ITW expects the volume of foodservice equipment inventory held in the dealer channel to recede over the coming quarters now that lead times are back to pre-pandemic levels.
The company, which owns brands such as Hobart, Bonnet and Traulsen, yesterday reported catering equipment sales of $678m for the three months to the end of September, an increase of 7% on the previous year. Operating income rose 11% to $185m on the same basis.
Speaking on a call with analysts, vice chairman Christopher O’Herlihy was asked how the supply chain was evolving for the foodservice equipment side of its business – and whether it was hearing any noise in the channel around destocking.
He answered: “From a lead time perspective, I would say that a natural outcome of our business model is best-in-class lead times and customer-facing performance. And we are very much back to where we were pre-pandemic in terms of our ability to supply our customers.
“In terms of the channel, yes, I think it’s an area where there is a little bit of inventory in the channel. We’re seeing that coming down. It’s probably still out there. It’s one of the segments that has been impacted, I think, by channel inventory likely to come down over the next couple of quarters here, but it’s fair now, for sure.”
During the call, ITW revealed that food equipment delivered organic growth of 6% during the quarter as equipment sales rose 5% and service revenues grew 9%.
North America sales climbed 10%, with institutional sales up in the mid-teens, restaurants up by high single digits and retail up in the high teens on the back of new product roll-outs.
Sales in Asia-Pacific increased 6% but trading in Europe was flat, the company said.
