Middleby reported their Q1 2023 earnings today, and for us it was all eyes on their Residential Kitchen segment which houses Masterbuilt, Char-Griller and Kamado Joe. As expected, the financial performance was rough compared to Q1 last year when there was still pandemic fueled grill buying.
Distribution
Middleby noted on the earnings conference call that they have increased their distribution. They’ve added more floor space in existing retailers, and have been working on adding specialty retailers to the mix. They have been targeting their Kamado Joe line specifically for specialty retailers.
Return to Normal
Like Middleby and other manufacturers have said before, they expect a return to normal inventory levels in the back half of the year. This will benefit sales as retailers begin buying inventory again.
They said on the earnings call that they expect year-over-year sales growth in the back half of the year from the normalization. To be fair though, they have some pretty easy comps from 2022.
Middleby’s Q2 guidance for their Residential Kitchen segment illustrates the glut of inventory in the supply chain. They guided to similar sales and margins as Q1. That was surprising given that Q2 includes some of the biggest grilling months.
Like Camp Chef’s parent company, Middleby noted market headwinds going into Q2, including the weather.
Connected Grills
A bright spot for Middleby that they mentioned is they are seeing increasing momentum for the Masterbuilt Gravity series. It’s not surprising, because that’s a differentiator for them in the market.
Another product that was called out is the recently released the Konnected Joe. It’s the first digitally controlled kamado style grill. They said on their investor deck that it’s “driving awareness and growth within Middleby Outdoor’s digital (automated) charcoal platform”.