Maple Leaf Foods (TSE:MFI) reported higher third-quarter sales and adjusted earnings but said it expects full-year adjusted EBITDA around the bottom of its prior outlook as rising poultry and fuel costs squeeze fourth-quarter results.
Sales increased 2.4% to CAD 1.03 billion, marking the company’s eighth consecutive quarter of year-over-year growth. Adjusted EBITDA rose 15.4% to CAD 128.9 million, while adjusted EBITDA margin expanded 140 basis points to 12.5%.
President and CEO Curtis Frank said the company still expects year-over-year revenue and adjusted EBITDA growth in the fourth quarter. For 2026, Maple Leaf now expects adjusted EBITDA around the bottom of its previous CAD 520 million to CAD 540 million range, while maintaining its forecast for mid-single-digit revenue growth.
Inflation weighs on fourth-quarter outlook
Frank said costs have risen more than expected across fuel, freight, feed, packaging and ingredients, while consumers remain under pressure and promotional spending has increased. He also cited weaker-than-expected private-label volumes.
In poultry, which accounts for approximately 40% of company sales, live bird costs increased about 3% from the third quarter and 8% year over year, effective Oct. 18, Frank said. Fuel surcharges had risen about 17% since the company’s second-quarter earnings call, he added.
Maple Leaf expects to absorb the cost pressure in the fourth quarter before realizing the benefits of cost management, pricing and other commercial actions in the first quarter of 2027. Frank said the company plans to adjust prices in that quarter but had not yet announced the changes to customers.
Asked about the revised EBITDA outlook, Frank cautioned that the company’s expectation was “around” the lower end of the range, rather than a precise CAD 520 million forecast.
The company also reduced its 2026 capital investment forecast to CAD 130 million to CAD 150 million from CAD 160 million to CAD 180 million. CFO David Smales said the change reflected project timing rather than a shift in priorities, and some spending would move into 2027.
Branded sales drive growth
Sales grew in both operating units. Poultry revenue increased 4.3%, helped by pricing and a shift toward higher-value channels. Smales said growth in food service and retail volumes was more than offset by lower industrial volume.
Prepared Foods sales rose 1.3%, supported by improved product mix and related-party revenue, partly offset by lower volume and higher trade promotion spending. Across the company, branded revenue increased 4.5%; branded Prepared Foods sales rose more than 6%, with branded volume up more than 4%.
Frank said the difference between branded and total Prepared Foods growth reflected the loss of certain private-label business in Canada and the United States. He attributed the changes largely to customer decisions about suppliers and product offerings, rather than directly to consumer demand.
Maple Leaf also expanded its protein-snacking distribution. Frank said Mighty Protein entered approximately 3,500 gas, convenience and dollar-store locations, while Greenfield Protein Kits added approximately 30,000 U.S. points of distribution. The Greenfield brand recorded roughly 40% growth in the quarter, he said.
Cash flow and longer-term plans
Earnings from continuing operations declined to CAD 22.3 million, or CAD 0.18 per basic share, from CAD 23.3 million, or CAD 0.19 per share, a year earlier. Adjusted earnings rose to CAD 44.9 million, or CAD 0.36 per basic share, from CAD 26.8 million, or CAD 0.21 per share.
Third-quarter free cash flow increased to CAD 175 million from CAD 46 million a year earlier. Smales said the increase on a continuing-operations basis was largely due to the timing of working-capital investment. Net debt to trailing 12-month adjusted EBITDA fell to 1.9 times from 2.2 times at the end of the second quarter.
Maple Leaf maintained its 2030 targets, including approximately CAD 5 billion in revenue and CAD 750 million in adjusted EBITDA. It also continues to plan the consolidation of its U.S. plant-protein manufacturing network in Indianapolis, with the transition expected to finish in the fourth quarter of 2027 and benefits beginning in 2028.
About Maple Leaf Foods (TSE:MFI)
Maple Leaf Foods (TSX: MFI) is a purpose-driven, protein-focused, brand-led consumer packaged goods company headquartered in Mississauga, Ontario. It proudly produces responsibly made, delicious food under powerhouse brands that include Maple Leaf, Maple Leaf Prime, Maple Leaf Natural Selections, Maple Leaf Mighty Protein, Musafir, Schneiders, Mina Halal, Greenfield Natural Meat Co, LightLife, Field Roast, and Yves Veggie Cuisine. Committed to Raising the Good in Food and bringing customers protein with purpose, Maple Leaf Foods delivers shared value for all its stakeholders by leading the way in safety and sustainability, building loved brands, operating with excellence, developing extraordinary talent, and broadening its impact through innovation and geographic reach.
