In anticipation of the proceeds from the deal, we will immediately put this capital to work for our shareholders. Combined with our ongoing share repurchase program, we reduced our overall share count in 2025 by approximately 9% through $710 million in buybacks, one of the most aggressive capital return programs in our industry. This reflects our conviction that Middleby shares remain significantly undervalued relative to our earnings power and growth prospects. Each business will emerge with enhanced focus, optimized capital structures, and the resources to maximize growth in their respective markets.

Turning to our fourth quarter results, our total revenue of approximately $866 million for our remaining two segments exceeded our expectations. Through a combination of these operational results and the substantial share repurchases we made in 2025, this translated to adjusted EPS of $2.14 for the quarter and $8.39 for the full year. For today's discussion on segment-level results and trends, I will be discussing the Commercial Foodservice results and outlook. Starting with Commercial Foodservice, we generated revenue approximately $602 million, which exceeded our expectations during the fourth quarter.

The outperformance was driven primarily by the general market with our dealer partners, which had double-digit growth in the quarter. We attribute the second half momentum to improved demand with independents and in the institutional market, along with continued growth with emerging chains. We have seen our customers address menu pricing, return to limited time offers, and launch new beverage programs to reposition against the challenging backdrop with a focus to drive customer traffic. Our guidance assumes a relatively consistent environment relative to what we are currently experiencing as we await larger chain customers to firm up their plans for the year, particularly in the second half.

What went well
  • Total revenue of approximately $866 million for the two remaining segments exceeded expectations, driving adjusted EBITDA of approximately $197 million, adjusted EPS of $2.14 for the quarter, and $8.39 for the full year.
  • Completed the sale of a 51% stake in the Residential Kitchen business to 26North at an $885 million total enterprise valuation, delivering approximately $565 million in immediate cash proceeds while retaining a 49% ownership stake.
  • Commercial Foodservice revenue of approximately $602 million exceeded expectations, with double-digit general-market growth through dealer partners and an EBITDA margin over 26%.
  • Food Processing posted a record backlog, with fourth-quarter orders reaching $322 million (up about 66%) and backlog growing to $410 million (up about 36%).
  • 2025 share repurchases totaled $710 million (4.9 million shares at about $144.50), reducing the share count approximately 9%, one of the most aggressive capital-return programs in the industry.
What went wrong
  • Continued declines among large QSR and C-store customers, who faced lower traffic and cost pressures throughout 2025.
  • Food Processing organic revenue growth was only 1.3%, and margins were impacted by tariffs, higher costs, and order-timing disruption to production efficiencies.
  • Tariffs had an adverse net EBITDA impact of approximately $7 million in the fourth quarter, with margin dilution expected to continue in the first half of 2026.
  • The maturity of the 1% convertible notes raised interest expense by roughly $6 million a quarter, a $0.12 headwind to fourth-quarter earnings and about $0.34 for full-year 2026.

Guidance Changes

MetricPeriodCurrent guidance
Total revenueFY2026$3.27B to $3.36B (initial full-year outlook (Commercial Foodservice $2.37B to $2.43B, Food Processing $895M to $925M))
Adjusted EBITDAFY2026$745M to $780M (initial full-year outlook (Commercial Foodservice $632M to $658M, Food Processing $186M to $208M))
Adjusted EPSFY2026$9.20 to $9.36 (initial full-year outlook, reflecting buyback benefit from residential sale proceeds)
Total revenueQ1 2026$760M to $788M (new quarterly outlook (Commercial Foodservice $560M to $578M, Food Processing $200M to $210M))
Adjusted EBITDAQ1 2026$161M to $173M (new quarterly outlook)
Adjusted EPSQ1 2026$1.90 to $2.02 (new quarterly outlook, assuming approximately 47.7 million weighted average shares)

Performance Breakdown

MetricYoYNote
Commercial Foodservice revenue approximately $602 million general-market, institutional, and emerging-chain strength offset by large QSR and C-store declines
Food Processing revenue organic growth of 1.3% to approximately $265 million improvements in international markets, with strong late-year order momentum
Commercial Foodservice EBITDA margin over 26% would have exceeded 27% if not for tariff impacts
Total company adjusted EBITDA approximately $197 million top-line outperformance across both remaining segments
Adjusted EPS $2.14 for the quarter, $8.39 full year operational results plus substantial 2025 share repurchases

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Residential Kitchenunder strategic review with a $709 million impairment recorded51% stake sold to 26North, treated as discontinued operations and excluded from adjusted results going forward
QSR demandchallenged by lower traffic and cost pressuresstill challenging but customers are addressing menu pricing, returning to limited time offers, and launching beverage programs heading into 2026
Food Processing spin-offtargeted for first half of 2026on track for completion by the end of the second quarter, with a registration statement expected in April and Mark Salman named CEO of the SpinCo
Ice and beverage platforma targeted growth areagenerating early traction with some of the largest customers as a significant growth opportunity

Q&A Summary

How much of the better-than-guided Commercial Foodservice quarter was a normal fourth-quarter dealer stocking dynamic versus real momentum?
Tim FitzGerald and Steve Spittle said it was not the historical year-end stocking behavior but genuine share gains and improved replacement demand; the dealer strength came from getting partners to package Middleby ice, TurboChef, Invoq Combi, and coffee into full solutions rather than buying inventory to chase incentives.
Regarding the roughly $74 million of incremental 2026 tariff drag, how does it split between the segments and how confident are you in offsetting it?
Steve Spittle said about two-thirds to 70% of the impact is in Commercial Foodservice given its larger Asian supply base; July 1 and January 1 pricing should cover the tariffs, with a timing drag in the first quarter improving through the year.
Did the QSR CapEx strike in the fourth quarter linger, and what are chains saying about store openings?
Tim FitzGerald and Steve Spittle said operator confidence is increasing and should spur the replacement cycle, though some chains remain on a CapEx strike and new-store builds are still being pushed out; the focus has shifted to replacement and adding beverage day parts to existing footprints.
Why does the eye-popping 66% Food Processing order growth not drop through more to revenue?
Mark Salman and Bryan Mittelman said the strength is driven by Total Line Solutions and a rebalancing of first-half slowness, but many of those orders carry a longer delivery tail, supporting a confident growth year.
How much of the 36% Food Processing backlog growth is deliverable this year?
Bryan Mittelman said a significant majority is deliverable in 2026, with a minority portion rolling into the beginning of 2027.
What is the capital allocation and M&A view for the core Commercial Foodservice segment once the split is done?
Tim FitzGerald said Commercial Foodservice will focus on share repurchases and organic growth, targeting beverage, technology, automation, and IoT, while the larger M&A opportunity sits within Food Processing.
Is the positive Commercial Foodservice 2026 guide predominantly pricing driven, and when do volumes recover?
Tim FitzGerald said it is not all pricing; the company expects organic growth as the market stabilizes and from significant ice and beverage share opportunities where Middleby is still effectively a new entrant.

More on MIDDLEBY Corp

Reported 2026-02-26 · figures from the MIDDLEBY Corp Q4 2025 earnings call.

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