MIDD

• Portfolio Transformation Completion

  • Early 2025, Middleby began separating its three core businesses to unlock shareholder value and position each for long-term growth.
  • Q1 2026, the company sold a controlling stake in its residential kitchen business to 26 North; completed the spinoff of the food processing business into standalone public company Madeira on July 6, 2026, marking full completion of the transformation.
  • Middleby now operates as a focused, innovation-leading commercial food service solutions provider.

• Capital Return and Allocation

  • Over the past six quarters, Middleby returned $1.3 billion to shareholders via share repurchases, including $200 million in Q2 2026, reducing outstanding share count by 16%.
  • In Q2 2026, the company repurchased 1.4 million pre-spin shares (3% of outstanding shares) for an average price of $142 per share.
  • Post-spinoff, the primary use of excess capital in H2 2026 will be debt pay down to reduce leverage.

• Q2 2026 Operational Performance

  • CFS delivered 8% organic year-over-year revenue growth, the second consecutive quarter of positive organic growth in a challenging macro environment, with broad-based growth across channels, customer types, and geographies (both North America and international markets).
  • Growth was particularly strong from chain customers, dealer partners in the general market, and the relatively new ice and beverage platform, which had better-than-expected demand. The ice and beverage segment has a large pipeline of projects set to launch in 2027.
  • Adjusted EPS growth was driven by organic growth, 2025 and 2026 share repurchases, and proceeds from the residential business transaction, partially offset by higher interest costs and an increased tax rate from discrete items.
  • Q2 CFS margins were below expectations, with a total 100 basis point margin headwind: driven by 150 basis points of drag from ramping new ice and beverage product production (the segment runs 400 basis points lower margins than the mature cooking platform), faster-than-expected inflation in ocean freight and steel costs, partially offset by a $5 million tariff refund.

• Ongoing Strategic Initiatives

  • Multi-year go-to-market investments have positioned Middleby as a closer strategic partner to customers, gaining traction across all markets.
  • Operational improvement initiatives (product simplification, lean manufacturing, mixed profitability optimization) are in early stages and expected to drive margin expansion over the next several years.

• Full-year 2026 post-spin guidance:
  • Revenue: $2.48 billion to $2.53 billion, representing ~7% organic year-over-year growth, an upward revision from the prior 4-6% organic growth target.
  • Adjusted EBITDA: $572 million to $588 million.
  • Adjusted EPS: $6.73 in the projected range.
• Q3 2026 post-spin guidance:
  • Revenue: $620 million to $640 million, representing ~4% organic year-over-year growth.
  • Adjusted EBITDA: $143 million to $150 million.
  • Adjusted EPS: $1.67 to $1.83, based on 45.2 million weighted average diluted shares outstanding.
• Leverage guidance: Management expects to delever to ~2.5x by the end of 2026.
• Margin guidance: While inflation and ice and beverage investment will pressure margins through H2 2026, management expects sequential margin improvement from Q2 to Q3 to Q4, driven by ongoing operational initiatives, slowing margin drag from ice and beverage ramp-up, and pricing benefit starting in Q4 2026.
• Long-term three-year targets (reaffirmed from May 2026 Investor Day): 3-6% net sales organic growth, 6-9% adjusted EBITDA growth, and 10-15% adjusted EPS growth.

Middleby completed the spinoff of its food processing segment (now standalone publicly traded company Madeira) on July 6, 2026, so food processing results are included in Q2 2026 continuing operations and will be classified as discontinued operations starting Q3 2026. The only remaining operating segment is Commercial Food Service (CFS):

• Q2 2026 CFS revenue: $631 million, with 8% organic year-over-year growth, marking the second largest revenue quarter in CFS history.
• Consolidated total company adjusted EBITDA for Q2 2026: $193 million.
• Consolidated adjusted EPS from continuing operations: $2.35; post-spin adjusted EPS (excluding food processing) for Q2 2026: $1.74, up from $1.40 year-over-year.
• Q2 2026 operating cash flow: ~$100 million; free cash flow: ~$89 million.
• End-of-Q2 leverage ratio: 2.4x; pro forma leverage after the Madeira spinoff: 2.7x.

• Challenging macroeconomic industry backdrop: QSR segment traffic remains weak, and some larger chains have pushed out unit growth plans modestly, which impacts near-term demand.
• Accelerated unexpected inflation: Incremental inflationary margin pressures of $10 million to $15 million are expected for the remainder of 2026, above prior forecasts, driven by higher ocean freight and steel costs.
• Near-term margin drag from ice and beverage expansion: Ramping production for new 2027 product launches creates near-term margin pressure, as the segment currently runs 400 basis points lower margins than mature cooking equipment businesses, while investments in R&D and production capacity are ongoing.

Q: With strong year-to-date growth and a choppy macro, why is organic growth expected to moderate in H2, and what is driving sequential margin improvement? / A: H2 growth moderation primarily reflects tougher annual comparisons after double-digit dealer channel growth in H2 2025; growth remains positive and broad-based. Sequential margin improvement will come from reduced ice and beverage ramp-up drag, a projected ~$5 million of additional tariff refunds in H2, incremental pricing benefits starting in Q4, and early traction from ongoing operational improvement initiatives. The full 200-400 basis point long-term margin improvement from these initiatives will build over time.

Q: What is driving current QSR segment growth, and what is the outlook for replacement demand? / A: QSR demand breaks into three buckets: new store openings are flat this year with a stable visible pipeline for 2027, pent-up replacement demand for aging equipment has started to pick up after being muted for 5-7 years, and the largest growth driver is new product adoption to add menu items, extend operating day parts, improve throughput, and cut labor costs, particularly for ice and beverage equipment, which will continue accelerating into 2027.

Q: What is driving international growth, and how will successful global innovative products translate to the US market? / A: Historically, Middleby only sold a limited portfolio (mostly fryers and ovens) to large global chains in international markets. The key current growth driver is expanded distribution of the full Middleby product portfolio, including ice and beverage solutions, to local emerging chains and regional customers, which is driving deeper penetration across all international regions.

Q: What is the timeline for ice and beverage investments, and will the 400 basis point margin gap close over time? / A: New ice and beverage products (like the Fizz automated beverage machine and Gravity platform) are ramping production now, with full commercial launch and revenue impact coming in 2027. The margin gap is not structural — mature ice and beverage businesses already hit the company's target margins, similar to the cooking segment. The gap reflects the early stage of new product investment and integration of recent acquisitions, and will close steadily through 2027 and 2028 as scale grows and operational initiatives deliver cost savings.