Middleby Q3 2026 Sales Hit Record, Adjusted EPS Rises 19%

Middleby Corporation (NASDAQ: MIDD) reported record quarterly net sales for the third quarter of 2026, with broad-based commercial foodservice demand lifting revenue 7.7% and adjusted earnings per share 19%. The equipment maker also issued full-year guidance that, at the midpoint, calls for 7.5% sales growth and 18.1% adjusted EPS growth.

Net sales reached $652.6 million, up from $606.0 million a year earlier and above the company’s guidance range of $620 million to $640 million. Organic net sales also increased 7.7%.

Adjusted EBITDA rose 9.6% to $155.8 million, exceeding the guided range of $143 million to $150 million. The adjusted EBITDA margin expanded to 23.9% from 23.5%, or to 24.3% from 24.0% when excluding the brewing businesses. Middleby attributed the earnings growth to higher volumes, operational initiatives and tariff refunds, partly offset by a less favorable sales mix and inflation-related pressures.

Adjusted EPS increased to $2.07 from $1.74, surpassing the company’s $1.67-to-$1.83 guidance range. Middleby said the improvement primarily reflected higher revenue and share repurchases. Gross profit rose 4.9% to $249.7 million, although gross margin declined to 38.2% from 39.3%.

Operating income, excluding brewing-related closure costs, was $124.6 million, compared with $123.8 million a year earlier. Net earnings on the same adjusted basis were unchanged at $79.0 million.

International markets and new products support growth

Sales increased across Middleby’s reported regions. Revenue in the U.S. and Canada, which represented 70% of third-quarter sales, rose 5.0% to $455.6 million. International revenue advanced 14.3% to $197.0 million.

Latin America posted the strongest percentage increase, with sales up 64.2% to $37.9 million. Asia grew 15.1% to $62.0 million, while Europe and the Middle East increased 1.9% to $97.1 million.

The company said commercial foodservice growth remained broad-based across channels and geographies. Quick-service restaurant customers adopted new products connected with menu expansion, while the U.S. dealer channel remained steady against double-digit growth in the second half of 2025. Replacement demand increased among institutional customers and emerging restaurant chains.

Brewing exit advances margin plan

Middleby recorded $25.9 million of third-quarter costs related to closing its brewing businesses, including $20.0 million of non-cash impairments, $5.5 million of other non-cash asset write-downs and $400,000 of severance costs. The exit covers SS Brewtech, Deutsche Beverage and Wild Goose and is expected to be completed by the end of 2026.

Those operations generated about $16 million in revenue and an adjusted EBITDA loss of approximately $5 million through the first nine months of 2026. Middleby expects the exit to provide a full-year margin benefit in 2027 as the associated revenue and losses leave its results.

The closure is part of a broader plan to expand adjusted EBITDA margin by 200 to 400 basis points between 2025 and 2028, from approximately 23% to 25%-27%. The company expects more than 160 basis points of improvement from the brewing exit and operational initiatives at Pitco and Taylor. Management estimates that about 80% of the margin plan depends on measures within the company’s control, with the remainder tied to growth and operating leverage.

Other planned actions include supply-chain changes, facility consolidations, SKU rationalization, lean manufacturing programs and returns from $35 million of strategic investment. Middleby’s three-year targets call for organic net sales compound annual growth of 3%-6%, adjusted EBITDA growth of 6%-9% and adjusted EPS growth of 10%-15% through 2028.

Q4 and full-year outlook

For the fourth quarter, Middleby expects net sales of $621 million to $635 million, adjusted EBITDA of $149 million to $153 million and adjusted EPS of $1.76 to $1.92. At the midpoint, those ranges represent growth of 4.4%, 7.9% and 20.9%, respectively, from the fourth quarter of 2025.

The outlook assumes continued new-product adoption, primarily among chain customers, along with improving replacement-equipment demand. Management expects margins to increase sequentially from the third quarter as operational improvements and pricing implemented on Aug. 1 offset additional inflationary costs related to global macroeconomic conditions.

For full-year 2026, the company forecasts net sales of $2.519 billion to $2.534 billion, adjusted EBITDA of $589 million to $593 million and adjusted EPS of $7.13 to $7.29. The adjusted EPS forecasts for both the fourth quarter and full year assume $100 million of fourth-quarter share repurchases.

Middleby repurchased $672 million of stock through the first nine months of 2026, representing about 10% of shares outstanding. It bought approximately 1 million shares during the third quarter and another 700,000 shares through the reported portion of the fourth quarter. Net leverage stood at 2.8 times trailing 12-month adjusted EBITDA.

The company also completed a five-year, $3.0 billion senior secured credit agreement consisting of a $1.0 billion term loan and a $2.0 billion revolving facility, both maturing in November 2031. Middleby said outstanding debt would remain consistent following the refinancing.

Middleby identified inflation, financing costs, customer concentration, foreign exchange and political exposure, competitive pricing, raw-material availability and the timing and financial effects of the brewing exit among the factors that could cause actual results to differ from its outlook.