Executives at Middleby Corporation have said they do not expect to see the “historical bump” in inventory stocking among catering dealers during the fourth quarter.
Speaking on a recent earnings call to accompany the group’s third quarter results, chief commercial officer Steve Spittle provided some interesting insight into dealer buying patterns and channel inventory for Q4.
He suggested it was unlikely that the business would see the increase in inventory stocking that often occurs in the dealer channel this time of year.
“I think you will not see that historical bump from distributors for a couple of different reasons. They’re carrying less inventory than they have for a long time. I think we are well past excess inventory in the channel, but they’re also less willing to bring in inventory as they would say, in historical years, primarily driven by higher interest rates. The carrying cost of inventory is certainly higher than it has been for a long time.
“Our lead times are also in a much better place and they can order in much more real time. So they’re trying to close that gap between order period and the time that the end-user customer actually needs the product.”
Global net revenues fell 4% to $943m during the three months to the end of September as Middleby’s commercial foodservice equipment segment felt the chill from customers stalling on buying new kit.
It said lower restaurant traffic and higher food costs in recent months had led customers to impose a “greater than expected delay” in facility investments and in the permanent closure of locations.
Officials said they remained confident that the situation would pick up in 2025 with larger chains and fast casual chains still talking about store openings.
