Public E&S Companies See Organic Sales Flat In Third Quarter

The eight publicly reporting foodservice equipment and supplies companies for the most part continued to post very slow revenue growth in the third quarter. Combined revenues for the group rose only 0.2% on an organic basis in the third quarter versus the same quarter last year. And for the nine months ending in September, revenue was dead flat organically with the same period last year. With the effect of acquisitions included, combined sales for the eight rose 3.8% in the third quarter and 5% for the nine months. The numbers are compiled by FER Research Associate John Muldowney, who is also principal at Clarity Marketing.

The six equipment-oriented public companies combined sales rose only 0.5% organically in the third quarter and were flat for the nine months. With acquisitions, sales rose 2.4% in the quarter and 3.5% for the nine months.

Welbilt and Middleby continue to be affected by chains’ negative same-store sales and traffic. It has led many of their big customers to put off roll-outs and replacement. Welbilt’s third-quarter sales fell 0.9% versus last year, with sales in the Americas down 4.3%. Middleby, while up 7% in the quarter including acquisitions, saw organic sales rise only 0.9%. ITW’s Food Equipment Group had a surprisingly weak quarter with sales down an estimated 6%. Standex Foodservice had a strong quarter, as its refrigeration business recovered from last year’s retail chain cuts; sales rose 11.2% organically in the quarter. Unified Foodservice saw sales rise only 1%. And Rational Americas continues to benefits from a sales restructuring: sales rose 29.7% in the quarter and are up 33.2% for the nine months.

On the supplies side, Libbey and Carlisle reported combined sales fell 2.4% organically for the quarter and are also flat for the nine months. With the San Jamar acquisition included, the two companies were up 16.2% for the quarter and 17.1% for the nine months. Libbey said foodservice sales were off 6.3% in the quarter, as casual dining and other full-service operators continue to experience negative traffic and sales trends. Libbey was off 3.1% for the nine months. Carlisle Foodservice saw a 1.3% gain in organic sales in the quarter and were up 3.2% for the nine months. With the San Jamar acquisition included, Carlisle FS saw sales rise nearly 38% for both the quarter and the nine months,

The flat sales of the public companies contrast with moderate gains in the MAFSI Business Barometer so far in 2017. While we are awaiting third-quarter Barometer numbers, MAFSI’s reps said sales were up 3.3% in the first quarter and 3.5% in the second, versus the same periods last year. And as the accompanying article states, they are moderately optimistic about sales in 2018.