Foodservice Equipment Reports

Chain Slowdown Undercuts Public E&S Companies Revenues

A slowdown in sales to both restaurant and retail chains, combined with divestitures, undermined revenue growth for publicly reporting foodservice equipment and supplies companies in the third quarter of 2016. Compared to the same quarter in 2015, combined sales for the eight companies fell 0.4%. The six equipment-oriented companies were off 0.4% and the two supplies-oriented companies were down 0.5%. The numbers are compiled for FER Fortnightly by John Muldowney, principal at Clarity Marketing.

The slowdown in chain buying, combined with mergers in the retail space, negatively affected Standex Foodservice, which saw 3Q/16 sales fall 13.6%; Middleby Corp., where organic foodservice market sales were down 1.1%; and Manitowoc Foodservice, which was down 9.7%. Manitowoc said divestitures were the major factor in the decline as organic sales rose 1.4%. Middleby’s revenues rose 14% thanks to the Follett acquisition earlier this year.

Spec-oriented equipment companies did somewhat better in the quarter. Rational America’s sales rose 15% as the company continued to benefit from a sales restructuring and the introduction of a new small combi. Sales at ITW Food Equipment Group rose an estimated 3% while estimated revenues for Unified Brands were up 0.1%.

Sales trends were also negative at Libbey Foodservice, with sales for the quarter off 1.5% though the company said the decline was mostly a matter of a shifting product mix as unit shipments were positive. Libbey also said that slowing sales to restaurants was partially offset by growing sales to institutional markets. Sales at Carlisle Foodservice rose 1.4%.

For the first nine months of 2016, combined sales for the eight companies are up only 0.7% with the six equipment companies up 0.3% and the two supplies companies posting a 3.2% increase.

The sluggish growth of the publicly reporting companies is in contrast to data from the quarterly MAFSI Business Barometer. Reps have reported average sales growth just shy of 5% for the past four quarters.

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