WESTERVILLE, Ohio--(BUSINESS WIRE)--August 21, 2025-- 

The Marzetti Company (Nasdaq: MZTI) reported results today for the company's fiscal fourth quarter and fiscal year ended June 30, 2025. Note that effective June 27, 2025, The Marzetti Company is the new name of the former Lancaster Colony Corporation.

Fourth Quarter Summary

   --  Consolidated fourth quarter net sales increased 5.0% to a fourth 
      quarter record $475.4 million. Excluding $12.2 million in non-core sales 
      attributed to a temporary supply agreement ("TSA") with Winland Foods, 
      Inc., consolidated net sales increased 2.3%. Retail segment net sales 
      increased 3.1% to $241.6 million. Foodservice segment net sales grew 7.0% 
      to $233.9 million on a reported basis. Excluding the non-core TSA sales, 
      Foodservice segment net sales increased 1.4%. 
 
   --  Consolidated gross profit increased $8.5 million to a fourth quarter 
      record $106.1 million. Gross profit margin improved 70 basis points to 
      22.3% driven by our ongoing cost savings programs and the benefit of a 
      more favorable volume/mix for the Retail segment. 
 
   --  SG&A expenses increased $8.9 million to $62.1 million, driven by higher 
      marketing costs as we increased investments to support the growth of our 
      retail brands. 
 
   --  Consolidated operating income declined $2.8 million to $38.9 million. 
      In addition to the net impact of the higher gross profit and increased 
      SG&A expenses, consolidated operating income includes restructuring and 
      impairment charges of $5.1 million in the current-year period versus $2.7 
      million last year. The current-year restructuring and impairment charges 
      primarily relate to our previously announced plans to close our sauce and 
      dressing facility in Milpitas, California. 
 
   --  Fourth quarter net income was $1.18 per diluted share versus $1.26 per 
      diluted share last year. Restructuring and impairment charges reduced 
      this year's fourth quarter net income by $0.15 per diluted share compared 
      to $0.08 last year. 

CEO David A. Ciesinski commented, "We were pleased to report record sales and gross profit for our fiscal fourth quarter. In the Retail segment, sales growth of 3.1% was led by expanding distribution for our popular Texas Roadhouse$(TM)$ dinner rolls and new club channel sales for Chick-fil-A$(R)$ sauce. Our category-leading New York Bakery(TM) frozen garlic bread also achieved strong volume gains in the quarter, including contributions from our recently introduced gluten-free Texas Toast. In the Foodservice segment, excluding non-core TSA sales, net sales increased 1.4% driven by inflationary pricing, increased demand from some of our national chain restaurant account customers and sales gains for our branded Foodservice products."

Fourth Quarter Results

Consolidated net sales increased 5.0% to a fourth quarter record $475.4 million versus $452.8 million last year. Retail segment net sales grew 3.1% to $241.6 million while the segment's sales volume, measured in pounds shipped, increased 2.1%. Excluding sales attributed to perimeter-of-the-store bakery product lines that we exited in fiscal 2024, specifically our Flatout(R) and Angelic Bakehouse(R) brands, Retail net sales increased 3.6% and Retail sales volume increased 2.9%. In the Foodservice segment, net sales advanced 7.0% to $233.9 million. Foodservice segment sales include $12.2 million in non-core sales attributed to a TSA with Winland Foods, Inc. that commenced in March 2025 for a period of up to twelve months. The TSA was made in connection with our acquisition of the Winland Foods sauce and dressing production facility located in Atlanta, Georgia. The acquisition was completed in February 2025. Excluding the non-core TSA sales, Foodservice segment net sales improved 1.4% including the benefit of inflationary pricing as the segment's sales volumes, measured in pounds shipped, declined 1.7%.

Consolidated gross profit increased $8.5 million to a fourth quarter record $106.1 million driven by our cost savings programs and the benefit of a more favorable volume/mix for the Retail segment. Gross profit margin increased 70 basis points to 22.3%.

SG&A expenses increased $8.9 million to $62.1 million, driven by higher marketing costs as we invested to support the growth of our retail brands. SG&A expenses also reflect increased investments in personnel along with $0.5 million in incremental costs attributed to the sauce and dressing plant acquisition.

Restructuring and impairment charges of $5.1 million in the current-year quarter include $4.5 million in charges attributed to the planned closure of our sauce and dressing facility in Milpitas, California as part of our ongoing initiative to better optimize our manufacturing network. The $4.5 million consists of impairment charges for personal property and operating lease right-of-use assets; one-time termination benefits; and other costs associated with the pending closure. Production at the facility is expected to conclude during the quarter ending September 30, 2025. In the prior-year quarter, restructuring and impairment charges of $2.7 million were attributed to our decision to exit our perimeter-of-the-store bakery product lines.

Consolidated operating income declined $2.8 million to $38.9 million as impacted by the higher SG&A expenses and the $2.4 million increase in restructuring and impairment charges, partially offset by the higher gross profit.

Net income decreased $2.3 million to $32.5 million, or $1.18 per diluted share, versus $34.8 million, or $1.26 per diluted share, last year. In the current-year quarter, the restructuring and impairment charges reduced net income by $4.0 million, or $0.15 per diluted share. Incremental SG&A expenditures attributed to the sauce and dressing plant acquisition reduced net income by $0.4 million, or $0.01 per diluted share. In the prior-year quarter, restructuring and impairment charges reduced net income by $2.1 million, or $0.08 per diluted share.

Fiscal Year Results

For the fiscal year ended June 30, 2025, net sales increased 2.0% to $1.91 billion compared to $1.87 billion a year ago. Net income for the fiscal year totaled $167.3 million, or $6.07 per diluted share, versus the prior-year amount of $158.6 million, or $5.76 per diluted share. The fiscal 2025 results include a noncash settlement charge attributed to the termination of the company's legacy pension plans that reduced net income by $10.8 million, or $0.39 per diluted share. In addition, the fiscal 2025 results account for restructuring and impairment charges that reduced net income by $4.0 million, or $0.15 per diluted share, and incremental SG&A expenditures attributed to our acquisition of the Atlanta-based sauce and dressing production facility that reduced net income by $2.9 million, or $0.11 per diluted share. In fiscal 2024, restructuring and impairment charges reduced net income by $11.4 million, or $0.42 per diluted share.

Fiscal 2026 Outlook

Mr. Ciesinski commented, "Looking ahead to fiscal 2026, we anticipate Retail segment sales will continue to benefit from volume growth, with contributions from both our licensing program and our Marzetti(R) , New York Bakery(TM) , and Sister Schubert's(R) brands. In the Foodservice segment, we expect sales to be supported by select quick-service restaurant customers in our mix of national chain restaurant accounts, while external factors, including U.S. economic performance and consumer behavior, may impact demand. With respect to our input costs, in aggregate we anticipate a modest level of inflation in fiscal 2026 that we plan to offset through contractual pricing and our cost savings programs as we remain focused on continued margin improvement in the year ahead."

Conference Call on the Web

The company's fourth quarter and fiscal year-end conference call is scheduled for this morning, August 21, at 10:00 a.m. ET. Access to a live webcast and subsequent replay of the call is available through a link on the company's website at investors.marzetticompany.com.

About the Company

The Marzetti Company is a manufacturer and marketer of specialty food products for the retail and foodservice channels.

Forward-Looking Statements

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). This news release contains various "forward-looking statements" within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "believe," "intend," "plan," "expect," "hope" or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:

   --  efficiencies in plant operations and our overall supply chain network; 
 
 
   --  price and product competition; 
 
   --  the success and cost of new product development efforts; 
 
   --  the lack of market acceptance of new products; 
 
   --  changes in demand for our products, which may result from changes in 
      consumer behavior or loss of brand reputation or customer goodwill; 
 
   --  the impact of customer store brands on our branded retail volumes; 
 

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