The Marzetti Company reported fiscal fourth-quarter 2026 results on Tuesday, highlighting record profitability despite a revenue miss. Consolidated net sales declined 2.2% year-over-year to $465.0 million, falling short of the $479.0 million consensus estimate by $13.9 million, or 2.9%. Excluding non-core sales from a temporary supply agreement with Winland Foods, adjusted net sales rose 0.4%.
Gross profit reached a record $114.0 million, lifting the reported gross margin by 220 basis points to 24.5%, while adjusted gross margin expanded by 160 basis points to the same level. Operating income surged 48.2% to $57.7 million, and diluted earnings per share climbed 49.2% to $1.76, surpassing the $1.40 consensus by $0.06. Adjusted EPS increased 9.0% to $1.46.
For the full fiscal year 2026, net sales grew 1.1% to $1.89 billion, while operating income rose 8.3% to $203.9 million. Operating cash flow reached a record $283.8 million, up 8.5% from the prior year. Shareholder returns totaled $145.1 million, including $108.8 million in dividends and $36.3 million in share repurchases.
The company’s retail segment net sales rose 0.9% to $243.6 million, though volume declined 1.7%. The foodservice segment saw a 5.3% decline to $221.4 million, though adjusted for the temporary supply agreement, the decline narrowed to 0.1%. Bachan’s Japanese Barbecue Sauce, acquired in May 2026, contributed $15.4 million in net sales during its two months of ownership in the quarter.
Margins continued to benefit from cost management and operational efficiencies, marking the 12th consecutive quarter of adjusted gross margin expansion. Management projected further gross margin expansion of approximately 100 basis points in fiscal 2027, with half attributed to Bachan’s accretion and synergies and the remainder to commodity risk management and cost savings. SG&A expenses are expected to rise 10% to 15% in FY27 due to the Bachan’s integration.
Ahead of the earnings release, Marzetti’s shares traded at $117.50, up 1.5% from the prior close, with a market capitalization of $3.18 billion. The stock remains roughly 37% below its 52-week high of $186.95. The company also increased its dividend for the 63rd consecutive year, maintaining a 3.46% yield.
