Public E&S Companies Post Best Results Since 1Q/12

While the results were mixed from company to company, seven publicly reporting foodservice equipment and supplies companies reported a combined second quarter revenue gain of 4.1%, compared with 2Q/2012, the strongest increase since the first quarter of last year. Sales of the five equipment-oriented companies rose 4.7% while the two supplies oriented companies managed a 0.9% gain, following a first quarter decline. The numbers are compiled exclusively for Foodservice Equipment Reports by John Muldowney, a marketing executive at The Boelter Cos.

A major positive note, at least on the equipment side, is stronger sales from the two “spec”-market oriented companies, ITW’s Food Equipment Group and Rational North America. ITW/FEG pushed North American sales up 4%, while the company’s service revenues (not included in the combined sales) improved 5%. The recessionary European market, where Hobart is a major player, continued to plague overall results. International equipment revenues fell another 7%. Rational’s North American sales rose 10.7%, as it continues to rebound from a sales restructuring last year. (Manufacturers’ Agents for the Foodservice Industry, in its just released Business Barometer for Q2, also notes improvement in the spec markets. See related story.)

Middleby Corp.’s foodservice companies had another strong quarter with organic sales up 13.5%, following a 10.7% gain 1Q. (Results do not include residential sales from Viking Range, acquired at the end of 2012.) Manitowoc Foodservice and Standex Foodservice saw sales rise more modestly in the quarter, Manitowoc worldwide foodservice revenues rose 0.8% while Standex foodservice sales were up 2.4%.

Of the two supplies-oriented companies, Libbey Foodservice saw results improve in Q2 to a 1.8% overall gain from a 4% decline Q1, with strong gains again from the company’s Syracuse and World Tableware product lines. Carlisle’s Dinex division continues to drag down results from Carlisle Foodservice. Overall sales were off 0.8%, but a 13% decline in Dinex sales undercut a 4.1% gain from the company’s other foodservice supplies products.

The seven publicly reporting companies have now lagged the broader market MAFSI Barometer for five consecutive quarters, a distinct reversal from the period following recovery from the great recession and most of the quarters during the 2003-07 market expansion. The chain orientation of most of the seven companies, which generally boosts growth rates versus the broader market, has been mitigated by the European recession and slowing growth in Asia, as well as company-specific issues. The public companies’ exposure in international markets ranges as high as 40%. And, while the seven companies account for nearly $4 billion in combined annual foodservice E&S sales, the results at just two or three can dramatically affect the overall totals.