The Marzetti Company Q3 FY2026 earnings call

• Acquisition of BACHANZ: Successfully completed on May 1st. Pre-closing collaboration with BACHANZ team. CERCANA data for quarter ending March 31st showed BACHANZ sales growth over 25% and TDPs over 50%, became second leading retail brand. Integration plans on track, team retained in California, founder Justin Gill continuing work. • Third quarter results: Consolidated net sales down 1%, Adjusted net sales down 0.9%. Record gross profit $107.2 million, up 1.2%. Retail segment: net sales and volume down, but frozen bread brands had positive performance. Food service segment: adjusted net sales and volume up. • Supply chain and margins: Focus on supply chain productivity, value engineering, revenue management to improve margins. • Dividends: Quarterly cash dividend of $1 per share paid on March 31st, 5% increase from prior year, 63-year streak of annual dividend increases.

Consolidated net sales declined 1% to $453 million. Excluding non-core sales attributed to the Temporary Supply Agreement, Adjusted net sales decreased 0.9% to $452 million. Record third quarter gross profit of $107.2 million, an increase of 1.2%. Retail segment: net sales declined 3.2%, volume (pound shift) declined 5.6%. Frozen bread brands were a bright spot; New York bakery frozen garlic bread sales grew and increased market share, Schubert dinner rolls benefited from earlier Easter. CIRCONA scanner data: core brands and licensed items up 0.2%. Frozen garlic bread: New York bakery brand sales grew 4.4%, market share 46.7%. Frozen dinner roll: Sister Schuberts and licensed Texas Roadhouse combined grew 10.1%, market share 61%. Shelf-stable sauces and condiments: licensed Chick-fil-A sauces grew 4.4%, share up 5 basis points. Croutons: branded croutons added 40 basis points of market share, 28.5% share. Food service segment: excluding non-core TSA sales, adjusted net sales grew 1.8%, volume (pound shift) improved 0.8%.

• Fiscal fourth quarter: Expect retail sales to benefit from new product introductions including Marsetti protein ranch dressing and veggie dips, new Olive Garden zesty Italian dressing flavor, larger size bottle for Chick-fil-A avocado lime ranch dressing. Food service segment anticipates continued growth from select national chain restaurant customers. • Bachans business contribution: For fiscal fourth quarter, guide to net sales run rate moderately above the $87 million reported in calendar year 2025, with operating margin similar to Marzetti's current level. • Capital expenditures: Forecast total capital expenditures of $80 million for fiscal 26, continue to invest in cost savings projects, manufacturing improvements, and Atlanta facility. • Tax rate: Estimate tax rate for fourth quarter of fiscal 26 to be 23%.

• External factors: Monitor U.S. economic performance and consumer behavior that may impact product demand. • Input costs: Anticipate inflation to tick up, monitor macroeconomic impact of Iran war. Commodity risk management program in place, but soybean oil prices and other input costs could still impact margins. • Integration risks: Potential challenges in integrating BACHANZ, including ensuring smooth transition of team, operations, and leveraging resources effectively.

Q: Jim Solera of Stevens asked about soybean oil coverage duration and impact on margin outlook.

A: Dave said they have intermediate term coverage through end of summer, feel better positioned than 2022, food service is mark-to-market.

Q: Jim asked about protein launch scaling.

A: Dave said protein ranch SKU launched, portable cup performing best, agile innovator, size format important.

Q: Alton Stump of Loop Capital asked about retail segment volume decline reasons.

A: Dave said January-February weather, category softness in produce and refrigerated dressings, lapping pipeline build of Chick-fil-A into Club Channel and Texas Roadhouse Rolls.

Q: Alton asked about Bachans growth profile.

A: Dave said Bachans is amazing product, growing in double digits, became number two barbecue sauce, velocities high, net promoter score strong, confident in growth.

Q: Todd Brooks of Benchmark asked about club channel friction and frozen bread Easter shift.

A: Dave said in club, lapping Chick-fil-A sauce pipeline, changed to three-pack, retooled Olive Garden dressing offering; in frozen bread, New York brand growth, Sisters revenue impact, Walmart performance of Roadhouse Rolls and SKU extension plans.

Q: Scott Marks of Jefferies asked about food service side and investments.

A: Dave said food service had solid quarter, bifurcated by national account performers; on IT, legacy systems replaced, future SG&A spend modest, Bachans op margins total operating margin, conservative at onset.

Q: Dave Szczesinski closed by talking about strategic disposition, acquisition of Bachans as start of authentic flavors growth leg.