MARZETTI CO
For the period ended Jun 30, 2026. Filed Aug 25, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 25, 2026
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-K
Period ended 2025-06-30; filed 2025-08-21.
0000057515-25-000020
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-08-25.
0000057515-26-000019
Item 7. 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 136 previous paragraphs and 142 current paragraphs.
91 unchanged; 25 reworded; 25 added; 20 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 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 (25)
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, Adjusted Operating Income and Adjusted Net Income Per Diluted Share, 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 acquisition of Bachan’s, Inc. (“Bachan’s”), the rapidly growing Japanese Barbecue Sauce brand known for its authentic, clean-label products, in May 2026;
Current report
•the closure of our sauce and dressing production facility in Milpitas, California during the quarter ended September 30, 2025; and
Current report
Consolidated net sales for the year ended June 30, 2026 increased 1.1% to a new record of $1,929.8 million from the prior-year record total of $1,909.1 million. The net sales growth was driven by higher pricing in both segments in response to increased input costs, incremental sales resulting from the acquisition of Bachan’s that was completed on May 1, 2026, incremental sales from a temporary supply agreement (“TSA”), and higher sales volumes in our Foodservice segment. These favorable factors were partially offset by the impact of lower sales volumes in our Retail segment. The TSA sales, all of which are reported in our Foodservice segment, resulted 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 concluded during the quarter ended March 31, 2026.
Current report
Breaking down the 1.1% increase in consolidated net sales as summarized in the table below, lower core volumes and product mix accounted for a decrease of approximately 90 basis points, the net pricing impact accounted for an increase of approximately 90 basis points, incremental sales from Bachan’s contributed approximately 80 basis points, and incremental sales attributed to the TSA added approximately 30 basis points. Excluding all sales attributed to the TSA, Adjusted Consolidated Net Sales for the year ended June 30, 2026 increased 0.8% to $1,909.4 million.
Current report
Consolidated gross profit increased 4.7% to $477.3 million in 2026 compared to $455.6 million in 2025. Consolidated gross profit benefited from our cost savings programs, as partially offset by the unfavorable impacts of a less favorable sales mix and lower core sales volumes. Reported gross margin improved 80 basis points while Adjusted Gross Margin increased 100 basis points.
Current report
Selling, general and administrative (“SG&A”) expenses increased 10.6% to $254.6 million in 2026 compared to $230.2 million in 2025. SG&A expenses in the current year included $14.5 million in incremental expenditures attributed to the Bachan’s acquisition transaction costs in addition to $1.6 million in incremental noncash amortization expense for Bachan’s intangible assets. SG&A expenses in the prior year included $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition. Excluding these items, SG&A expenses grew 5.3%, or $12.0 million, in 2026 driven by $4.8 million in incremental core SG&A expenses for Bachan’s and increased investments in IT and personnel.
Current report
Restructuring, Impairment and Other, Net
Current report
In 2026, we also recorded a noncash impairment charge of $1.1 million related to manufacturing equipment, net of a recovery through an insurance claim. This amount was reflected in our Foodservice segment.
Current report
Interest Expense
Current report
Interest expense totaled $1.8 million in 2026 related to borrowings under our unsecured credit facility. See further discussion in Note 3 to the consolidated financial statements.
Current report
In 2026, the benefit in Restructuring, Impairment and Other, Net increased diluted earnings per share by $0.60. Costs related to the Bachan’s acquisition reduced diluted earnings per share by $0.41 and amortization of intangible assets reduced diluted earnings per share by $0.05.
Current report
Refer to the “Reconciliation of GAAP to non-GAAP Financial Measures” section below for additional information.
Current report
In 2026, net sales for the Retail segment totaled $1,002.8 million, a 0.1% decrease from the prior-year record of $1,003.4 million, due to a decline in sales volumes as partially offset by the incremental sales from Bachan’s and some inflationary pricing. Sales highlights for the current-year period included continued strong growth for our category-leading New York Bakery TM frozen garlic bread products and expanding distribution for our recently introduced Texas Roadhouse® dinner rolls. Retail segment sales volumes, measured in pounds shipped, decreased 1.9%. Excluding Bachan’s, Retail segment sales volumes declined 3.2%, which includes the unfavorable impact of reduced sales into the club channel..
Current report
In 2026, Retail segment operating income decreased $8.0 million, or 3.8%, to $203.7 million due to lower sales volumes and inflationary costs, as partially offset by our cost savings programs and some inflationary pricing.
Current report
In 2026, Foodservice segment operating income increased 17.7% to $131.3 million driven by our cost savings programs, inflationary pricing, a more favorable sales mix and the benefit of recent IT investments to support a more optimized trade spend system, as partially offset by inflationary costs.
Current report
On May 1, 2026, we completed the acquisition of Bachan’s. The purchase price of $399 million, net of cash acquired, is subject to future post-closing adjustments and was financed with cash on hand and a $200 million term loan.
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, Adjusted Operating Income, and Adjusted Net Income Per Diluted Share (“Adjusted Diluted EPS”). 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 concluded during the quarter ended 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 years ended June 30, 2026 and 2025.
Current report
Adjusted Operating Income and Adjusted Diluted EPS are non-GAAP financial measures that exclude certain items affecting comparability, which can impact the analysis of our underlying core business performance and trends. The following table presents a reconciliation between 1) operating income as reported in accordance with GAAP and Adjusted Operating Income and 2) diluted EPS as reported in accordance with GAAP and Adjusted Diluted EPS for the years ended June 30, 2026, 2025 and 2024. For 2026, the adjustments reflect incremental SG&A expenses attributed to the Bachan’s acquisition; incremental SG&A expenses attributed to the amortization of intangible assets resulting from the Bachan’s acquisition; and restructuring, impairment and other, net, which consists of restructuring and impairment charges resulting from the closure of our sauce and dressing production facility in Milpitas, California, the gain on the sale of the Milpitas real property, and charges related to the impairment of manufacturing equipment, net of a recovery through an insurance claim. For 2025, the adjustments reflect incremental SG&A expenses attributed to the Atlanta production facility acquisition; restructuring and impairment charges primarily related to the closure of our production facility in Milpitas, California; and the one-time noncash pension settlement charge. For 2024, the adjustments consist of a write-down of inventories and restructuring and impairment charges, both of which resulted from our decision to exit our perimeter-of-the-store bakery product lines.
Current report
Business Combinations, Goodwill and Other Intangible Assets
Current report
We account for business combinations using the acquisition method of accounting. Accordingly, the purchase price of an acquired business is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with any excess purchase price recorded as goodwill. The determination of the fair values of assets acquired and liabilities assumed requires management to make significant estimates and assumptions, particularly with respect to acquired intangible assets. These estimates and assumptions may include forecasts of future revenues and cash flows, expected growth rates, customer attrition rates, royalty rates, useful lives, and discount rates. We generally estimate the fair value of acquired intangible assets using income-based valuation methodologies, including the relief-from-royalty method for tradenames and proprietary recipes and the multi-period excess earnings method for customer relationships.
Current report
•the ability to successfully integrate the acquired Bachan’s business and achieve operational and financial performance objectives;
Current report
•changes in our cash flow or use of cash in various business activities;
Removed paragraphs (20)
Previous report
•a significant capacity expansion project for our Marzetti dressing and sauce facility in Horse Cave, Kentucky that was fully operational beginning 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 net sales for the year ended June 30, 2025 increased 2.0% to a new record of $1,909.1 million from the prior-year record total of $1,871.8 million, reflecting higher net sales for both the Retail and Foodservice segments driven primarily by increased volume and mix. 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 for a period of up to 12 months. Breaking down the 2.0% increase in consolidated net sales as summarized in the table below, higher core volumes and product mix contributed approximately 220 basis points, as partially offset by approximately 90 basis points attributed to the exited perimeter-of-the-store bakery product lines. The incremental sales attributed to the TSA accounted for 80 basis points.
Previous report
Consolidated gross profit increased 5.4% to $455.6 million in 2025 compared to $432.3 million in 2024 driven by the positive impacts of our cost savings programs, volume growth and some modest cost deflation.
Previous report
Selling, general and administrative (“SG&A”) expenses increased 5.6% to $230.2 million in 2025 compared to $218.1 million in 2024. This increase includes investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent. 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
Restructuring and Impairment Charges
Previous report
In 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. In 2024, we recorded restructuring and impairment charges of $14.9 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.
Previous report
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 core 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.
Previous report
In 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 $0.49. These exit costs included restructuring and impairment charges, which reduced diluted earnings per share by $0.42, and the inventory write-down, which reduced diluted earnings per share by $0.07. In 2024, expenditures for Project Ascent reduced diluted earnings per share by $0.23.
Previous report
In 2025, net sales for the Retail segment reached a record $1,003.4 million, a 1.5% increase from the prior-year total of $988.4 million, reflecting 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 3.3%. 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 1.6%. 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
In 2025, Retail segment operating income increased $4.0 million, or 1.9%, to $211.7 million due to the higher sales volume and more favorable sales mix, our cost savings programs and some modest cost deflation, as partially offset by higher sales and marketing costs as we invested to support the growth of our brands.
Previous report
In 2025, Foodservice segment operating income increased 14.9% to $111.6 million driven by the beneficial impact of our cost savings programs and cost deflation, as partially offset by higher supply chain costs.
Previous report
We also look forward to further incorporating our newly acquired Atlanta-based sauce and dressing plant into our manufacturing network.
Previous report
While the current tariff environment entails some uncertainty, based on our understanding of currently available information for existing and proposed tariffs, we do not anticipate the performance of our business will be materially impacted by tariffs.
Previous report
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). In accordance with GAAP, the effects of changes in tax laws or rates are recognized in the period in which the legislation is enacted. We expect the OBBBA to primarily provide cash tax timing benefits with no material impact on our effective tax rate.
Previous report
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.
Previous report
Cash provided by operating activities and our existing balances in cash and equivalents remain the primary sources for funding our investing and financing activities, as well as financing our organic growth initiatives.
Reworded paragraphs (25)
Previous wording
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto in Item 8 of this 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 as a result of factors set forth under the caption “Forward-Looking Statements” and those set forth in Item 1A of this Annual Report on Form 10-K.
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 as a result of factors set forth under the caption “Forward-Looking Statements” and those set forth in Item 1A of this Annual Report on Form 10-K.
Previous wording
•demonstrated success with strategic licensing programs in Retail through both new and established relationships in the foodservice industry;
Current wording
•demonstrated success with strategic licensing programs in Retail through both established relationships in the foodservice industry and new relationships;
Previous wording
With respect to long-term growth, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, IT platforms and other initiatives to support and strengthen our operations. Recent examples of resulting investments include:
Current wording
With respect to our long-term growth strategy, in addition to complementary acquisitions, we continually evaluate the future opportunities and needs for our business specific to our plant infrastructure, production capacity and IT platforms to support and strengthen our operations. Recent examples of resulting strategic actions include:
Previous wording
Consolidated sales volumes, measured in pounds shipped, increased 1.2% for the year ended June 30, 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 0.9%.
Current wording
Consolidated sales volumes, measured in pounds shipped, decreased 0.2% for the year ended June 30, 2026. Excluding the impact of all sales attributed to the TSA, consolidated sales volumes decreased 0.6%.
Previous wording
In 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 is expected to conclude in the quarter ending September 30, 2025. In 2025, we recorded restructuring and impairment charges of $4.5 million related to this closure. These charges consisted of impairment charges for personal property and operating lease right-of-use assets, 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 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 2026 and 2025, we recorded restructuring and impairment charges of $1.4 million and $4.5 million, respectively, related to this closure. These charges consisted of impairment charges for personal property and operating lease right-of-use assets, one-time termination benefits and other closing costs. In 2026, we also recorded a gain of $18.5 million on the sale of the related real property. 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 increased 10.5% to $220.3 million in 2025 compared to $199.4 million in 2024 due to the increase in gross profit and lower restructuring and impairment charges, as partially offset by the higher SG&A expenses.
Current wording
Operating income increased 8.3% to $238.7 million in 2026 compared to $220.3 million in 2025 due to the increase in gross profit and the favorable year-over-year change in Restructuring, Impairment and Other, which were partially offset by the higher SG&A expenses. Excluding the current-year net benefit and the prior-year expense in Restructuring, Impairment and Other, the current-year and prior-year acquisition costs in SG&A and Bachan’s current-year intangible asset amortization in SG&A, Adjusted Operating Income increased $9.6 million to $238.8 million.
Previous wording
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 in 2025. See further discussion in Note 11 to the condensed consolidated financial statements.
Current wording
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 in 2025. See further discussion in Note 11 to the consolidated financial statements.
Previous wording
Other, net resulted in a benefit of $7.1 million in 2025 compared to a benefit of $6.2 million in 2024. This change primarily reflects higher interest income.
Current wording
Other, net resulted in a benefit of $5.0 million in 2026 compared to a benefit of $7.1 million in 2025. This change primarily reflects lower interest income.
Previous wording
Our effective tax rate was 21.6% and 22.8% in 2025 and 2024, respectively. See Note 8 to the consolidated financial statements for a reconciliation of the statutory rate to the effective rate.
Current wording
Our effective tax rate was 20.8% and 21.6% in 2026 and 2025, respectively. See Note 8 to the consolidated financial statements for a reconciliation of the statutory rate to the effective rate.
Previous wording
As influenced by the factors discussed above, diluted net income per share totaled $6.07 in 2025, an increase from the 2024 total of $5.76 per diluted share. Diluted weighted average common shares outstanding for each of the years ended June 30, 2025 and 2024 have remained relatively stable.
Current wording
As influenced by the factors discussed above, diluted net income per share totaled $6.98 in 2026, an increase from the 2025 total of $6.07 per diluted share. Diluted weighted average common shares outstanding for each of the years ended June 30, 2026 and 2025 have remained relatively stable.
Previous wording
In 2025, Foodservice segment net sales increased 2.5% to a record $905.7 million from the 2024 total of $883.3 million driven by increased demand from several of our national chain restaurant account customers and growth for our Marzetti® branded Foodservice products. In the back half of the fiscal year, Foodservice segment net sales were unfavorably impacted by menu changes implemented by two of our national chain restaurant customers as they shifted their focus to value offerings. Excluding all sales attributed to the TSA resulting from the February 2025 Atlanta plant acquisition, Foodservice segment net sales increased 0.9%. Foodservice segment sales volumes, measured in pounds shipped, increased 0.9%. Excluding all TSA sales, Foodservice segment sales volumes declined 0.3%.
Current wording
In 2026, Foodservice segment net sales increased 2.4% to a new record of $927.1 million from last year’s record of $905.7 million driven by increased demand from several of our national chain restaurant account customers, the benefit of inflationary pricing, and the higher TSA sales. Excluding all sales attributed to the TSA, Adjusted Foodservice Net Sales increased 1.7%. Foodservice segment sales volumes, measured in pounds shipped, increased 0.9%. Excluding all TSA sales, Foodservice sales volumes increased 0.3%.
Previous wording
In 2025, corporate expenses totaled $97.9 million as compared to $90.5 million in 2024. This increase primarily reflects investments in IT to support the continued growth of our business and $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition, as partially offset by prior-year expenses for Project Ascent.
Current wording
In 2026, corporate expenses totaled $113.4 million as compared to $97.9 million in 2025. Excluding acquisition-related expenses, this increase was primarily driven by increased investments in personnel and IT. Corporate expenses in the current year included $14.5 million in incremental expenditures attributed to the Bachan’s acquisition. Corporate expenses in the prior year included $3.8 million in incremental expenditures attributed to the Atlanta plant acquisition.
Previous wording
For 2026, we anticipate Retail segment sales will continue to benefit from volume growth, with contributions from both our licensing program and our Marzetti®, New York Bakery TM, and Sister Schubert’s® 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 in fiscal 2026 that we plan to offset through contractual pricing and our cost savings programs as we remain focused on continued margin improvement in the year ahead.
Current wording
For 2027, in addition to incremental sales attributed to the Bachan’s acquisition, we expect Retail sales will benefit from new items we recently launched or have planned for introduction in the year ahead for both our legacy brands and licensing program. In the Foodservice segment, we expect sales to remain supported by select quick-service restaurant customers in our mix of national chain restaurant accounts. Note that external factors, including U.S. economic performance and consumer behavior, may impact the topline growth for both segments in the coming year. We also continue to monitor the impact of the Cyclospora outbreak on product demand and sales. With respect to our input costs, in aggregate we anticipate a moderate level of inflation in fiscal 2027 that we plan to offset through inflationary pricing and our cost savings programs as we remain focused on continued margin improvement.
Previous wording
We maintain sufficient flexibility in our capital structure to ensure our capitalization is adequate to support our future internal growth prospects, acquire food businesses consistent with our strategic goals, and maintain cash returns to our shareholders through cash dividends and opportunistic share repurchases. Our balance sheet maintained fundamental financial strength during 2025 as we ended the year with $161 million in cash and equivalents, along with shareholders’ equity of $998 million and no debt.
Current wording
We maintain sufficient flexibility in our capital structure to ensure our capitalization is adequate to support our future internal growth prospects, acquire food businesses consistent with our strategic goals, and maintain cash returns to our shareholders through cash dividends and opportunistic share repurchases. We ended the year with $25 million in cash and equivalents, shareholders’ equity of $1,053 million and outstanding debt of $200 million.
Previous wording
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 June 30, 2025. At June 30, 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.
Current wording
Under our unsecured credit facility (“Facility”), which was amended in March 2026, we may borrow up to a maximum of $200 million at any one time on a revolving credit basis, as well as an additional $200 million under a term loan to finance our acquisition of Bachan’s. At June 30, 2026, we had borrowings of $200 million outstanding under the term loan and no revolving loans outstanding. At June 30, 2026, 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 revolving loans are then due and payable. The maturity date for the term loan is April 29, 2031; however, there is a springing maturity date of March 6, 2029, if, by December 6, 2028, the Facility termination date has not been extended to April 29, 2031 or later with an aggregate revolving commitment equal to or greater than the outstanding principal balance of the term loan. 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. Revolving loans may be used for general corporate purposes.
Previous wording
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.
Current wording
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 $200 million of additional revolving 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.
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. 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 2027 could total approximately $90 million.
Previous wording
Certain other contractual obligations are not recognized as liabilities in our consolidated financial statements. Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 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
Certain other contractual obligations are not recognized as liabilities in our consolidated financial statements. Examples of such obligations are commitments to purchase raw materials or packaging inventory that has not yet been received as of June 30, 2026, lease commitments that have not yet commenced as of June 30, 2026, 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
Cash provided by operating activities in 2025 totaled $261.5 million, an increase of 4.0% as compared with the 2024 total of $251.6 million. The 2025 increase was primarily due to higher net income, the current-year noncash pension settlement charge and higher noncash depreciation and amortization expense, as partially offset by unfavorable year-over-year changes in net working capital and lower noncash restructuring and impairment charges. The unfavorable net working capital changes reflected the impact of a prior-year decline in accounts receivable and a prior-year increase in accounts payable, partially offset by a prior-year increase in inventories.
Current wording
Cash provided by operating activities in 2026 totaled $283.8 million, an increase of 8.5% as compared with the 2025 total of $261.5 million. The 2026 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. The unfavorable year-over-year changes in net working capital reflected the impact of a current-year increase in inventories, reflecting higher levels of finished goods on-hand, which was largely offset by a current-year increase in accounts payable. Higher net income was offset by the impacts of the current-year gain on sale of property and the prior-year noncash pension settlement charge.
Previous wording
Cash used in investing activities totaled $148.2 million in 2025 as compared to $67.4 million in 2024. The 2025 increase primarily reflects the $78.8 million of cash paid for the February 2025 Atlanta plant acquisition, as well as prior-year proceeds from the sale of property totaling $7.0 million. Payments for property additions were $9.6 million lower in the current year.
Current wording
Cash used in investing activities totaled $470.0 million in 2026 as compared to $148.2 million in 2025. The 2026 increase primarily reflects cash paid for the May 2026 Bachan’s acquisition of $399.3 million compared to prior-year cash paid for the Atlanta plant acquisition of $78.8 million, as well as a $19.7 million increase in payments for property additions. Partially offsetting these items were current-year proceeds from the sale of property totaling $20.3 million.
Previous wording
Financing activities used net cash totaling $115.3 million and $109.2 million in 2025 and 2024, respectively. The vast majority of the cash used in financing activities is attributed to the payment of dividends, and the 2025 increase in cash used in financing activities primarily reflects higher levels of dividend payments. The regular dividend payout rate for 2025 was $3.75 per share, as compared to $3.55 per share in 2024. This past fiscal year marked the 62 nd consecutive year of increased regular cash dividends.
Current wording
Financing activities provided net cash totaling $49.8 million in 2026 and used net cash totaling $115.3 million in 2025. In 2026, net borrowing activities provided cash of $199.1 million and were partially offset by higher levels of cash used for share repurchases and dividend payments. The regular dividend payout rate for 2026 was $3.95 per share, as compared to $3.75 per share in 2025. This past fiscal year marked the 63 rd consecutive year of increased regular cash dividends.
Previous wording
Goodwill is not amortized. It is evaluated annually at April 30 by applying impairment testing procedures. We evaluate the future economic benefit of the recorded goodwill when events or circumstances indicate potential recoverability concerns. Carrying amounts are adjusted appropriately when determined to have been impaired.
Current wording
Goodwill is not amortized. It is evaluated annually at April 30 by applying impairment testing procedures. Other finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives to Selling, General and Administrative Expenses. We evaluate the future economic benefit of the recorded goodwill and other intangible assets when events or circumstances indicate potential recoverability concerns. Carrying amounts are adjusted appropriately when determined to have been impaired.
Previous wording
•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;
Current wording
•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 foodborne outbreaks;
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;
Previous wording
•certain other risk factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission.
Current wording
•certain other factors, including those discussed in other filings we have submitted to the Securities and Exchange Commission.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto in Item 8 of this Annual Report on Form 10-K.