The Marzetti Company

02/03/2026 | Press release | Distributed by Public on 02/03/2026 06:49

Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, references to "year" pertain to our fiscal year; for example, 2026 refers to fiscal 2026, which is the period from July 1, 2025 to June 30, 2026.
The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto, all included elsewhere in this report, and our 2025 Annual Report on Form 10-K.
We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). We have also presented Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Gross Margin and Adjusted Operating Income, each of which is considered a non-GAAP financial measure, to supplement the financial information included in this report. Refer to the "Reconciliation of GAAP to non-GAAP Financial Measures" section below for additional information and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
The forward-looking statements in this section and other parts of this report involve risks, uncertainties and other factors, including statements regarding our plans, objectives, goals, strategies, and financial performance. Our actual results could differ materially from the results anticipated in these forward-looking statements due to these factors. For more information, see the section below entitled "Forward-Looking Statements."
OVERVIEW
Business Overview
The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Our financial results are presented as two reportable segments: Retail and Foodservice. Costs that are directly attributable to either Retail or Foodservice are charged directly to the appropriate segment. Costs that are deemed to be indirect, excluding corporate expenses and other unusual significant transactions, are allocated to the two reportable segments using a reasonable methodology that is consistently applied.
Over 95% of our products are sold in the United States. Foreign operations and export sales have not been significant in the past and are not expected to be significant in the future based upon existing operations. We do not have any fixed assets located outside of the United States.
Our business has the potential to achieve future growth in sales and profitability due to attributes such as:
•leading Retail market positions in several product categories with a high-quality perception;
•recognized innovation in Retail products;
•a broad customer base in both Retail and Foodservice accounts;
•well-regarded culinary expertise among Foodservice customers;
•long-standing Foodservice customer relationships that help to support strategic licensing opportunities in Retail;
•demonstrated success with strategic licensing programs in Retail through both new and established relationships in the foodservice industry;
•recognized leadership in Foodservice product development;
•experience in integrating complementary business acquisitions; and
•historically strong cash flow generation that supports growth opportunities.
Our goal is to grow both Retail and Foodservice segment sales over time by:
•introducing new products and expanding distribution;
•leveraging the strength of our Retail brands to increase current product sales;
•expanding Retail growth through strategic licensing agreements;
•continuing to rely upon the strength of our reputation in Foodservice product development and quality; and
•acquiring complementary businesses.
With respect to long-term growth, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, production capacity, IT platforms and initiatives to support and strengthen our operations. Recent examples of resulting strategic actions include:
•the acquisition of a sauce and dressing production facility in the Atlanta, Georgia area in February 2025; and
•the closure of our sauce and dressing production facility in Milpitas, California during the quarter ended September 30, 2025.
RESULTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands,
except per share data)
Three Months Ended
December 31, 		Six Months Ended
December 31,
2025 2024 Change 2025 2024 Change
Net Sales $ 517,953 $ 509,301 $ 8,652 1.7 % $ 1,011,425 $ 975,859 $ 35,566 3.6 %
Cost of Sales 380,693 376,533 4,160 1.1 % 755,346 732,267 23,079 3.2 %
Gross Profit 137,260 132,768 4,492 3.4 % 256,079 243,592 12,487 5.1 %
Gross Margin 26.5 % 26.1 % 25.3 % 25.0 %
Selling, General and Administrative Expenses 60,409 57,107 3,302 5.8 % 118,825 112,067 6,758 6.0 %
Restructuring and Impairment Charges 1,667 - 1,667 N/M 2,810 - 2,810 N/M
Operating Income 75,184 75,661 (477) (0.6) % 134,444 131,525 2,919 2.2 %
Operating Margin 14.5 % 14.9 % 13.3 % 13.5 %
Pension Settlement Charge - (13,968) 13,968 100.0 % - (13,968) 13,968 100.0 %
Other, Net 1,158 1,541 (383) (24.9) % 2,687 3,560 (873) (24.5) %
Income Before Income Taxes 76,342 63,234 13,108 20.7 % 137,131 121,117 16,014 13.2 %
Taxes Based on Income 17,263 14,241 3,022 21.2 % 30,870 27,423 3,447 12.6 %
Effective Tax Rate 22.6 % 22.5 % 22.5 % 22.6 %
Net Income $ 59,079 $ 48,993 $ 10,086 20.6 % $ 106,261 $ 93,694 $ 12,567 13.4 %
Diluted Net Income Per Common Share $ 2.15 $ 1.78 $ 0.37 20.8 % $ 3.86 $ 3.40 $ 0.46 13.5 %
Net Sales
Consolidated net sales for the three months ended December 31, 2025 increased 1.7% to $518.0 million versus $509.3 million last year, reflecting higher net sales for the Foodservice segment, as partially offset by lower net sales for the Retail segment. Net sales for both segments were unfavorably impacted by core volume declines and favorably impacted by inflationary pricing. Foodservice segment net sales benefited from incremental sales attributed to a temporary supply agreement ("TSA") resulting from our acquisition of a sauce and dressing production facility located in Atlanta, Georgia ("Atlanta plant"). The acquisition was completed in February 2025. The TSA sales commenced in March 2025 and are expected to conclude during the quarter ending March 31, 2026. Breaking down the 1.7% increase in consolidated net sales as summarized in the table below, lower core volumes and product mix accounted for a decrease of approximately 130 basis points, the net pricing impact accounted for an increase of approximately 140 basis points, and incremental sales attributed to the TSA added approximately 160 basis points. Excluding all sales attributed to the TSA, Adjusted Consolidated Net Sales for the three months ended December 31, 2025 increased 0.1% to $509.8 million.
Consolidated net sales for the six months ended December 31, 2025 increased 3.6% to $1,011.4 million versus $975.9 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven by a more favorable product mix in our Retail segment, inflationary pricing in both segments and incremental Foodservice sales attributed to the TSA. Breaking down the 3.6% increase in consolidated net sales as summarized in the table below, changes in core volumes and product mix accounted for an increase of approximately 30 basis points, the net pricing impact accounted for an increase of approximately 140 basis points, and incremental sales attributed to the TSA added approximately 190 basis points. Excluding all sales attributed to the TSA, Adjusted Consolidated Net Sales for the six months ended December 31, 2025 increased 1.7% to $992.5 million.
Breakdown of % Change in Consolidated Net Sales Three Months Ended
December 31, 2025 		Six Months Ended
December 31, 2025
Change in Core Sales Volume / Mix $ (6,590) (1.3) % $ 3,154 0.3 %
Net Pricing Impact 7,057 1.4 13,536 1.4
Incremental Sales for Temporary Supply Agreement (TSA) 8,185 1.6 18,876 1.9
Total Change in Net Sales $ 8,652 1.7 % $ 35,566 3.6 %
Consolidated sales volumes, measured in pounds shipped, increased 0.3% for the three months ended December 31, 2025. Excluding the impact of all sales attributed to the TSA, adjusted sales volumes decreased 1.5%.
Consolidated sales volumes, measured in pounds shipped, increased 2.1% for the six months ended December 31, 2025. Excluding the impact of all sales attributed to the TSA, adjusted sales volumes were flat.
See discussion of net sales by segment following the discussion of "Earnings Per Share" below.
Gross Profit
Consolidated gross profit for the three months ended December 31, 2025 increased $4.5 million to a second quarter record $137.3 million. Consolidated gross profit benefited from our cost savings programs while inflationary pricing served to offset cost inflation. Reported gross margin improved 40 basis points while Adjusted Gross Margin increased 80 basis points.
Consolidated gross profit for the six months ended December 31, 2025 increased $12.5 million to $256.1 million. Consolidated gross profit benefited from our cost savings programs. Reported gross margin improved 30 basis points while Adjusted Gross Margin increased 80 basis points.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses for the three months ended December 31, 2025 increased 5.8% to $60.4 million compared to $57.1 million in the prior-year period. This increase was primarily driven by higher marketing costs as we invested to support our Retail brands. SG&A expenses in the prior year included $1.6 million in incremental expenditures attributed to the Atlanta plant acquisition.
SG&A expenses for the six months ended December 31, 2025 increased 6.0% to $118.8 million compared to $112.1 million in the prior year. This increase primarily reflects higher marketing costs as we invested to support the continued growth of our Retail brands, in addition to increased expenditures for compensation and benefits.
Restructuring and Impairment Charges
In April 2025, we committed to a plan to close our sauce and dressing production facility in Milpitas, California as part of our ongoing strategic initiative to better optimize our manufacturing network. Production at the facility concluded in August 2025. In the three and six months ended December 31, 2025, we recorded restructuring and impairment charges of $0.3 million and $1.4 million, respectively, related to this closure. These charges consisted of one-time termination benefits and other closing costs. The operations of this facility were not classified as discontinued operations as the closure did not represent a strategic shift that would have a major effect on our operations or financial results.
During the three and six months ended December 31, 2025, we also recorded a noncash impairment charge of $1.4 million related to manufacturing equipment. This charge was reflected in our Foodservice segment.
Operating Income
Operating income decreased $0.5 million to $75.2 million for the three months ended December 31, 2025. The lower level of operating income reflects the increased SG&A expenses and the impact of the $1.7 million in restructuring and impairment charges, as partially offset by the higher gross profit. Excluding the current-year restructuring and impairment charges and the prior-year acquisition costs, Adjusted Operating Income decreased $0.4 million to $76.9 million.
Operating income grew $2.9 million to $134.4 million for the six months ended December 31, 2025 due to the increase in gross profit, as partially offset by the higher SG&A expenses and the impact of the $2.8 million in restructuring and impairment charges. Excluding the current-year restructuring and impairment charges and the prior-year acquisition costs, Adjusted Operating Income increased $4.1 million to $137.3 million.
See discussion of operating results by segment following the discussion of "Earnings Per Share" below.
Pension Settlement Charge
Prior to November 30, 2024, we sponsored multiple defined benefit pension plans that covered certain former employees under collective bargaining contracts related to closed or sold operations. All these plans were previously frozen. In August 2024, our Board of Directors approved the merger of all five pension plans and the termination of the resulting merged plan. The merged plan was terminated effective November 30, 2024. Lump sum distributions and annuity purchases from a highly rated insurance company were completed in December 2024. As a result of the pension termination, we incurred a one-time noncash settlement charge of $14.0 million for the three and six months ended December 31, 2024.
Taxes Based on Income
Our effective tax rate was 22.5% and 22.6% for the six months ended December 31, 2025 and 2024, respectively. For the six months ended December 31, 2025 and 2024, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
Six Months Ended
December 31,
2025 2024
Statutory rate 21.0 % 21.0 %
State and local income taxes 1.9 1.4
Net windfall tax benefits - stock-based compensation (0.2) (0.1)
Other (0.2) 0.3
Effective rate 22.5 % 22.6 %
We include the tax consequences related to stock-based compensation within the computation of income tax expense. We may experience increased volatility to our income tax expense and resulting net income dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vestings of restricted stock awards, restricted stock units and performance units. For the six months ended December 31, 2025 and 2024, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by 0.2% and 0.1%, respectively.
Earnings Per Share
As influenced by the factors discussed above, diluted net income per share for the second quarter of 2026 totaled $2.15, as compared to $1.78 per diluted share in the prior year. For the three months ended December 31, 2025, restructuring and impairment charges reduced diluted earnings per share by $0.05. For the three months ended December 31, 2024, the pension settlement charge reduced diluted earnings per share by $0.39 and costs related to the planned Atlanta plant acquisition reduced diluted earnings per share by $0.05.
For the six months ended December 31, 2025, diluted net income per share totaled $3.86, as compared to $3.40 per diluted share in the prior year. For the six months ended December 31, 2025, restructuring and impairment charges reduced diluted earnings per share by $0.08. For the six months ended December 31, 2024, the pension settlement charge reduced diluted earnings per share by $0.39 and costs related to the planned Atlanta plant acquisition reduced diluted earnings per share by $0.05.
Diluted weighted average common shares outstanding have remained relatively stable for the current and prior-year periods ended December 31.
RESULTS OF OPERATIONS - SEGMENTS
Retail Segment
Three Months Ended
December 31, 		Six Months Ended
December 31,
(Dollars in thousands) 2025 2024 Change 2025 2024 Change
Net Sales $ 277,525 $ 280,752 $ (3,227) (1.1) % $ 525,370 $ 520,323 $ 5,047 1.0 %
Operating Income $ 62,758 $ 69,037 $ (6,279) (9.1) % $ 113,369 $ 125,212 $ (11,843) (9.5) %
Operating Margin 22.6 % 24.6 % 21.6 % 24.1 %
For the three months ended December 31, 2025, Retail segment net sales decreased 1.1% to $277.5 million from the prior-year total of $280.8 million. The decrease in Retail segment net sales reflected lower sales volumes partially offset by some inflationary pricing. Note that the 1.1% decrease in Retail segment net sales compares to strong prior-year growth of 6.3% and reflects softer demand during the timeframe of the U.S. government shutdown. Retail segment highlights include continued growth from our category-leading New York BakeryTMfrozen garlic bread products, including our recently introduced gluten-free Texas Toast, and expanding distribution for our licensed Texas Roadhouse®dinner rolls. Retail segment sales volumes, measured in pounds shipped, decreased 3.1%.
For the six months ended December 31, 2025, Retail segment net sales increased 1.0% to $525.4 million compared to the prior-year total of $520.3 million. Net sales for our category-leading New York BakeryTMfrozen garlic bread products, including our recently introduced gluten-free Texas Toast, were a strong contributor to the higher sales. Our Retail segment's licensing program also remained a source for growth in the quarter led by expanding distribution of our Texas Roadhouse®dinner rolls. The Chick-fil-A®sauce we began shipping into the club channel in late fiscal 2025 also delivered incremental sales. Retail segment sales volumes, measured in pounds shipped, decreased 0.2%.
For the three months ended December 31, 2025, Retail segment operating income decreased 9.1% to $62.8 million driven by the unfavorable impacts of the lower sales volumes, inflationary costs and higher marketing spend, as partially offset by our cost savings programs.
For the six months ended December 31, 2025, Retail segment operating income decreased 9.5% to $113.4 million due to inflationary costs and higher marketing spend, as partially offset by our cost savings programs.
Foodservice Segment
Three Months Ended
December 31, 		Six Months Ended
December 31,
(Dollars in thousands) 2025 2024 Change 2025 2024 Change
Net Sales $ 240,428 $ 228,549 $ 11,879 5.2 % $ 486,055 $ 455,536 $ 30,519 6.7 %
Operating Income $ 36,789 $ 30,324 $ 6,465 21.3 % $ 71,557 $ 54,633 $ 16,924 31.0 %
Operating Margin 15.3 % 13.3 % 14.7 % 12.0 %
For the three months ended December 31, 2025, Foodservice segment net sales grew 5.2% to $240.4 million compared to $228.5 million in the prior-year period driven by increased demand from several of our national chain restaurant account customers, increased sales for our branded Foodservice products, and the benefit of inflationary pricing. Excluding all sales attributed to the TSA resulting from the February 2025 Atlanta plant acquisition, Adjusted Foodservice Net Sales increased 1.6%. Foodservice segment sales volumes, measured in pounds shipped, increased 2.7%. Excluding all TSA sales, adjusted Foodservice sales volumes decreased 0.4%.
For the six months ended December 31, 2025, Foodservice segment net sales increased 6.7% to $486.1 million from the prior-year total of $455.5 million driven by increased demand from several of our national chain restaurant account customers and the benefit of inflationary pricing. Excluding all sales attributed to the TSA, Adjusted Foodservice Net Sales increased 2.6%. Foodservice segment sales volumes, measured in pounds shipped, increased 3.5%. Excluding all TSA sales, adjusted Foodservice sales volumes were flat.
For the three months ended December 31, 2025, Foodservice segment operating income increased 21.3% to $36.8 million driven by our cost savings programs, inflationary pricing, and the benefit of recent IT investments to support a more optimized trade spend system, as partially offset by some modest cost inflation.
For the six months ended December 31, 2025, Foodservice segment operating income increased 31.0% to $71.6 million driven by our cost savings programs, inflationary pricing, and a more favorable sales mix, as partially offset by some modest cost inflation.
Corporate Expenses
For the three months ended December 31, 2025, corporate expenses totaled $24.1 million, a slight increase from the prior-year period total of $23.7 million.
For the six months ended December 31, 2025, corporate expenses totaled $49.1 million, a slight increase from the prior-year period total of $48.3 million.
LOOKING FORWARD
Looking forward to the back half of our fiscal year, excluding any impact from the planned acquisition of Bachan's, Inc., we anticipate Retail segment sales will continue to benefit from our expanding licensing program led by Texas Roadhouse®dinner rolls in addition to investments in innovation and growth for our own brands. Note that with this year's earlier Easter holiday, we anticipate some Retail segment sales to be pulled forward into our fiscal third quarter. In the Foodservice segment, we expect sales to be supported by select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including U.S. economic performance and consumer behavior, may impact demand. With respect to our input costs, in aggregate we anticipate a modest level of inflation for the remainder of the fiscal year that we plan to offset through contractual pricing and our cost savings programs as we remain focused on continued margin improvement.
We will continue to periodically reassess our allocation of capital to ensure that we maintain adequate operating flexibility while providing appropriate levels of cash returns to our shareholders.
FINANCIAL CONDITION
Cash Flows
For the six months ended December 31, 2025, net cash provided by operating activities totaled $158.1 million, as compared to $127.5 million in the prior-year period. This increase was primarily due to the change in deferred income taxes resulting from tax timing benefits of the One Big Beautiful Bill Act, which was enacted in July 2025. Higher net income was offset by the impact of the prior-year noncash pension settlement charge.
Cash used in investing activities for the six months ended December 31, 2025 was $39.8 million, as compared to $32.7 million in the prior year. This increase primarily reflects a higher level of payments for property additions in the current year.
Cash used in financing activities for the six months ended December 31, 2025 of $78.2 million increased from the prior-year total of $55.2 million. This increase primarily reflects higher levels of share repurchases, as well as higher dividend payments.
Liquidity and Capital Resources
Under our unsecured revolving credit facility ("Facility"), we may borrow up to a maximum of $150 million at any one time. We had no borrowings outstanding under the Facility at December 31, 2025. At December 31, 2025, we had $2.6 million of standby letters of credit outstanding, which reduced the amount available for borrowing under the Facility. The Facility expires in March 2029, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to SOFR or an alternate base rate defined in the Facility. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
The Facility contains certain restrictive covenants, including limitations on liens, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage. At December 31, 2025, we were in compliance with all applicable provisions and covenants of this facility, and we exceeded the requirements of the financial covenants by substantial margins. At December 31, 2025, there were no events that would constitute a default under this facility.
We currently expect to remain in compliance with the Facility's covenants for the foreseeable future. However, a default under the Facility could accelerate the repayment of any then outstanding indebtedness and limit our access to $75 million of additional credit available under the Facility. Such an event could require a reduction in or curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise impact our ability to meet our obligations when due.
We believe that cash provided by operating activities and our existing balances in cash and equivalents, in addition to that available under the Facility, should be adequate to meet our core liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments. The planned acquisition of Bachan's, Inc. will be funded by a combination of cash on hand and additional financing, the details of which will be provided in a subsequent filing. If we were to borrow outside of the Facility under current market terms, our average interest rate may increase and have an adverse effect on our results of operations. Based on our current plans and expectations, we believe our capital expenditures for 2026 could total between $75 and $85 million.
Beyond the next 12 months, we expect that cash provided by operating activities will be the primary source of liquidity. This source, combined with our existing balances in cash and equivalents and amounts available under the Facility, is expected to be sufficient to meet our overall cash requirements.
We have various contractual and other obligations that are appropriately recorded as liabilities in our condensed consolidated financial statements. Certain other contractual obligations are not recognized as liabilities in our condensed consolidated financial statements. Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of December 31, 2025, lease commitments that have not yet commenced as of December 31, 2025, and purchase orders and longer-term purchase arrangements related to the procurement of services, including IT service agreements, and property, plant and equipment. The majority of these obligations, other than lease commitments, is expected to be due within one year.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
We prepare our consolidated financial statements in accordance with GAAP. However, from time to time, we may present in our public statements, press releases and SEC filings, non-GAAP financial measures such as Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Gross Margin and Adjusted Operating Income. Management considers such non-GAAP financial measures to provide useful supplemental information to investors in facilitating year-over-year comparisons by removing non-recurring items or other items that management believes do not directly reflect the underlying operations. Management uses these non-GAAP measures in the preparation of our annual operating plan and for our monthly analysis of operating results. Reconciliations of the non-GAAP measures to the most comparable GAAP financial measures are provided below. Our definitions of these non-GAAP measures may differ from similarly titled measures used by other companies. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.
Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures that exclude non-core sales and cost of sales attributed to the TSA made in connection with our February 2025 acquisition of Winland's Atlanta-based sauce and dressing production facility. The TSA sales are included in the reported net sales for our Foodservice segment and did not contribute meaningfully to gross profit. The TSA sales commenced in March 2025 and are expected to conclude during the quarter ending March 31, 2026. The following tables present a reconciliation between net sales, cost of sales, gross profit and gross margin as reported in accordance with GAAP and Adjusted Consolidated Net Sales, Adjusted Foodservice Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit and Adjusted Gross Margin for the three and six month periods ended December 31, 2025.
Three Months Ended December 31, 2025
(Dollars in thousands) Reported TSA-Related Adjusted
(non-GAAP)
Consolidated
Net Sales $ 517,953 $ 8,185 $ 509,768
Cost of Sales 380,693 8,185 372,508
Gross Profit $ 137,260 $ - $ 137,260
Gross Margin 26.5 % - % 26.9 %
Foodservice Segment
Foodservice Net Sales $ 240,428 $ 8,185 $ 232,243
Six Months Ended December 31, 2025
(Dollars in thousands) Reported TSA-Related Adjusted
(non-GAAP)
Consolidated
Net Sales $ 1,011,425 $ 18,876 $ 992,549
Cost of Sales 755,346 18,876 736,470
Gross Profit $ 256,079 $ - $ 256,079
Gross Margin 25.3 % - % 25.8 %
Foodservice Segment
Foodservice Net Sales $ 486,055 $ 18,876 $ 467,179
Adjusted Operating Income is a non-GAAP financial measure that excludes certain items affecting comparability, which can impact the analysis of our underlying core business performance and trends. The following table presents a reconciliation between operating income as reported in accordance with GAAP and Adjusted Operating Income for the three and six month periods ended December 31, 2025 and 2024. The $1.7 million adjustment in the reconciliation below for the three months ended December 31, 2025 includes $1.4 million in restructuring and impairment charges related to the impairment of manufacturing equipment. The remaining $0.3 million in restructuring and impairment charges for the three-month period are attributed to the closure of our sauce and dressing production facility in Milpitas, California. The $2.8 million adjustment in the reconciliation below for the six months ended December 31, 2025 consists of the $1.4 million in charges for the aforementioned impairment of manufacturing equipment with the remaining $1.4 million attributed to the restructuring and impairment charges resulting from the closure of our sauce and dressing production facility in Milpitas, California. The prior-year adjustment for the three and six months ended December 31, 2024 reflects incremental SG&A expenses attributed to the Atlanta production facility acquisition.
Three Months Ended
December 31,
Six Months Ended
December 31,
(Dollars in thousands) 2025 2024 Change 2025 2024 Change
Reported Operating Income $ 75,184 $ 75,661 $ (477) (0.6) % $ 134,444 $ 131,525 $ 2,919 2.2 %
SG&A Expenses - Acquisition Costs - 1,620 (1,620) (100.0) % - 1,620 (1,620) (100.0) %
Restructuring and Impairment Charges 1,667 - 1,667 N/M 2,810 - 2,810 N/M
Adjusted Operating Income (non-GAAP) $ 76,851 $ 77,281 $ (430) (0.6) % $ 137,254 $ 133,145 $ 4,109 3.1 %
CRITICAL ACCOUNTING POLICIES
There have been no changes in critical accounting policies from those policies disclosed in our 2025 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements and their impact on our consolidated financial statements are disclosed in Note 1 to the condensed consolidated financial statements.
FORWARD-LOOKING STATEMENTS
We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). This Quarterly Report on Form 10-Q contains various "forward-looking statements" within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "believe," "intend," "plan," "expect," "hope" or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control including, without limitation, the specific influences outlined below. Management believes these forward-looking statements to be reasonable; however, one should not place undue reliance on such statements that are based on current expectations. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law.
Items which could impact these forward-looking statements include, but are not limited to:
•the ability to successfully close the Bachan's, Inc. transaction, integrate the acquired business, and achieve operational and financial performance objectives;
•efficiencies in plant operations and our overall supply chain network;
•price and product competition;
•the success and cost of new product development efforts;
•the lack of market acceptance of new products;
•changes in demand for our products, which may result from changes in consumer behavior or loss of brand reputation or customer goodwill;
•the impact of customer store brands on our branded retail volumes;
•the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the federal, state or local government;
•the extent to which good-fitting business acquisitions are identified, acceptably integrated, and achieve operational and financial performance objectives;
•inflationary pressures resulting in higher input costs;
•changes in our cash flow or use of cash in various business activities;
•fluctuations in the cost and availability of ingredients and packaging;
•adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
•the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
•adverse changes in trade policies, including increased tariffs, retaliatory trade measures, or other trade restrictions;
•dependence on key personnel and changes in key personnel;
•adequate supply of labor for our manufacturing facilities;
•stability of labor relations;
•geopolitical events that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;
•dependence on a wide array of critical third parties to support our operations, including contract manufacturers, distributors, logistics providers and IT vendors;
•cyber-security incidents, information technology disruptions, and data breaches;
•the potential for loss of larger programs or key customer relationships;
•capacity constraints that may affect our ability to meet demand or may increase our costs;
•failure to maintain or renew license agreements;
•the possible occurrence of product recalls or other defective or mislabeled product costs;
•maintenance of competitive position with respect to other manufacturers;
•the outcome of any litigation or arbitration;
•the effect of consolidation of customers within key market channels;
•significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks;
•changes in estimates in critical accounting judgments; and
•certain other factors, including the information disclosed in our discussion of risk factors under Item 1A of our 2025 Annual Report on Form 10-K.
The Marzetti Company published this content on February 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 03, 2026 at 12:49 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]