2024-05-08 17:42:09 ET
The Middleby Corporation (MIDD)
Q1 2024 Earnings Conference Call
May 08, 2024 11:00 AM ET
Company Participants
Tim FitzGerald - Chief Executive Officer
James Pool - Chief Technology Officer & Chief Operations Officer
Bryan Mittelman - Chief Financial Officer
Steve Spittle - Chief Commercial Officer
Steve Spittle - Vice President of Investor Relations
Conference Call Participants
Mig Dobre - Baird
Jeff Hammond - KeyBanc Capital Markets
Saree Boroditsky - Jefferies
Tami Zakaria - JPMorgan
Brian McNamara - Canaccord Genuity
Walt Liptak - Seaport Res
Presentation
Operator
Thank you for joining us for The Middleby Corporation First Quarter 2024 Conference Call. With us today from management are CEO, Tim FitzGerald; CFO, Bryan Mittelman; Chief Technology and Operations Officer, James Pool; Chief Commercial Officer, Steve Spittle and Vice President of Investor Relations, John Joyner. We will begin the call with opening remarks then open the lines for questions. Instructions on how to join the queue will be given at that time.
Now I would like to turn the call over to Mr. FitzGerald. Please go ahead.
Tim FitzGerald
Good morning, and thank you for joining us today on our first quarter earnings call. As we begin, please note there are slides to accompany the call on the Investor page of our website. First quarter proved to be challenging with the backdrop of the housing market, interest rate environment and price cost pressures at our restaurant and food processing customers, weighing out our businesses as we started the year. Even though challenges persist, we are seeing improving order activity and expect this to continue as we move through the year, as customers execute on state of business plans and as opportunities in the pipeline begin to convert.
While customers are slow to restock inventories, given shorter lead times and higher carrying costs, inventories in the channel have returned to normalized levels and now provide a tailwind, as end user sell-through occurs and this bodes well for the later part of the year.
At our Commercial Foodservice business, customer execution has been slow, starting the year, given continued longer lead times for permitting and construction along with longer deliberation on their business plans, given economics of higher restaurant operating costs. However, our channel partners are building backlogs weighted to the second half of the year and our chain customers continue to maintain their plans for operational upgrades and store openings, which are also weighed to the second half.
We are gaining market share in new and large product categories, such as beverage and ice and we are well positioned to capitalize on our market-leading positions, capturing growing trends in ventless and electrified cooking. And we have early-stage traction with some of our game-changing innovations as we lead the future of automation, digital and IoT.
At our business – at our residential business, the housing market remains very challenged in terms of existing home sales, new home starts and remodels. While the residential market will take time to fully recover, it has stabilized with the luxury end of the market showing improvement over the past several quarters. We're now seeing growth in order rates and we expect that will continue as we progress through the year. And we are well positioned to benefit from the many investments that we have made in new product innovation, as we move beyond the current market conditions....
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The Middleby Corporation (MIDD) Q1 2024 Earnings Call Transcript