Strategic Sale of Jack Wolfskin and Financial Flexibility
The company completed the sale of Jack Wolfskin earlier than expected, resulting in approximately $15 million less revenue year-over-year but $7 million higher adjusted EBITDA due to avoided seasonal losses.
The sale enhances financial flexibility and aligns with the strategic focus on core businesses, supporting the planned separation of Topgolf.
The sale's seasonality caused a significant impact on the second half EBITDA, with the business incurring seasonal losses in the first five months of 2025.
The sale reduced revenue by about $265 million and adjusted EBITDA by $26 million for the full year, with the proceeds strengthening liquidity and reducing net debt.
Adjusted EBITDA was flat at $105.4 million with a margin decline of 110 basis points year-over-year.
Diluted EPS was $0.29 compared to $0.35 last year; adjusted diluted EPS was $0.40 versus $0.45.
Free cash flow declined to $25.5 million for the first six months, expected to normalize in the second half of 2025.
Gross profit increased 3.8% to $239.7 million with a margin of 32.8%, down 130 basis points year-over-year but up 220 basis points sequentially.
MasterBrand reported second quarter 2025 net sales of $730.9 million, an 8% increase year-over-year, driven primarily by the Supreme acquisition, price improvements, and share gains.
Net debt decreased sequentially by $66.1 million to $878.6 million, improving leverage to 2.5x, on track to sub 2x by year-end.
Net income declined to $37.3 million from $45.3 million last year, impacted by higher SG&A, amortization, and restructuring costs, partially offset by lower interest and tax expenses.
SG&A expenses rose 8.7% to $159.4 million, mainly due to Supreme's addition.
Impact of the Big Beautiful Bill on Tax and Depreciation Benefits
The company expects an additional $10-15 million in tax shields due to accelerated depreciation from the new legislation.
This tax benefit could translate into $2-3 million in increased cash flow starting in 2026.
The legislation also increases the reportable limit of slot winnings, which could significantly benefit the tavern segment in terms of transaction volume.
Adjusted EBITDA was $120 million with margins at 22%, slightly ahead of expectations.
Adjusted gross profit was $192 million, up 3%, with a margin of 35.1%, down 130 basis points due to input cost inflation and packaging redesign costs.
Cash flow from operations was $40 million in Q3 and $92 million year-to-date; net debt was $971 million with net leverage at 2x, expected to end the year below 2x.
Dymatize net sales increased 5%, driven by international and domestic RTD shake sales.
Net sales for Q3 were $548 million, up 6% year-over-year.
Premier Protein net sales grew 6%, with volume and pricing both up 3%.
SG&A expenses were $145 million, including a $68 million legal provision related to discontinued Joint Juice brand; excluding this, SG&A was $76 million, a decrease as a percentage of net sales.
Share repurchases totaled 1.3 million shares in Q3 for $83 million, with $197 million remaining authorization.
Adjusted EBITDA increased 14.3% to $59.2 million; adjusted EPS increased 1.6% to $1 per diluted share, including $0.18 EPS impact from additional interest on securitization.
Board approved increase in quarterly dividend from $0.27 to $0.30 per share, totaling approximately $8.4 million.
Company-owned restaurant sales increased $2.6 million due to 3.6% same-store sales growth and two net new restaurants.
Cost of sales as a percentage of company-owned sales declined 70 basis points to 75.2%, driven by sales leverage on labor and operating expenses.
SG&A increased $4.8 million to $32.9 million due to headcount investments and $1.5 million nonrecurring system implementation expenses.
System average food cost sustained at approximately 34%, within targeted mid-30% range.
System-wide sales increased 13.9% to $1.3 billion in Q2 2025, with same-store sales declining 1.9%.
Total revenue increased 12% to $174.3 million versus prior year, driven by 464 net franchise openings and partially offset by domestic same-store sales decline.
Unlevered cash-on-cash returns for brand partners remain industry-leading at 70%.
Adjusted EBITDA loss widened to $26 million (minus 34.7% of net revenues) from $23 million (minus 24.7%) year-over-year.
Cash and cash equivalents were $117.3 million with total debt approximately $1.2 billion as of June 28, 2025.
Gross margin declined to 11.5% from 14.7% a year ago, impacted by lower volumes, unfavorable product mix, higher trade spend, and $1.7 million in expenses related to suspension of China operations.
Net cash used in operating activities increased to $59.4 million for the first half of 2025 compared to $47.8 million in the prior year period.
Net loss was $33.2 million or $0.43 per share, slightly improved from $34.5 million or $0.53 per share in the prior year period.
Net revenue for Q2 2025 was $75 million, down 20% year-over-year, primarily due to softness in the U.S. retail channel and international foodservice segments.
Operating expenses were $47.4 million, slightly lower than $47.6 million in the prior year, but included $7.5 million in nonrecurring expenses; excluding these, operating expenses showed meaningful reduction.
Dafinchi
