The Marzetti CompanyFull report →1 / 15
MZTINASDAQThe short version

The Marzetti Company

The Marzetti Company makes salad dressings, sauces and frozen breads for US grocers and restaurant chains, earning $1.91 billion of fiscal 2025 net sales from two segments that share fourteen plants and one customer list.

Three decades of compounding carried the shares from $6.25 in January 1990 to a $207.39 close in November 2022. They closed at $110.19 on 28 July 2026, down 37% in six months.
Mkt cap $3.0BNet cash $218.4MEV $2.8BP/E FY25 18.2×
$110.19
Close, 28 July 2026
$1.91bn
FY2025 net sales
29%
Of sales tied to one restaurant chain
63
Straight years of dividend increases
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Snapshot

The Marzetti Company in numbers

Price
$110.19as of 2026-07-28
Mkt cap
$3.0B
Net cash
$218.4M
EV
$2.8B
12m perf
−39.2%
3m ADV
$38.4M
Year to Jun (USD)202320242025
Sales1.8B1.9B1.9B
EBITDA192.7M255.3M282.5M
EBIT141.5M199.4M220.3M
EBIT margin7.8%10.7%11.5%
EPS4.045.766.07
EV/EBITDA14.5×11.0×9.9×
EV/EBIT19.8×14.0×12.7×
P/E27.3×19.1×18.2×
FCF yield4.5%6.1%6.7%
Gearing––−16.2%
Derived from run data; ratios use the latest price.
IThe business
What it sells

Half branded groceries, half private-label sauce made for restaurant chains

FY2025 net sales by segment
Fiscal year ended 30 June 2025. Most plants make product for both segments.
  • Retail. Marzetti dressings, New York Bakery garlic bread and Sister Schubert's rolls, sold alongside sauces made under exclusive licence from Chick-fil-A, Olive Garden, Buffalo Wild Wings, Subway and Texas Roadhouse.
  • Foodservice. Custom-formulated sauces and frozen breads sold under private label to national chain restaurants, largely through distributors. National accounts were $693.6m of the segment in FY2025.
  • Domestic and asset-heavy. Over 95% of sales are made in the United States, out of fourteen food plants, with no fixed assets abroad. There is no currency exposure to disentangle.
Unit economics

Retail earns 21 cents of operating profit on the dollar; Foodservice earns 12

FY2025, share of segment net sales
LineRetailFoodservice
Gross margin30.2%16.8%
Selling, general and admin9.1%4.5%
Operating margin21.1%12.3%
Segment operating income$211.7M$111.6M
FY2025 segment note; $97.9m of unallocated corporate expense sits outside both columns.
  • The gap is structural. A private-label maker buys no shelf space and runs no advertising, so half the 13.4-point gross-margin gap comes back on the expense line. An 8.8-point operating gap remains.
  • Corporate overhead is real money. $97.9m of unallocated expense and $5.1m of restructuring charges stood between $323.3m of segment profit and the $220.3m the company reported.
  • One customer list, sold twice. Foodservice supplies the chains; those same relationships are where the retail brand licences come from, which is why its customer list matters more than its margin.
Market position

Category leader in three small aisles, a challenger in the two largest

Retail scan dollars by category ($M)
Circana, Total US Multi-Outlet, 52 weeks to 29 June 2025, from the company's own investor deck.
  • The mechanism. Marzetti makes a chain's sauce, and that manufacturing relationship earns it the recipe and the standing to license the chain's brand into the grocery aisle. Six licensors now run through it.
  • Share, not tailwind. Its brands hold about 23.5% of a $5.92 billion scan base: 81.6% of produce dip and 42.4% of frozen garlic bread, against 6.5% of the $2.6 billion pourable dressing category.
  • No rising tide. On the company's own Circana benchmark, all seven packaged-food peers lost branded volume over calendar 2021 to 2024 while Marzetti compounded volume at 5.4% a year.
IIThe record
Where growth came from

One restaurant relationship supplied most of five years of sales growth

Chick-fil-A-attributed net sales by leg ($M)
The combined total is disclosed ($548.2m in FY2025); the split between legs is derived from the disclosed percentages, each carrying about $10m of rounding tolerance.
  • Fourteen per cent to 29%. Chick-fil-A-attributed sales reached $548.2m in FY2025 — about $335m of the $575m by which total net sales grew over five years. Walmart moved from 18% to 19% across the same span.
  • Two different mechanics. The 21-point Foodservice supply leg carries no long-term purchase commitment; the retail leg rests on a fixed-term brand licence, terminable or not renewed at the licensor's option on short notice.
  • The supply leg has flattened. $364.5m, $393.1m, $400.9m across FY2023 to FY2025, while the retail licence carried the growth from a rounding error to $147.3m.
Margins

Margins collapsed in 2022 and have spent three years climbing back

Gross and operating margin, as reported
Fiscal years to 30 June; FY26 9M is the nine months to 31 March 2026.
  • The 2022 break. Commodity and freight costs ran ahead of pricing, gross margin fell 520 basis points in a year and operating margin went from 12.7% to 6.7%. Three years have retraced about three-quarters of it.
  • Eleven straight quarters. The gross-margin gain now comes from a productivity programme targeted at roughly $20m of cost a year — procurement, manufacturing, value engineering — with the commodity windfall long gone.
  • Overhead is taking the gain. Selling and administrative expense rose 7.2% over the nine months to March 2026 against 2.2% sales growth, absorbing 88% of the gross-profit gain against 52% across FY2025.
The statements

Record earnings, converting to cash that covers the dividend twice over

FY2020 → FY2025as reported · $
Revenue$1.9B+2%
Gross margin23.9%+0.8pp
Operating margin11.5%+0.9pp
Net income$167M+6%
EPS$6.07+5%
Free cash flow$203M+11%
Open the full statements →
Fiscal years to 30 June, as reported. The June 2026 year had not been filed as at 29 July 2026.
  • The record, in context. FY2025 diluted EPS of $6.07 is a high, but only 22% above FY2020's $4.97 on 7.4% annual sales growth. Share count is unchanged at 27.5m, so the gap is margin, not buybacks.
  • Cash. Operating cash flow of $261.5m against $58.0m of capex left $203.5m of free cash flow in FY2025, twice the $103.5m dividend. Conversion eased from 2.03 times net income in FY2023 to 1.56 times.
  • The balance sheet, until April. No debt in any of the three reported years and $218.4m of cash at 31 March 2026, behind 63 consecutive years of dividend increases at a $4.00 annual rate.
IIIThe story now
What repriced

The multiple fell much further than the earnings did

Trailing P/E at each 30 June
The 2026 reading uses the 28 July close against trailing twelve-month EPS of $6.39; the 2022 and 2023 bars are lifted by that period's depressed earnings, not by price.
  • Six months, 37%. The shares fell from $173.91 on 2 February 2026 to $110.19 on 28 July, with the largest single-day breaks on the second-quarter print, the third-quarter print and 14 July.
  • Earnings did not break with it. Nine-month EPS of $5.21 was 6.5% ahead of the prior year, gross margin was still expanding and Foodservice operating income rose 19.6%. Operating margin slipped to 12.4% from 12.7%.
  • The group moved too. Marzetti's packaged-food comparables de-rated a year earlier; measured from the end of 2024, its 36% decline sits in the middle of that set rather than apart from it.
The branded half

Shipments turned negative while the licensed sauces kept selling

Retail shipments versus consumption, FY2026
Year-on-year change; shipments from the FY2026 Forms 10-Q, scan sales from management's Circana commentary.
  • A distribution reset, on the evidence. Club-channel placements that added shipments in the first half were subtracting them by the third quarter. A gap between pounds and consumption reverses when it laps; a demand decline does not.
  • Consumption is the more durable signal. Chick-fil-A sauce scan growth decelerated from 9.6% to 4.4% on a base that is now national, while the categories themselves ran between plus 0.2% and minus five points.
  • The counterweight. Retail operating income still rose 3.4% to $47.1m in the March quarter on sales down 3.2%, on cost savings and pricing. A business losing a licence does not look like that.
The acquisition

$400 million for an $87 million brand, on the first debt this balance sheet has carried

Year-one pre-tax effect of the Bachan's purchase ($M)
Derived from management's guidance and the disclosed debt cost. Purchase accounting, and the amortisation it fixes, will not be filed until the FY2026 Form 10-K.
  • The price. 4.6 times sales, against about 1.6 times for Marzetti's own equity. Funded with $200m of cash and a $200m term loan drawn on 29 April 2026, amortising at $2.5m a quarter to April 2031.
  • The record it is priced against. Acquired intangibles fell from $65.2m at June 2020 to nil by June 2024 — every branded deal of the prior decade written off, at $2.17 a share of disclosed exit cost.
  • The case for it. Bachan's net revenue compounded at 48% a year over three years, it is a shelf-stable sauce sold through channels Marzetti already serves, and an owned brand cannot be withdrawn by a licensor.
IVThe price
Valuation

At $110 the price embeds roughly 2.5% growth forever

Value per share by perpetual growth rate
Consensus FY2026 free cash flow of $197.8m on 27.4m shares, discounted at 9%. A boundary, not a valuation.
  • What you are paid to wait. A 3.6% dividend — roughly double the 1.52% to 2.45% band of the nine years to FY2025 — and a 6.5% free cash flow yield, with the payout at a little over half of that cash.
  • The ratios. 17.2 times trailing earnings, 16.3 times the FY2026 consensus and 15.3 times FY2027, on a panel of four to six contributing analysts. Both years have been trimmed in the last ninety days.
  • Not an asset play. Tangible book value is near $30 a share, about 27% of the price, and the Bachan's purchase will add a large intangible balance when the allocation is filed.
Downside

The exposure that would do the most damage is not discounted

FY2027 earnings and value under a licence loss
CaseFY2027 EPSAt 12xAt 15x
Consensus base$7.22$87$108
Retail licence lost$6.34$76$95
Whole relationship lost$4.93$59$74
Derived from FY2025 segment margins applied to each leg, a 22% tax rate and 27.4m shares.
  • What sits behind the 29%. Applying segment margins puts roughly $31m of operating income behind the retail licence and $49m behind the supply leg — about a quarter of total segment operating profit.
  • The estimates err in both directions. The $97.9m of corporate expense would not leave with the sales, which flatters these figures; a manufacturer would also cut cost against a loss of that size, which does not.
  • Solvency is a separate question. Consensus has FY2026 net debt at $62m against $304m of EBITDA — 0.20x against a 3.5x covenant. EBITDA would have to fall roughly 94% before that test binds.
The street

A $159 target from five analysts, against estimates they keep trimming

$159
Consensus target priceTwo buy, three hold
15.3x
P/E on FY2027 consensus17.2x trailing
3.6%
Dividend yield63rd consecutive increase
−3.8%
FY2026 EPS estimate, 90 daysFY2027 cut 1.8%
Consensus and ratings as at 29 July 2026; no filing page backs these figures.
  • The panel is thin and inconsistent. Three to six analysts contribute to any line, and the annual and quarterly panels imply June quarters $15.4m apart on revenue and $0.13 apart on earnings.
  • The cuts followed the print. The May third-quarter release delivered $1.35 against a consensus then standing at $1.57. The ninety-day revisions came after it rather than before.
  • What FY2027 assumes. Consensus of $7.22 is 9.2% above the run-rate construction, and with the acquisition close to earnings-neutral in year one, nearly all of it has to come from the base business.
What to watch

A durable cash generator that has stopped compounding, at a price that asks only that it not shrink.

Read the full report →

This distils a guided study built chapter by chapter — the business and the de-rating, the licensing engine, the foodservice half, financials and estimates, margins, categories, the acquisition, ownership and pay, and valuation.

Compiled from the full report · 2026-07-29 · For information, not investment advice.