% year-over-year to $465 million, missing the $479 million estimate by $14 million.
Gross profit increased 7.4% to $114 million, with reported gross margin expanding by 220 basis points and adjusted gross margin up 160 basis points. Operating income rose 48.2% on a reported basis and 17.5% on an adjusted basis. Selling, general and administrative expenses increased primarily due to acquisition-related costs, though adjusted SG&A excluding these costs rose by just $100,000.
For the full fiscal year 2026, Marzetti achieved record net sales, gross profit and operating income, marking the fourth consecutive year of record net sales and gross profit and the third straight year of record operating income. Operating cash flow increased 8.5% to $283.8 million, while capital expenditures totaled $77.7 million. The company maintained its 63-year streak of annual dividend increases, paying $108.8 million in dividends for the year at a yield of 3.46%.
Management guided for mid-single-digit revenue growth in fiscal 2027, with retail sales expected to rise in the mid-single digits and foodservice sales in the low-to-mid single digits. Gross margin is projected to expand by about 100 basis points, with roughly half attributed to Bachan’s accretion and synergies and the remainder to commodity risk management and cost savings. SG&A growth is forecast at 10% to 15%, driven by the Bachan’s acquisition, while the tax rate is expected to rise to about 23%.
A Cyclospora outbreak is anticipated to reduce net sales by approximately 250 basis points in the first quarter of fiscal 2027, with potential flat sales, no gross margin growth and a 15% decline in operating income. Management noted the impact is expected to follow a pattern similar to a 2018 outbreak, with recovery taking several months.
