The Marzetti Company’s Q2 results reflected a combination of strong top-line growth and margin pressures. While revenue growth outpaced Wall Street expectations, profitability came in below consensus, as management cited increased marketing investments and integration costs related to its newly acquired Atlanta facility. CEO Dave Ciesinski pointed to gains across key retail brands and licensing programs, including the rollout of gluten-free Texas Toast and expanded Chick-fil-A sauce distribution. He acknowledged that higher expenses were driven by targeted marketing efforts designed to boost household penetration, as well as one-off costs from ongoing restructuring initiatives.
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The Marzetti Company (MZTI) Q2 CY2025 Highlights:
- Revenue: $475.4 million vs analyst estimates of $456.9 million (5% year-on-year growth, 4.1% beat)
- Adjusted EPS: $1.34 vs analyst estimates of $1.33 (in line)
- Adjusted EBITDA: $61.13 million vs analyst estimates of $60.18 million (12.9% margin, 1.6% beat)
- Operating Margin: 8.2%, down from 9.2% in the same quarter last year
- Sales Volumes rose 2.1% year on year, in line with the same quarter last year
- Market Capitalization: $5.00 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The Marzetti Company’s Q2 Earnings Call
- James Ronald Salera (Stephens) asked about expectations for QSR industry traffic and menu innovation in the Foodservice segment. CEO Dave Ciesinski explained that while the environment is stable, chicken-focused operators and value offerings present growth opportunities for Marzetti.
- James Ronald Salera (Stephens) also questioned the impact of soybean oil price volatility on costs. Ciesinski and CFO Tom Pigott noted that soybean oil is about 10% of cost of goods sold, and that hedging mitigates near-term risk.
- Todd Morrison Brooks (The Benchmark Company) inquired about the drivers of higher SG&A, particularly marketing and integration costs. Pigott clarified that marketing made up about half the increase, with integration and legal expenses being more transient.
- Alton Kemp Stump (Loop Capital) asked how consumer trends may differently impact Retail and Foodservice businesses. Ciesinski said Foodservice could benefit from improved discretionary spending, while Retail remains focused on new item launches and innovation.
- Scott Michael Marks (Jefferies) sought clarification on the sustainability of increased marketing spend and future profitability in the Retail segment. Pigott stated that elevated marketing was opportunistic and margins are expected to remain flat or improve with ongoing cost savings.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will be watching (1) the nationwide rollout and consumer reception of Texas Roadhouse dinner rolls and other new retail offerings, (2) the impact of supply chain restructuring, especially the transition from Milpitas to Atlanta, on operating margins, and (3) the trajectory of consumer demand across both Retail and Foodservice segments. Continued discipline in cost management and the outcome of licensing partnerships will also serve as important markers.
The Marzetti Company currently trades at $181.76, up from $178.48 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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