The Middleby Corporation (NASDAQ:MIDD) Q4 2025 Earnings Call Transcript

The Middleby Corporation (NASDAQ:MIDD) Q4 2025 Earnings Call Transcript February 26, 2026

The Middleby Corporation beats earnings expectations. Reported EPS is $2.42, expectations were $2.27.

Operator: Good day, and welcome to the Middleby Corporation’s Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] On today’s call are Tim FitzGerald, CEO; Mark Salman, President of Middleby Food Processing Group; Bryan Mittelman, CFO; James Pool, CTO and COO; and Steve Spittle, Chief Commercial Officer. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Tim FitzGerald. Please go ahead.

Timothy FitzGerald: Good morning, and thank you for joining today’s call. Over the past year, we have executed decisive actions to unlock significant value for our shareholders through the strategic optimization of our portfolio of industry-leading businesses across Commercial Foodservice, Food Processing and what was formerly our Residential Kitchen segment. Before we dive into our results for the quarter, let me start with our strategic accomplishments. In February, we announced the completion of the sale of a 51% stake in our Residential Kitchen business to 26North at $885 million total enterprise valuation, delivering approximately $565 million in immediate cash proceeds subject to future closing adjustments. This transaction represents a premium valuation while allowing us to retain meaningful upside through our 49% ownership stake.

Following the close of the transaction, Middleby operates 2 highly focused industry-leading platforms, Commercial Foodservice and Food Processing. While we retain a 49% stake in the Residential JV, we are treating this as a non-core part of our operations, which is why you’ll see it in discontinued operations in the fourth quarter and going forward will be excluded from our adjusted results. In anticipation of the proceeds from the deal, we will immediately put this capital to work for our shareholders. Combined with our ongoing share repurchase program, we reduced our overall share count in 2025 by approximately 9% through $710 million in buybacks, one of the most aggressive capital return programs in our industry. This reflects our conviction that Middleby shares remain significantly undervalued relative to our earnings power and growth prospects.

In the second quarter, we plan to complete the separation of our Food Processing business, creating 2 independent pure-play industry leaders. Each business will emerge with enhanced focus, optimized capital structures and the resources to maximize growth in their respective markets. The financial impact is compelling. Following these transactions, Middleby will operate as a focused Commercial Foodservice leader with industry-leading 27% segment level EBITDA margins, while Food Processing becomes an independent growth platform with segment level EBITDA margins over 20% and significant expansion opportunities through both organic and acquisition growth initiatives. Turning to our fourth quarter results. Our total revenue of approximately $866 million for our remaining 2 segments exceeded our expectations.

This strong top line performance drove adjusted EBITDA of approximately $197 million. Through a combination of these operational results and the substantial share repurchases we made in 2025. This translated to adjusted EPS of $2.14 for the quarter and $8.39 for the full year. For today’s discussion on segment level results and trends, I will be discussing the Commercial Foodservice results and outlook, and I have asked Mark Salman, the current President of our Food Processing segment, and as we announced today, the CEO of Food Processing SpinCo upon completion of the spin-off, to discuss the Food Processing segment performance. Starting with Commercial Foodservice, we generated revenue of approximately $602 million, which exceeded our expectations during the fourth quarter.

The outperformance was driven primarily by the general market with our dealer partners, which had double-digit growth in the quarter. We attribute the second half momentum to improve demand with independents and in the institutional market, along with continued growth with emerging chains. We are gaining share with our dealer partners as a result of investments to strategically align those relationships over the past several years. The broad-based strength we saw in the general market was offset by continued declines among our large QSRs and C-store customers who faced lower traffic and cost pressures throughout 2025. While the QSR market conditions remain challenging, we are encouraged by actions taken by our larger chain customers to better position themselves setting into 2026.

We’ve seen our customers address menu pricing, returned to limited time offers and launch new beverage programs to reposition against the challenging backdrop with a focus to drive customer traffic. We are encouraged by the early traction we have with some of our largest customers with our new ice and beverage innovations. This is a targeted area of expansion for our Commercial Foodservice business and we are well positioned with exciting new solutions. As we think about the year ahead for Commercial Foodservice, we remain focused on building our business for long-term success, but are optimistic that the chain restaurant environment will stabilize and improve as we move through the upcoming year. Bryan will provide additional color, but our guidance assumes a relatively consistent environment relative to what we are currently experiencing as we await larger chain customers to firm up their plans for the year, particularly in the second half.

More specifically, we have clear catalysts for accelerated growth with restaurant industry fundamentals stabilizing with early signs of traffic improvement. With our dealer partnerships generating strong momentum in the general market and institutional segments, in our ice and beverage platform, representing a significant growth opportunity that we’re uniquely positioned to capture. As we think longer term, the investments we have made position us with unmatched competitive advantages, both now and in the future, with the industry’s broadest portfolio of leading brands, the strongest innovation pipeline and leadership in automation and IoT capabilities that will drive market share gains for years to come. We still have work to do, but I’m excited for what the future holds for Middleby Commercial Foodservice.

I would now like to turn the call over to Mark to discuss Food Processing.

Mark Salman: Thanks, Tim. Before I discuss the segment results, I want to thank the Board of Directors for entrusting me with leading Food Processing SpinCo. Leading this company is the honor of a lifetime and I am excited for the opportunity ahead. I also want to thank you, Tim, for the partnership you’ve shown me over the past 10 years here at Middleby. I look forward to working with you even more closely through this process. Turning to the Food Processing segment. In the fourth quarter, we generated revenue of approximately $265 million, which outperformed our expectations. As I look at the business, I am proud of what we have accomplished in the fourth quarter, particularly our extreme strong order rate, but more excited about the strong foundation it creates as we enter 2026.

2025 was challenged with disruption from tariffs and high food costs, which delayed our customers’ purchasing and investment in solutions in the first half. However, the latter part of the year, we saw our customers moving ahead. We had very strong orders in both the third and fourth quarters with a record backlog as we finish the year. This was driven by continued success with our Total Line Solution offering along with strategic expansion in international markets. We have a strong sales pipeline and continuing strong order intake. This all gives me great confidence in our position for not only next year, but the longer term. Taking a step what sets Middleby Food Processing a part is our comprehensive approach to serve individual protein, bakery and snack processors.

Rather than creating a portfolio of disconnected brands, we have created a portfolio designed to deliver complete end-to-end total line solution offerings that optimize our customers’ entire production lines and are committed to delivering the lowest total cost of ownership. Our success reflects a year of strategic investment in building these comprehensive customer solutions, and we are gaining momentum in the marketplace with a growing competitive advantage. Our decentralized culture promotes agility, innovation and speed. We have state-of-the-art innovation centers with the most recent one opened this fourth quarter outside Venice, Italy, where we can showcase our know-how in the most innovative and collaborative environment. This strategy is one of the key foundations that will drive our organic growth in the years to come.

I am also very excited about the continued opportunities that exist as we expand the platform through targeted strategic acquisitions. We have built the Food Processing business through additions of brands and products, very specific to the food applications that we have targeted and that complement our Total Line Solutions. This has proven to be a very successful acquisition strategy, providing significant revenue and operating synergies. We have a consistent and proven track record of executing on our acquisition strategy over many years with our strategic approach and financial discipline. Although we have been executing our strategy for some time, we are still in early innings, and it’s the right time for the separation into an independent company.

We now have the proper scale, we can accelerate what has proven to be our unique and successful business model. I am excited for what lies ahead. With that, I’ll turn the call back over to Tim.

Timothy FitzGerald: Thanks, Mark. I’m looking forward to what is ahead for Food Processing. As you’ve already heard, we have 2 well-positioned segments for growth in 2026 and beyond. On top of this, at a corporate level, our capital allocation strategy remains aggressive and focused. We’ll continue our share repurchasing program having allocated over $700 million in 2025, reducing our shares outstanding by approximately 9%. We continued this share buyback activity into the first quarter, expecting to repurchase approximately another $300 million in the first quarter of 2026. We plan to allocate the substantial portion of our free cash flow again to repurchases this year. But most importantly, we have a world-class team around the globe, whose commitment and execution continue to drive our success.

2026 represents a defining year for Middleby as we execute this strategic portfolio optimization and position both businesses for accelerated growth. We are planning an Investor Day on May 12 in New York City, ahead of the Food Processing Spin and look forward to providing greater level of information on profiles and growth strategies for each stand-alone company ahead of the separation in the second quarter. With that, now I’ll turn it over to Bryan to discuss our financial performance in greater detail and guidance for the first quarter and 2026.

Bryan Mittelman: Thanks, Tim. Our fourth quarter results showcased the strength of our execution and the quality of our business model. Let me walk through the key financial highlights and our outlook. For Commercial Foodservice, positive impacts we’re seeing from general market, institutional and emerging chain customer segments. We delivered $602 million of revenue and a solid EBITDA margin of over 26%. This would have exceeded 27%, if not for tariff impacts. Customer engagement and interest in our leading technologies remain strong, especially in beverage dispense and ice products. At Food Processing, Q4 revenues were approximately $265 million, and our organic EBITDA margin was 23%. Organic revenue growth of 1.3% benefited from improvements in international markets.

Margins were impacted by tariffs with higher costs and disruption in order timing impacting production efficiencies. We are experiencing a strengthening order rate and growing backlog. Q4 orders reached $322 million and backlog grew to $410 million with growth across most of our served markets and in our Total Line Solutions. Turning to Residential Kitchen. Our transaction to sell a 51% stake to 26North closed on February 2. Prior to the close of the sale, Residential Kitchen was treated as a discontinued operation. Following the close of the sale, our future balance sheets will include a minority interest investment reflecting our 49% ownership stake and a note receivable. Our income statement will reflect the impact from our noncontrolling interest on a quarter in arrears basis.

Residential results are not included in our non-GAAP adjusted earnings and adjusted EPS calculations as they are no longer part of core operations. On a consolidated basis, total company adjusted EBITDA for Q4 was approximately $197 million and adjusted EPS was $2.14. Regarding tariffs, the adverse net impact to EBITDA in Q4 was approximately $7 million. We expect benefits of pricing and operational actions implemented in 2025 to offset the cost of tariffs in 2026, although we will continue to have margin dilution in the first half of the year. Q4 operating cash flow was approximately $178 million and free cash flow was approximately $165 million. Our leverage ratio per our credit agreement at year’s end was 2.5x. Regarding capital allocation, last year, we communicated the decision to deploy the vast majority of our free cash flow to share repurchases.

For the full year 2025, we repurchased 4.9 million shares for $710 million or an average purchase price of approximately $144.50 per share. In total, these repurchases reduced our share count by 9% during 2025. To start 2026, we have repurchased an additional 1.7 million shares for approximately $250 million at an average price of approximately $154 per share. I would like to provide some commentary on our capital structure overall. Our 1% convertible notes matured in Q3 of 2025, which now results in a higher interest expense of approximately $6 million a quarter. This is a $0.12 headwind to the fourth quarter earnings. For full year 2026, the interest rate headwind from the higher cost of debt is approximately $0.34. The 2026 EPS guidance reflects the benefit of share buybacks from the proceeds of the sale of the 51% of the Residential Kitchen business.

We retain future upside through our ownership of the 49% of the business and the $135 million senior note. Turning to the rest of our outlook for 2026. For ease of communication, we provide this outlook on a current company basis, assuming that both Commercial Foodservice and Food Processing remain together for the full year. With that said, we still anticipate the separation of the 2 segments into separate public companies in the second quarter of the year, and we expect to provide updated guidance for the stand-alone companies at our Investor Day in advance of the separation of the divisions. For Q1, we expect to achieve the following: Total company revenue of $760 million to $788 million, which is comprised of Commercial Foodservice at $560 million to $578 million and Food Processing at $200 million to $210 million.

Adjusted EBITDA is forecasted to be between $161 million and $173 million, which is comprised of Commercial Foodservice at $142 million to $152 million and Food Processing at $37 million to $41 million. Adjusted EPS is projected to be in the range of $1.90 to $2.02, assuming approximately 47.7 million weighted average shares outstanding. For the full year, we expect to achieve the following: Total revenues of $3.27 billion to $3.36 billion, which is comprised of Commercial Foodservice at $2.37 billion to $2.43 billion and Food Processing at $895 million to $925 million. Adjusted EBITDA of $745 million to $780 million is comprised of Commercial Foodservice at $632 million to $658 million and Food Processing at $186 million to $208 million. Adjusted EPS will be in a range of $9.20 to $9.36.

Please refer to the presentation we have posted online at our Investor Relations website for full details. Please note this guidance does not include onetime costs associated with the completion of the Spin transaction, nor does it include a stand-alone public company costs for the Food Processing business. We will provide estimates and detail on stand-alone costs we expect to incur along with additional materials in connection with the upcoming Baird Food Processing Symposium in New York on March 5. I also want to provide some additional color on the shape of the year for Food Processing revenue. As a reminder, we typically see Q1 is our weakest quarter and Q4 is our strongest with Q2 and Q3 relatively equal in between. We expect 2026 to follow this general pattern.

However, in 2026, we expect the sequential increase from Q1 to Q2 to be smaller than the $48 million step-up we saw in 2025. This reflects our expectation that Q1 2026 will be stronger relative to the rest of the year than Q1 2025 was, essentially returning to more normal seasonal patterns after an unusually weak Q1 of 2025. Before we conclude our prepared remarks and begin Q&A, I want to provide an update on the Food Processing spinoff. We remain confident in our ability to execute the necessary actions to have a successful transaction. Activities to ensure the spin company will be operating effectively, efficiently and independently at inception remain on track. We continue to expect to complete the spin-off by the end of the second quarter.

Ahead of the joint Investor Day on May 12, we expect to file a publicly available registration statement, which will include annual audited financial statements in April. That concludes our prepared remarks, and we are now ready to take your questions.

Q&A Session

Operator: [Operator Instructions] The first question today comes from Mig Dobre with Baird.

Mircea Dobre: I guess where I would like to start is with maybe a little more context on what you’re seeing in the CFS segment. You talked about the quarter being better than guided and anticipated that it clearly was. And you mentioned improved activity from the general market and the dealers. And I guess, I’m sort of wondering here how much of that was just a return to sort of the normal behavior that we typically see in the fourth quarter from the dealers in the general market? Going back to the prior call, we are talking about how your guidance at the time didn’t seem to reflect kind of the more normal stocking dynamics. I’m wondering if that’s really what surprised here? And as you think about your outlook for 2026, how do you think about this general market specifically? Can it actually build some ongoing momentum? And — we’re really waiting for here is for the large QSR customers to sort of find bottom? Or is there something else that you’re contemplating here?

Timothy FitzGerald: Mig, I think I’ll kick it off and then Steve will probably pick up. Yes, I mean, I think we’ve been — we saw continued strength in the dealer market, as I mentioned, in the initial comments. I think some of that’s fundamentally us gaining market share there, I think, to a certain extent, and then I would say kind of broad-based, we’ve seen improved replacement demand in the market. I think we — that exceeded expectations in the fourth quarter because it was very strong in the third. So we didn’t want to kind of bake that into an expectation of that continuing. But I think we feel pretty good about the backdrop of that continuing into next year. So really kind of the inflection is what happens with the change as we go through the year.

They have — we’ve seen improvement with the larger chains as we kind of went through the year. I think they’ve reset as they reacted to market dynamics and we’ve seen traffic improve, and that kind of gives us some level of improving confidence in that category of the market as we go through next year. And I think that’s kind of the pivot point to move back into organic growth for the year.

Steve Spittle: Mig, I would just add, this is Steve. Specific to the fourth quarter and dealer activity, we commented on prior calls that I don’t believe this is the historical, hey, it’s the fourth quarter, we’re bringing in inventory chase year-end incentives, that is not what I believe happened. One of the big areas we’ve spent a lot of time leaning in with our dealer partners, whether it’s training to the [ MIC ], online digital training has really been to get them to think outside of core Middleby products. So all our dealers historically know the Pitcos, the blocks, the South [ Bend ], where we’re gaining market share specifically the back half of last year has been getting those dealer partners to start thinking of us for ice, right, pulling out follower at ice or pulling in Invoq combi, pulling in TurboChef, pulling in coffee and then starting to really package and wrap a full Middleby solution together.

And that’s more where I think we saw the positive impact in the fourth quarter, not necessarily the historical norm of stocking up in the fourth quarter. We just don’t see that bringing in inventory to chase a year-end or chase — or beat a price increase, it’s just not the way the dealer market is operating right now. So we’re very happy with, I think, the increased share we’re taking in some of those new product categories for us.

Mircea Dobre: Okay. Very helpful. And then my follow-up is related to your tariff comments on Slide 20 of your deck. If I understand this correctly, at least the way I read it, it looks like there’s about $74 million at the midpoint of incremental tariff drag in ’26 relative to ’25, hopefully, I have that correct. I am wondering how that splits between the two remaining segments. And it appears that you’re saying you’re going to offset this with pricing, but there’s a bit of a timing issue in terms of how that flows through. So I guess the question, how confident are you that you’ll be able to offset this fully for the year? And is this the primary factor that is accounting for the margin ramp implied in the full year guidance relative to Q1?

Steve Spittle: Mig, it’s Steve again. So the split on the tariff impact between the two remaining companies in broad terms is, I’ll say, 2/3 to 70% of the impact is coming from Commercial Foodservice, obviously, the remaining impact from Food Processing. The main split difference there is Food Processing doesn’t quite have as large of a supply chain base coming from markets like Asia as we do in Commercial. So that’s the reason for a little bit of a difference. We have said that pricing that we took in the back half of last year, specifically on July 1. And then we took another small to mid single-digit increase to start the year on January 1 this year that would cover the impact of the tariffs as we sit here today. We still believe that to be true.

There is some vicious timing of when tariffs are hitting, when that pricing starts to or has been flowing through, and that’s where you see a little bit of a drag in the first quarter, specifically in commercial and obviously improving as that pricing comes through and then you start to overlap the tariff impact in the back half of last year, which is why you see — or one of the reasons you see margins improve throughout the year. So we do feel confident we’ve taken pricing. Again, July pricing has been in place already and now obviously, putting forth another increase to start the year and believe that, that will stick as the year unfolds.

Operator: The next question comes from Jeff Hammond with KeyBanc.

Jeffrey Hammond: Just wanted to come back on the QSR dynamic. One, I think you had some larger QSRs kind of take a CapEx strike in 4Q. I wondered if that played out? And what the — was that kind of a one quarter event or does that linger? Two, what are they kind of telling you about store openings? It seems like the last couple of years, there was optimism and then deferrals and what’s kind of the update there? And then just any — as you see some of this value pricing, better traffic, some of the stimulus coming into the market like what’s — how is the dialogue changing or not changing around CapEx for your QSR customers?

Timothy FitzGerald: So I think one of the things that we’ve seen is increasing confidence in the operators as we’ve come into the year. So I mean, I think there was a high level of uncertainty and certainly a lot of cost pressures, which caused them to hold up. So I mean I think one of the dynamics that we’re seeing is people have a lot more visibility, they’re in a better situation in terms of where they’re at with menu pricing, profitability, et cetera. So I think that’s a much better dynamic and I think that’s going to start spurring the replacement cycle, which we saw some early signs of that in the fourth quarter. So I think that’s part of the dynamic. We do still have chains that are on, I’ll say, CapEx strike, so to speak, as you said.

So as we kind of went through the fourth quarter, there were some that were still holding up plans. And I think that is still the case in the early part of the year, but I think we have some good decent visibility that, that probably will pick up as we go through the year, and I think that’s reflected in our guidance. And then with the new store, Steve, maybe if you want to touch on that?

Steve Spittle: Yes, Jeff. So you’re exactly right. I mean, as we saw — as we went through last year specifically, the new store plans for the bigger, say, top 25 chains definitely pushed out for a number of different reasons. It was slow traffic. It was being thoughtful around costs. I think as we move into this year, Tim said it correctly, I still think there is some pushout that is happening on new builds. And the positive side of that is I actually think it’s causing them to go back and really look at their current operations, both from a replacement standpoint. But also, I talked about in prior calls, just making sure that they have a plan of attack to increase traffic through their current footprint, which comes back to increasing day parts.

So again, that’s been a big theme that we’ve really seen with the QSRs, which I think will continue through this year is, “Hey, how do I get more traffic through my existing footprint?” And a big trend has been obviously beverage. And you’ve seen that with some predominant QSRs coming out with beverage programs that they’re launching that we’re a big part of. And I think why we’ve been successful just in that aspect, Jeff, is just that they can come to us as a holistic solution, the full breadth of our beverage product, but also comes with the support globally to do installation, to do after sales, service and support. And I think as those chains start to take action on those beverage programs. Again, we’re very well positioned. So to answer the question, new stores, I think there’s still some push out as this year goes is focusing more back on the replacement cycle, and that’s also adding in those day parts as the year progresses.

Jeffrey Hammond: Okay. Very helpful. The Food Processing, I just want to go to this kind of eye-popping 66% order growth. And just kind of understand how much is just people pausing and now kind of coming back in? Is there some good lumpiness in there? And then just with the order strength against 4% to 6% growth, like why not — why don’t we see more of this order growth drop through to revenue?

Mark Salman: Thanks for the question. This is Mark. So a number of factors has affected positively our order intake. The first hour strategy around Total Line Solutions customers are going that route, and we see it in the order intake. Another is what you mentioned. Some of the prior slowness of order intakes, especially in the first half of the year, balance itself with an increasing order intake in the second half of the year. And then the second part of your question is about the why don’t we see that in the 2026 numbers, was that the question?

Jeffrey Hammond: Yes.

Bryan Mittelman: Yes, Mark, I’ll jump in there on the growth. Jeff, let me know if I’m not — this is Bryan, addressing your question. Obviously, we had a strong fourth quarter in orders. And as Mark noted, a lot of that is Total Line Solutions. Some of that has a little longer of a delivery tail on it. But we’re excited that we’re entering the year with a confident view on delivering growth after what’s been a little bit of a slow period here. So based on the order trends, again, we’re looking forward to being a growth year for us.

Operator: The next question comes from Tami Zakaria with JPMorgan.

Tami Zakaria: I wanted to ask about the backlog growth, which is quite impressive, I think, up 36% for Food Processing. Just curious, how much of that is deliverable this year?

Bryan Mittelman: Yes, Tami, this is Bryan. A significant majority of it is deliverable this year, but there certainly is a minority portion of it that rolls out into the beginning of ’27 as well.

Tami Zakaria: Understood. Very helpful. And if you could comment about your thoughts on broader capital allocation and M&A, in particular, for the core CFS segment once the food processing split is done?

Timothy FitzGerald: Yes. Tami, this is Tim. So reason for the split, obviously, as we said, there’s quite a bit of M&A opportunity within Food Processing. Within Commercial Foodservice, I mean, I think the focus is going to continue to be on share repurchases, certainly in the near term. We’re really focused on organic growth. We’ve made significant initiatives or investments over the last several years on innovation. Go-to-market strategies, a lot of that we’re starting to see play out now, and we also expect it to take increasing traction as we go through next year. So that’s really going to continue to be the focus. There is opportunities there. So I mean I think as you kind of look over the last few years, we focused on beverage, and we focused on technology, automation, IoT and areas like that.

So — there continues to be opportunities, so we’ll be focused and kind of targeted in that — those areas, which we think will help us accelerate some of the organic growth, but largely, the focus is going to be on organic growth kind of immediately after the separation.

Operator: [Operator Instructions] The next question comes from Brian McNamara with Canaccord Genuity.

Brian McNamara: First on Commercial Foodservice. Great to see the segment guided positively to both the quarter and the full year 2026 here. I was wondering if you could peel the onion back another layer a bit. To me, it sounds like this will be predominantly pricing-driven. And if so, what’s the expectation to kind of get volumes moving in the right direction again?

Timothy FitzGerald: Yes. Certainly, we’ll have pricing benefit going into the year, but I don’t necessarily think all of our expectation going forward is pricing driven. I mean, I think there are opportunities as the market stabilizes and recovers. I think we’re very well positioned in our core cooking segment. And I think as we think about ice and beverage. And as Steve commented, there’s really significant market share opportunities. So I mean, I think — although it’s a meaningful part of our platform today, we really are a new player. There’s a lot of new products that have been launched. There’s a lot that’s in the pipeline. So I mean, I think we’re anticipating some organic growth even without a big market turn up in the ice and beverage segment. So I think it’s kind of a match of some pricing as well as some organic growth opportunities with volume.

Steve Spittle: I mean, Brian, I would just add, as we think about the 3 or 4 big buckets of customers to piggyback on Tim’s comments is we’ve commented already on the momentum. We feel like in the U.S. dealer general market institutional and emerging chain business, which I think that continues through the year. The fast casual segment, which I think has outpaced and certainly done better than the QSR segment in the last year or 2, which we’re well positioned. We’ve talked a little bit more about international growth. I think, again, we’re well positioned with a lot of the initiatives we’ve undertaken in the Europe — in Europe and the Middle East. Asia had a better finish to the year for us, but obviously, still has some, I’ll call geopolitical headwinds as we do in Latin America.

But still, I think we’re well positioned in those markets. So it really does come back to the QSR segment as to where the year potentially does inflect. And I think our approach to the guidance for the year has been to keep a conservative nature based on where that market is today. But also knowing we’re well positioned in QSRs, especially when traffic picks up and things turn both with our core business and as we’ve talked about with the additional products around beverage and ice.

Brian McNamara: Great. Just a follow-up on the QSR piece specifically. You had mentioned you’re kind of waiting for some of the bigger players to firm up their plans, but they do have the big players that have reported so far, obviously, have CapEx plans, unit growth plans out there. So I’m assuming there’s some give and take, I guess, as it relates to the equipment spend. Is that how we should think about it? And when do you — would you expect clarity on that front?

Steve Spittle: So what we’re referencing there, Brian, really, I think of 2 things specifically is how do new builds progress throughout the year. And I think it is, yes, they all put out their projections that they’re pretty open with us and obviously, what they share themselves. I think the concern there has just been the pushouts we’ve seen. So I think the firming up is when do we really see those stop being pushed out and actually turn into real builds. I think the bigger thing that we’re waiting for is we have a number of exciting initiatives and projects with these big QSRs, again, around beverage, around new products that, again, I think we need to see traffic improve. We need to — which, I think, trends to CapEx being freed up, which then, I think, greenlights a lot of the projects that we have in the work.

So when we talk about, hey, firming up plans back half of the year, it’s really those 2 areas, new store builds and just some of these key projects, getting the official green light to move forward. For us, it’s not a matter of — yes, they’re moving forward and are we well positioned, but it’s just — it’s a timing of when it actually starts to move forward.

Operator: [Operator Instructions] The next question comes from Mig Dobre with Baird.

Mircea Dobre: Just very quickly here. So the Investor Day on May 12, can you maybe give us a general framework in terms of what we should be expecting? It sounds like you’re going to have both Food Processing and Commercial Foodservice present in this event. I’m kind of curious for Commercial Foodservice, maybe more specifically. Strategically, are you contemplating any portfolio simplification, 80/20, those kinds of actions? I mean over the years, you really acquired a lot of different brands? And I don’t know if that you’re reaching kind of the point of the stage, if you would, where simplification does make some sense. Or is there something else from a structural growth standpoint that we should be prepared to be hearing about?

Timothy FitzGerald: Yes. Thanks, Mig. So it’s still a ways off. So I think we’ll provide a little bit more lead into what to expect on May 12 as we get closer. Certainly, we’ll do a deeper dive into kind of the strategic initiatives, our portfolio, some of the operational execution that we’ve got planned. But certainly, there’s a lot of exciting things going on in Commercial. So I mean, I think there’s a great story to tell. And as we get closer to May 12 and certainly at May 12, we’ll do a deeper dive into it. Yes, it will be both Commercial and Food Processing, presenting kind of adjacent to each other.

Operator: The next question comes from Brian McNamara with Canaccord Genuity.

Brian McNamara: Just a quick one on Food Processing. Can you remind us how long it typically takes in order to convert to revenues and what the typical range is? It’s great to see the quantification on both there. You mentioned most being converted in 2026.

Steve Spittle: Yes, Brian, it depends on the type of equipment and the type of solution the customer is buying. But by and large, I would say somewhere between 6 to 12 months.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tim FitzGerald for any closing remarks.

Timothy FitzGerald: No. Thank you, everybody, for joining us today. So we’ve got an exciting year ahead. Looking forward to speaking to everybody on the next call. I also just mentioned — as we said on the call, we’re going to be at the Baird Food Processing Symposium next week. So looking forward to that. I’ll let everybody know that we will be posting some materials publicly as well in conjunction with that to give a little bit more further information on our Food Processing segment. So thank you. Look forward to speaking to everybody next quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.