The Marzetti Company

The Marzetti Company makes specialty foods for grocery stores and restaurants. Its Retail business sells dressings, dips, sauces and breads under its own brands and licensing agreements. Its Foodservice business supplies sauces, dressings, breads and pasta to restaurant chains and other customers.

Brands include Marzetti, New York Bakery and Sister Schubert's, alongside licensed products such as Chick-fil-A sauces and Texas Roadhouse dinner rolls. Based in Westerville, Ohio, the company trades on the Nasdaq Global Select Market as MZTI. Its fiscal year ends June 30.

The September quarter

Fiscal first-quarter results for the three months ended September 30. USD millions, except per-share figures.

Current adjusted operating income adds back $2.4 million of amortization on intangible assets acquired with Bachan's. The prior-year adjustment adds back $1.1 million of restructuring and impairment costs. Adjusted EPS reflects the corresponding after-tax effects. Acquisition-related interest expense remains in earnings.

Marzetti estimates that the cyclospora outbreak reduced Retail sales by about 4% and Foodservice sales by about 2% in the September 2026 quarter. It attributed the Retail effect to weaker demand for dressings, dips and croutons. Retail pounds shipped rose 0.4% including Bachan's but fell 7.1% excluding it. Management said the outbreak's impact had moderated in recent weeks.

Two acquisitions affect the comparisons

Marzetti acquired Bachan's on May 1, 2026, for an announced $400 million, funded with cash and a $200 million term loan. Its preliminary purchase allocation records $399.3 million net of acquired cash. Bachan's contributed $15.4 million of sales during May and June and $17.8 million in the September quarter.

A separate February 2025 acquisition added a sauce and dressing plant in Atlanta. A temporary supply agreement associated with that purchase ended during the quarter through March 2026. It contributed $10.7 million of sales and matching costs in the September 2025 comparison period.

Excluding that temporary contract, consolidated sales declined 0.3% and Foodservice sales declined 2.6% in the latest quarter. Gross margin on the same adjusted basis fell from 24.6% to 23.0%. That adjustment retains Bachan's and the effects of weaker demand.

Cash, borrowing and investment

At September 30, cash was $17.5 million, down from $25.1 million at June 30. Term-loan principal declined from $200 million to $197.5 million. After unamortized financing costs, its carrying value was $196.8 million, including $10 million classified as current debt.

The company had no revolving loans outstanding at quarter-end. Its $200 million revolving facility was reduced by $2.5 million of standby letters of credit. Marzetti reported compliance with its debt covenants and substantial room within the required limits.

The term loan normally matures in April 2031. It can become due in March 2029 if the revolving facility is not extended on the terms specified in the agreement.

Quarterly operating cash of $51 million accompanied $17.8 million of cash capital spending, $27.4 million of dividends and $5.8 million of treasury-stock purchases. Cash also funded other investing and financing uses. The quarterly dividend was $1 a share, compared with $0.95 a year earlier.

The next operating test

August's outlook had already identified the outbreak as a demand concern. The latest quarter quantifies the sales effect alongside higher freight costs and costs to commission additional Atlanta production capacity.

For the remainder of fiscal 2027, Marzetti expects acquired-brand sales, new products and selected quick-service restaurant customers to support revenue. It expects pricing and cost savings to mitigate most or all of the anticipated input-cost pressures. The outlook gives no numerical annual sales or EPS target.