Marzetti shares rise on margin expansion, $400M Bachan's acquisition
Food manufacturer marks 63rd consecutive dividend increase amid strategic expansion into premium sauce market
The Marzetti Company shares climbed in Tuesday trading after the Ohio-based food manufacturer reported record gross profit with margin expansion and announced a $400 million acquisition of Bachan's Japanese Barbecue Sauce, extending a streak of shareholder rewards that now spans six decades.
Marzetti reported fiscal second-quarter sales of $518.0 million for the period ended December 31, 2025, up 1.7 percent from the prior year. Net income reached $2.15 per diluted share, an increase from $1.78 per share in the previous year, while consolidated gross profit rose 3.4 percent to a record $137.3 million.
The company achieved a reported gross margin improvement of 40 basis points, with adjusted gross margin expanding 80 basis points to 26.9 percent, driven by ongoing cost savings programs. Retail sales declined 1.1 percent to $277.5 million, while foodservice sales grew 5.2 percent to $240.4 million, excluding temporary supply agreement sales.
"The Marzetti Company delivered solid second-quarter results, highlighted by record gross profit and margin expansion amid a challenging operating environment," the company said in a regulatory filing.
Separately, Marzetti increased its quarterly dividend to $1.00 per share, marking the 63rd consecutive year of dividend increases—a rarity among publicly traded companies that places Marzetti among an elite group of American dividend aristocrats. The company also repurchased $20.1 million of its stock during the quarter.
The most significant strategic development came after quarter-end, when Marzetti entered into a definitive agreement to acquire Bachan's, Inc. for $400 million, subject to customary adjustments. The premium Japanese barbecue sauce brand generated approximately $87 million in net sales for the twelve months ending December 31, 2025, according to the acquisition announcement.
The transaction, expected to close before Marzetti's fiscal year-end of June 30, 2026, will be funded with cash on hand and additional financing. Bachan's, founded by Justin Gill using a multi-generational family recipe, has established itself as a fast-growing player in the clean-label condiment market.
"This acquisition represents a strategic opportunity to strengthen our position in the condiment and sauce category while expanding our portfolio of premium, authentic brands," said David A. Ciesinski, chief executive officer of The Marzetti Company.
Marzetti, which trades on Nasdaq under the ticker MZTI, commands leading market positions in several niche categories, including an 82.1 percent share in produce dips and a 43 percent share in the frozen garlic bread market through its New York Bakery brand. The company's net margin of 9.54 percent and return on equity of 4.67 percent exceed industry benchmarks.
Analysts maintain a neutral consensus rating on the stock with an average one-year price target of $196.20, representing approximately 13 percent upside from current levels. Shares of Marzetti were trading at $173.91 on Tuesday, giving the company a market capitalization of roughly $4.74 billion. The stock has ranged between $152.02 and $194.09 over the past 52 weeks.
The Bachan's acquisition comes as consumer preferences increasingly favor authentic, clean-label food products with compelling brand narratives. Marzetti's existing distribution network and retail relationships should accelerate Bachan's growth beyond its current trajectory, while the acquisition diversifies Marzetti's portfolio beyond its traditional dressings and dips categories.
With the dividend increase marking more than six decades of consistent shareholder returns, and the strategic acquisition positioning the company for growth in the premium condiment market, Marzetti is balancing its heritage of stable cash generation with strategic expansion initiatives. The company will report third-quarter results in May, when investors will get initial insights into the integration of Bachan's and the progress of the combined operations.