The Marzetti Company (MZTI) reported a record fourth-quarter gross margin of 24.5% in FY26, expanding 220 basis points year-over-year, even as consolidated net sales declined 2.2% to $465.0 million. Adjusted consolidated net sales, excluding a temporary supply agreement, rose 0.4% to $477.2 million.
Gross profit reached $114.0 million, while operating income surged 48.2% to a record $57.7 million. Diluted earnings per share increased 49.2% to $1.76, with adjusted diluted EPS of $1.46 beating the consensus estimate of $1.40. Net sales fell short of the $479.0 million forecast by $13.92 million, a 2.91% miss.
For the full fiscal year, Marzetti reported a fourth consecutive year of record net sales and gross profit, with consolidated net sales up 1.1% and adjusted net sales up 0.8%. Operating income grew 8.3%, while operating cash flow reached a record $283.8 million, up 8.5% year-over-year. Shareholder returns totaled $145.1 million, including $108.8 million in dividends and $36.3 million in share repurchases.
The retail segment’s net sales grew 0.9% to $243.6 million, though volume declined 1.7%. Bachan’s, acquired in May 2026, contributed $15.4 million in net sales during its two months of ownership. The foodservice segment’s net sales fell 5.3% to $221.4 million, though adjusted for temporary supply agreements, the decline narrowed to 0.1%.
Gross margin expansion was driven by cost management and the inclusion of Bachan’s, which contributed to a 100-basis-point margin target for FY27. However, a Cyclospora outbreak is expected to reduce Q1 FY27 sales by roughly 250 basis points and lower operating income by about 15%, based on historical recovery patterns.
Marzetti’s stock traded at $117.50, up 1.5% from the prior close, and remains 37% below its 52-week high of $186.95. The company maintained a 3.46% dividend yield and marked its 63rd consecutive year of dividend increases. Return on equity stood at 17% as of the quarter’s end.
