MARZETTI CO
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
MZTI$104.93-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0000057515-25-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0000057515-25-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 114 current paragraphs.
80 unchanged; 20 reworded; 13 added; 25 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
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.
Current report
•the closure of our sauce and dressing production facility in Milpitas, California during the quarter ended September 30, 2025.
Current report
Consolidated gross profit for the three months ended September 30, 2025 increased $8.0 million to afirst quarter record $118.8 million. Consolidated gross profit benefited from our cost savings programs and volume growth. Reported gross margin improved 30 basis points while Adjusted Gross Margin increased 80 basis points.
Current report
Selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 2025 increased 6.3% to $58.4 million compared to $55.0 million in the prior-year period. This increase reflects higher marketing costs as we invested to support the continued growth of our Retail brands, higher Retail brokerage expenses, as well as increased expenditures for compensation and benefits.
Current report
Operating income grew $3.4 million to afirst quarter record $59.3 million for the three months ended September 30, 2025. The increase in operating income reflects the higher gross profit, as partially offset by the increased SG&A expenses and the impact of the $1.1 million in restructuring and impairment charges. Excluding the restructuring and impairment charges, Adjusted Operating Income increased $4.5 million to $60.4 million.
Current report
For the three months ended September 30, 2025, Retail segment operating income decreased 9.9% to $50.6 million due to cost inflation driven by increased commodity costs; higher marketing spend as we invested to support the continued growth of our brands; and increased brokerage expenses, as partially offset by our cost savings programs, the benefit of the higher sales volumes and some inflationary pricing.
Current report
For the three months ended September 30, 2025, Foodservice segment operating income increased 43.0% to $34.8 million driven by our cost savings programs, a more favorable sales mix and inflationary pricing, as partially offset by some modest cost inflation.
Current report
For the three months ended September 30, 2025, corporate expenses totaled $25.0 million, a slight increase from the prior-year period total of $24.6 million.
Current report
Looking forward to our fiscal second quarter and the remainder of our fiscal year, we anticipate Retail segment sales will continue to benefit from the growth of our licensing program and contributions from our own brands. 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.
Current report
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Current report
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.
Current report
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 table presents 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 months ended September 30, 2025.
Current report
•dependence on a wide array of critical third parties to support our operations, including contract manufacturers, distributors, logistics providers and IT vendors;
Removed paragraphs (25)
Previous report
•a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that reached substantial completion in March 2023; and
Previous report
•our enterprise resource planning system (“ERP”) project and related initiatives, Project Ascent, that reached completion of the implementation phase in August 2023.
Previous report
Project Ascent entailed the replacement of our primary customer and manufacturing transactional systems, warehousing systems, and financial systems with an integrated SAP S/4HANA system. Implementation of this system began in July 2022 and continued throughout fiscal 2023. Customer fulfillment levels remained strong before and after the initial system cutover with no unplanned disruptions in receiving orders, producing products or shipping orders. During fiscal 2023, we progressed through our ERP implementation with no major disruptions. We completed the final wave of the implementation phase in August 2023 as planned and have shifted our focus towards leveraging the capabilities of our new ERP system.
Previous report
Consolidated sales volumes, measured in pounds shipped, decreased 3.1% for the three months ended March 31, 2025. Excluding the impact of all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated sales volumes decreased 2.9%.
Previous report
Consolidated net sales for the nine months ended March 31, 2025 increased 1.0% to $1,433.7 million versus $1,418.9 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by volume gains. As noted above, year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024 and year-over-year comparisons for the Foodservice segment were favorably impacted by the TSA that commenced in March 2025. Breaking down the 1.0% increase in consolidated net sales as summarized in the table below, higher core volumes and product mix contributed approximately 230 basis points, as partially offset by approximately 110 basis points attributed to the exited perimeter-of-the-store bakery product lines. The incremental sales attributed to the TSA accounted for 10 basis points. The remaining impact was net pricing, including a higher level of trade spending in Retail. Excluding all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated net sales for the nine months ended March 31, 2025 increased 2.0%.
Previous report
Consolidated gross profit for the three months ended March 31, 2025 increased $1.5 million to a third quarter record $106.0 million. Consolidated gross profit benefited from our cost savings programs and some modest cost deflation while offsetting factors included the unfavorable impacts of the lower sales volume and startup costs associated with our newly acquired Atlanta plant. In the prior year, gross profit was unfavorably impacted by a $2.6 million inventory write-down resulting from our decision to exit our perimeter-of-the-store bakery product lines.
Previous report
Consolidated gross profit for the nine months ended March 31, 2025 increased $14.9 million to $349.6 million driven by volume growth, the positive impacts of our cost savings programs and some modest cost deflation.
Previous report
Selling, general and administrative (“SG&A”) expenses for the three months ended March 31, 2025 decreased 2.0% to $56.1 million compared to $57.2 million in the prior-year period. This decline reflects reduced expenditures for compensation and benefits in addition to prior-year expenses for Project Ascent, as partially offset by incremental expenditures of $1.7 million in the current-year period attributed to the Atlanta plant acquisition. These incremental expenditures were primarily comprised of legal and professional fees.
Previous report
SG&A expenses for the nine months ended March 31, 2025 increased 2.0% to $168.2 million compared to $164.9 million in the prior year. This increase includes investments in IT to support the continued growth of our business and $3.3 million in incremental expenditures in the current-year period attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent and reduced brokerage costs. The incremental acquisition-related expenditures were primarily comprised of legal and professional fees.
Previous report
Expenses attributed to Project Ascent, our ERP initiative, were included within Corporate Expenses and classified separately through 2024. A portion of the costs classified as Project Ascent expenses represent ongoing costs that have continued subsequent to the completion of our ERP implementation in 2024. Beginning in 2025, these ongoing costs are no longer classified separately as Project Ascent expenses.
Previous report
Operating income grew $14.7 million to a third quarter record $49.9 million for the three months ended March 31, 2025. The increase in operating income reflects the higher gross profit and reduced SG&A expenses in addition to the impact of last year’s $12.1 million in restructuring and impairment charges. SG&A expenses related to the Atlanta plant acquisition, which were primarily comprised of legal and professional fees, totaled $1.7 million for the three months ended March 31, 2025. In the prior year quarter, operating income was unfavorably impacted by a $2.6 million dollar inventory write-down from our decision to exit our perimeter of the store bakery product lines.
Previous report
Operating income grew $23.7 million to $181.4 million for the nine months ended March 31, 2025 due to the increase in gross profit and the prior-year restructuring and impairment charges, as partially offset by the higher SG&A expenses. SG&A expenses related to the Atlanta plant acquisition, which were primarily comprised of legal and professional fees, totaled $3.3 million for the nine months ended March 31, 2025.
Previous report
Pension Settlement Charge
Previous report
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 nine months ended March 31, 2025. See further discussion in Note 9 to the condensed consolidated financial statements.
Previous report
For the nine months ended March 31, 2025, diluted net income per share totaled $4.89, as compared to $4.50 per diluted share in the prior year. For the nine months ended March 31, 2025, the pension settlement charge reduced diluted earnings per share by $0.39 and costs related to the Atlanta plant acquisition reduced diluted earnings per share by $0.09. For the nine months ended March 31, 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.41. Expenditures for Project Ascent reduced diluted earnings per share by $0.22 for the nine months ended March 31, 2024.
Previous report
For the nine months ended March 31, 2025, Retail segment net sales increased 1.0% to $761.9 million compared to the prior-year total of $754.2 million. The increase in Retail segment net sales reflects higher sales volumes. Year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024. Excluding the exited product lines, Retail net sales increased 3.2%. Retail segment net sales growth was driven by our licensing program led by Texas Roadhouse TM dinner rolls, Chick-fil-A® sauces and Subway® sauces. Our new gluten-free New York Bakery TM frozen garlic bread also added to the growth in Retail net sales. Retail segment sales volumes, measured in pounds shipped, increased 1.4%. Excluding the impact of all sales attributed to the exited perimeter-of-the-store bakery product lines, Retail sales volumes increased 2.9%.
Previous report
For the three months ended March 31, 2025, Retail segment operating income decreased 3.7% to $45.6 million due to the lower sales volumes and increased supply chain costs, as partially offset by our cost savings programs. In the prior year, Retail segment operating income was unfavorably impacted by a $2.6 million inventory write-down resulting from our decision to exit our perimeter-of-the-store bakery product lines.
Previous report
For the nine months ended March 31, 2025, Retail segment operating income increased 6.8% to $170.8 million due to the higher sales volume and more favorable sales mix, our cost savings programs and some modest cost deflation.
Previous report
For the nine months ended March 31, 2025, Foodservice segment net sales increased 1.1% to $671.8 million from the prior-year total of $664.7 million driven by increased demand from several of our national chain restaurant account customers and growth for our Marzetti® branded Foodservice products. Foodservice segment sales volumes, measured in pounds shipped, increased 0.3%.
Previous report
For the three months ended March 31, 2025, Foodservice segment operating income increased 15.5% to $28.1 million driven by our cost savings programs and some modest cost deflation, as partially offset by the lower sales volume and startup costs attributed to the newly acquired Atlanta plant.
Previous report
For the nine months ended March 31, 2025, Foodservice segment operating income increased 5.9% to $82.7 million driven by the beneficial impact of our cost savings programs, cost deflation and higher sales volumes, as partially offset by higher supply chain costs.
Previous report
For the three months ended March 31, 2025 and 2024, corporate expenses totaled $23.8 million and $24.4 million, respectively. This decrease primarily reflects reduced expenditures for compensation and benefits in addition to prior-year expenses for Project Ascent, as partially offset by incremental expenditures of $1.7 million attributed to the Atlanta plant acquisition.
Previous report
For the nine months ended March 31, 2025 and 2024, corporate expenses totaled $72.1 million and $68.3 million, respectively. This increase primarily reflects investments in IT to support the continued growth of our business and $3.3 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.
Previous report
Looking forward to our fiscal fourth quarter, we anticipate some ongoing challenges with the consumer environment but are positioned to respond through innovation and incremental distribution in Retail and continuing to partner with our Foodservice customers to support their growth through collaboration on new menu items. We project that Retail segment sales will benefit from our licensing program, including expanding distribution for the recently introduced Texas Roadhouse TM dinner rolls and the extension of Chick-fil-A® sauce into the club channel. In the Foodservice segment, we anticipate continued growth from select customers in our mix of national chain restaurant accounts. With respect to our input costs, in aggregate we do not foresee significant impacts from commodity cost inflation or deflation.
Previous report
•dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business;
Reworded paragraphs (20)
Previous wording
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 2024 Annual Report on Form 10-K. 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.”
Current wording
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.”
Previous wording
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Current wording
The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Previous wording
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 investments include:
Current wording
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:
Previous wording
•the acquisition of a sauce and dressing production facility in the Atlanta, Georgia area in February 2025;
Current wording
•the acquisition of a sauce and dressing production facility in the Atlanta, Georgia area in February 2025; and
Previous wording
Consolidated net sales for the three months ended March 31, 2025 decreased 2.9% to $457.8 million versus $471.4 million last year, reflecting lower net sales for both the Retail and Foodservice segments driven primarily by volume declines. Year-over-year comparisons for the Retail segment were unfavorably impacted by prior-year sales attributed to the perimeter-of-the-store bakery product lines we exited in March 2024. Year-over-year comparisons for the Foodservice segment were favorably impacted by 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 commenced in March 2025 and will continue for a period of up to 12 months. Breaking down the 2.9% decrease in consolidated net sales as summarized in the table below, lower core volumes and product mix accounted for a decline of approximately 250 basis points, the exited perimeter-of-the-store bakery product lines reduced net sales approximately 100 basis points, and incremental sales attributed to the TSA added approximately 40 basis points. The remaining impact was net pricing. Excluding all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated net sales for the three months ended March 31, 2025 decreased 2.3%.
Current wording
Consolidated net sales for the three months ended September 30, 2025 increased 5.8% to $493.5 million versus $466.6 million last year, reflecting higher net sales for both the Retail and Foodservice segments driven by core volume increases, inflationary pricing in our Foodservice segment and incremental Foodservice 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 5.8% increase in consolidated net sales as summarized in the table below, higher core volumes and product mix accounted for an increase of approximately 210 basis points, the net pricing impact accounted for an increase of approximately 140 basis points, and incremental sales attributed to the TSA added approximately 230 basis points. Excluding all sales attributed to the TSA, Adjusted Consolidated Net Sales for the three months ended September 30, 2025 increased 3.5% to $482.8 million.
Previous wording
Consolidated sales volumes, measured in pounds shipped, increased 0.7% for the nine months ended March 31, 2025. Excluding the impact of all sales attributed to both the exited perimeter-of-the-store bakery product lines and the TSA, consolidated sales volumes increased 1.2%.
Current wording
Consolidated sales volumes, measured in pounds shipped, increased 3.9% for the three months ended September 30, 2025. Excluding the impact of all sales attributed to the TSA, adjusted sales volumes increased 1.5%.
Previous wording
In the quarter ended March 31, 2024, we committed to a plan to exit our perimeter-of-the-store bakery product lines and close our Flatout flatbread facility in Saline, Michigan and our Angelic Bakehouse sprouted grain bakery facility in Cudahy, Wisconsin. Production at these facilities ceased in March 2024, and we completed the divestiture of the real estate and manufacturing equipment at these locations during the quarter ended June 30, 2024. The operations of these facilities were not classified as discontinued operations as the closures did not represent a strategic shift that would have a major effect on our operations or financial results. For the three and nine months ended March 31, 2024, we recorded restructuring and impairment charges of $12.1 million related to these closures, as well as $2.6 million recorded in Cost of Sales for the write-down of inventories. The restructuring and impairment charges, which consisted of impairment charges for fixed assets and intangible assets, one-time termination benefits and other closing costs, were not allocated to our two reportable segments due to their unusual nature whereas the $2.6 million write-down of inventories was recorded in our Retail segment.
Current wording
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 months ended September 30, 2025, we recorded restructuring and impairment charges of $1.1 million 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.
Previous wording
Our effective tax rate was 22.0% and 23.5% for the nine months ended March 31, 2025 and 2024, respectively. For the nine months ended March 31, 2025 and 2024, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
Current wording
Our effective tax rate was 22.4% and 22.8% for the three months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025 and 2024, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
Previous wording
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, vesting of restricted stock awards and vesting of performance units. For the nine months ended March 31, 2025 and 2024, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by 0.1% and less than 0.1%, respectively.
Current wording
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 three months ended September 30, 2025 and 2024, the impact of net windfall tax benefits from stock-based compensation reduced our effective tax rate by 0.5% and 0.1%, respectively.
Previous wording
As influenced by the factors discussed above, diluted net income per share for the third quarter of 2025 totaled $1.49, as compared to $1.03 per diluted share in the prior year. For the three months ended March 31, 2025, costs related to the Atlanta plant acquisition reduced diluted earnings per share by $0.05. For the three months ended March 31, 2024, costs related to our decision to exit our perimeter-of-the-store bakery product lines reduced diluted earnings per share by a total of $0.41. These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.34, and the inventory write-down, which reduced diluted earnings per share by $0.07. Expenditures for Project Ascent reduced diluted earnings per share by $0.05 for the three months ended March 31, 2024.
Current wording
As influenced by the factors discussed above, diluted net income per share for the first quarter of 2026 totaled $1.71, as compared to $1.62 per diluted share in the prior year. For the three months ended September 30, 2025, restructuring and impairment charges reduced diluted earnings per share by $0.03.
Previous wording
For the three months ended March 31, 2025, Retail segment net sales decreased 2.6% to $241.5 million from the prior-year total of $248.1 million. The decrease in Retail segment net sales was driven by the unfavorable impact of the company’s exit from our perimeter-of-the-store bakery product lines in March 2024, which reduced the segment’s net sales by 1.9%, along with the shift of some Retail sales into our fiscal fourth quarter due to the later Easter holiday and an overall more challenging consumer environment. Despite these headwinds, our Retail segment’s licensing program remained a source for growth in the quarter as we began shipping Chick-fil-A® sauce into the club channel; our Texas Roadhouse TM dinner rolls continued to perform very well; and the Subway® sauces we introduced last March delivered incremental sales. Net sales for our category-leading New York Bakery TM frozen garlic bread products also improved. Retail segment sales volumes, measured in pounds shipped, decreased 2.2%. Excluding the impact of all sales attributed to our perimeter-of-the-store bakery product lines, Retail sales volumes decreased 0.9%.
Current wording
For the three months ended September 30, 2025, Retail segment net sales increased 3.5% to $247.8 million from the prior-year total of $239.6 million. The increase in Retail segment net sales was driven by higher sales volumes. Net sales for our category-leading New York Bakery TM frozen garlic bread products were a strong contributor to the sales increase. Our Retail segment’s licensing program also remained a source for growth in the quarter as the Chick-fil-A® sauce we began shipping into the club channel in late fiscal 2025 delivered incremental sales in addition to gains in the traditional retail channel for Chick-fil-A® sauces. Olive Garden® dressings and Buffalo Wild Wings® sauces also added to the sales growth for licensed products. Retail segment sales volumes, measured in pounds shipped, increased 3.2%.
Previous wording
For the three months ended March 31, 2025, Foodservice segment net sales decreased 3.2% to $216.3 million compared to $223.4 million in the prior-year period driven by an industry-wide slowdown in restaurant traffic. The decline also reflects the impact of menu changes as some customers shifted to value offerings. Excluding all sales attributed to the TSA resulting from the February 2025 Atlanta plant acquisition, Foodservice segment net sales decreased 4.1%. Foodservice segment sales volumes, measured in pounds shipped, decreased 3.6%. Excluding all TSA sales, Foodservice segment sales volumes declined 4.3%.
Current wording
For the three months ended September 30, 2025, Foodservice segment net sales grew 8.2% to $245.6 million compared to $227.0 million in the prior-year period driven by increased demand from several of our national chain restaurant account customers. Excluding all sales attributed to the TSA resulting from the February 2025 Atlanta plant acquisition, Adjusted Foodservice Net Sales increased 3.5%. Foodservice segment sales volumes, measured in pounds shipped, increased 4.4%. Excluding all TSA sales, adjusted Foodservice sales volumes increased 0.5%.
Previous wording
We also look forward to further incorporating our newly acquired Atlanta-based sauce and dressing plant into our manufacturing network as we continue to add more production volume to that facility in the fiscal fourth quarter.
Current wording
We also look forward to further incorporating our newly acquired Atlanta-based sauce and dressing plant into our manufacturing network.
Previous wording
For the nine months ended March 31, 2025, net cash provided by operating activities totaled $173.3 million, as compared to $217.5 million in the prior-year period. This decrease was primarily due to the year-over-year changes in net working capital, particularly accounts receivable, accounts payable, accrued liabilities and inventories. The accounts receivable impact related to both a large increase in receivables in the current-year period and a large decline in receivables in the prior-year period due to the timing of sales and customer payments. The unfavorable year-over-year change for accounts payable and accrued liabilities resulted from prior-year increases in payables, as impacted by the timing of payments, and accrued federal income taxes. The inventory impact reflected a current-year increase in raw materials and finished goods on-hand. Higher net income provided a partial offset to the unfavorable working capital changes.
Current wording
For the three months ended September 30, 2025, net cash provided by operating activities totaled $69.5 million, as compared to $19.9 million in the prior-year period. This increase was primarily due to the year-over-year changes in net working capital, particularly accounts payable and inventories. The favorable year-over-year change for accounts payable resulted from the current-year increase in payables, as impacted by the timing of payments. The inventory impact was driven by a larger increase in finished goods on-hand in the prior-year period. Higher net income also contributed to the increase in net cash provided by operating activities. The changes in other current assets and deferred income taxes were largely offsetting and resulted from tax timing benefits of the One Big Beautiful Bill Act, which was enacted in July 2025.
Previous wording
Cash used in investing activities for the nine months ended March 31, 2025 was $130.3 million, as compared to $57.4 million in the prior year. This increase primarily reflects the $78.8 million of cash paid for the February 2025 Atlanta plant acquisition, as partially offset by a lower level of payments for property additions in the current year.
Current wording
Cash used in investing activities for the three months ended September 30, 2025 was $18.8 million, as compared to $19.9 million in the prior year. This decrease primarily reflects a lower level of payments for property additions in the current year.
Previous wording
Cash used in financing activities for the nine months ended March 31, 2025 of $81.9 million decreased from the prior-year total of $83.8 million. This decrease reflects lower levels of share repurchases, as partially offset by higher levels of dividend payments.
Current wording
Cash used in financing activities for the three months ended September 30, 2025 of $30.0 million increased from the prior-year total of $28.4 million. This increase reflects higher levels of dividend payments.
Previous wording
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 liquidity needs over the next 12 months, including the projected levels of capital expenditures, dividend payments and the acquisition discussed above. 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 2025 will total an estimated $65 million.
Current wording
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 liquidity needs over the next 12 months, including the projected levels of capital expenditures and dividend payments. 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.
Previous wording
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 March 31, 2025, as well as 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 is expected to be due within one year.
Current wording
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 September 30, 2025, lease commitments that have not yet commenced as of September 30, 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.
Previous wording
The following table presents a reconciliation between operating income as reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and adjusted operating income, which is a non-GAAP financial measure. Adjusted operating income excludes certain items affecting comparability that can impact the analysis of our underlying business performance and trends. Management uses this non-GAAP measure in preparation of our annual operating plan and for our monthly analysis of operating results. The excluded items consist of costs related to restructuring or acquisition activities.
Current wording
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 adjustment in the reconciliation below reflects restructuring and impairment charges related to the closure of our sauce and dressing production facility in Milpitas, California. The following table presents a reconciliation between operating income as reported in accordance with GAAP and Adjusted Operating Income for the three months ended September 30, 2025 and 2024.
Previous wording
•the impact of any regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government;
Current wording
•the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the FDA or any state or local government;
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.