E&S Public Companies Report Second Consecutive Quarter Of Sales Growth

Blended sales of seven large publicly traded foodservice equipment and supplies companies rose 6.7% in the third quarter versus the third quarter in 2009. It was the second consecutive quarter of growth following six quarters of falling blended sales.

The sales rebound was once again led by the more chain- oriented conglomerates, Manitowoc Foodservice and Middleby Corp., which reported revenues rose 9.2% and 10.7% respectively in the third quarter versus year prior. Both companies also had strong sales gains in the second quarter.

But all seven publics reported growth or at least flat sales in the quarter, including the spec-oriented ITW Food Equipment Group and both Libbey and Carlisle, the two supplies-oriented companies we follow. Chain operators typically purchase equipment first coming out of a downturn, while spec markets can lag by as much as one to two years. Supplies purchases are typically a closer reflection of operator sales and volume. The MAFSI Barometer, a broader measure of market sales, also improved in the third quarter, but remained negative at -1.5%.

Blended sales for the five equipment-oriented companies rose a strong 8.1%, while the two supplies companies showed individual and combined growth of 1.6%. For the first nine months of ’10, overall sales are up 4.1%, with equipment-oriented sales up 6% and supplies still negative at -3.2%.

All the companies are benefiting from easy comparisons. Sales of the public companies bottomed out in the third quarter ’09; the seven companies’ blended sales fell 18.9% in the quarter. Still, with two quarters of increases under their belt, it appears the recovery has begun.

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