Is Marzetti (MZTI) Trading Margin for Market Share With Bachan’s Deal and Higher Dividend?

In its fiscal third quarter ended March 31, 2026, The Marzetti Company reported sales of US$453.37 million and net income of US$37.06 million, reflecting slightly lower revenue and earnings versus the prior year while still delivering a third-quarter record gross profit. At the same time, Marzetti closed its US$400 million acquisition of fast-growing barbecue sauce brand Bachan’s and lifted its dividend again, underlining a continued emphasis on portfolio expansion and cash returns even as retail softness and higher SG&A weighed on near-term performance. We’ll now examine how Marzetti’s record gross profit but weaker revenue and EPS shape the company’s investment narrative and future prospects.

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Marzetti Investment Narrative Recap

To own Marzetti, you need to believe its mix of branded sauces, dressings and frozen bakery can still grow earnings despite shifting food trends and retailer pressure. The key near term catalyst is whether margin gains can hold as volumes soften; the main risk is that category weakness and private label competition turn today’s modest sales dip into a longer volume problem. The latest quarter, with record gross profit but lower EPS, does not yet resolve that tension in a material way.

The Bachan’s acquisition is the clearest link to this quarter’s story. Marzetti closed the US$400 million deal and funded half of it with new debt while also increasing its dividend, even as Q3 sales slipped 1.0% and EPS missed expectations. For investors focused on catalysts, that combination puts more weight on Bachan’s contribution to future growth and margins at a time when the core retail business is feeling pressure.

Yet beneath the record gross profit, the reliance on a small set of powerful partners and higher annual capital spending could become a bigger risk that investors should be aware of...

Read the full narrative on Marzetti (it's free!)

Marzetti's narrative projects $2.0 billion revenue and $213.7 million earnings by 2029. This requires 1.4% yearly revenue growth and a $34.2 million earnings increase from $179.5 million today.

Uncover how Marzetti's forecasts yield a $185.00 fair value, a 57% upside to its current price.

Exploring Other PerspectivesMZTI 1-Year Stock Price Chart

Before this quarter, the most pessimistic analysts were already assuming only about 1.5 percent annual revenue growth and earnings of roughly US$213 million by 2029, so this miss may push that cautious view even further if Bachan’s co manufacturing and integration do not lift margins as quickly as hoped.

Story Continues

Explore 3 other fair value estimates on Marzetti - why the stock might be worth 36% less than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

A great starting point for your Marzetti research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free Marzetti research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Marzetti's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MZTI.

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