Standex Corporation has vowed to focus on improving operating margins in its global Food Service Equipment Group after reporting that divisional operating income fell 2.7% during the three months to the end of December.
Despite boosting sales by 4.3% over the same period, the company’s CEO Roger Fix revealed earnings from its Food Service business were hit by several factors.
“Lower margins on a large sale of combi ovens that included training and installation; unfavourable product mix; and continuing pricing pressures in certain segments of our cooking line negatively affected profitability,” he said.
Margins in the firm’s Refrigerated Solutions business were negatively impacted by product mix, pricing pressure in the walk-in business and labour inefficiencies as a result of the consolidation of Kool Star into one of its US facilities, although that issue has now been resolved and is expected to deliver consolidation savings in the current quarter.
Fix said domestic and international quick serve and national chain restaurant sales drove the growth of its Cooking Solutions business in the quarter, meanwhile.
“Growth was moderated, however, by lower-than-expected sales of griddles to a prominent quick service hamburger chain as a result of a delay in the roll-out of its “premium” burger, as well as lower demand from the grocery store segment in Europe,” he added.
As well as Food Service, Standex also operates engineering, engraving and electronics and hydraulics divisions.
It said overall company sales rose 9% to $155m (£99m) during its fiscal second quarter while income from operations climbed 7% to $14.4m (£9m).