MARZETTI CO

Previous 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.

Current wording

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.

Previous 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%.

Current wording

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%.

Previous wording

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 wording

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.

Previous wording

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 wording

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.

Previous 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.

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 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.

Previous wording

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 wording

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.

Previous 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:

Current wording

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:

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 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.

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 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.

Previous 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.

Current wording

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.

Previous 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%.

Current wording

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 Bakery TM frozen 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%.

Previous wording

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 wording

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.

Previous 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%.

Current wording

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%.

Previous wording

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 wording

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.

Previous wording

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 wording

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.

Previous wording

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 wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

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 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.

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 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.

Previous wording

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 wording

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.

Previous 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.

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 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.

Previous 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;

Current wording

•the impact of any laws and regulatory matters affecting our food business, including any additional requirements imposed by the federal, state or local government;