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Serving professional chefs is part of Middleby's business. Image source: Getty Images.

Everyone has to eat, and Middleby (NASDAQ:MIDD) makes it its business to help get kitchen equipment to the homeowners and businesses that need it. The company has done an exceptional job of keeping up its growth rate through both strategic acquisitions and organic sales gains, and coming into its second-quarter financial report in early August, Middleby investors generally believe that it will be able to continue to grow at an impressive rate. Yet with the stock having seen declines since hitting new all-time highs in early June, some believe that Middleby might need to work harder to sustain its past level of success. Let's take an early look at Middleby to see whether it can deliver solid results this quarter.

Stats on Middleby

Data source: Yahoo! Finance.

How high can Middleby earnings climb?

In recent months, investors have gotten more optimistic about Middleby earnings, boosting their second-quarter estimates by a penny per share but making slightly larger increases of between 2% and 3% to their full-year 2016 and 2017 projections. The stock has done well overall, climbing about 10% since mid-April.

A big part of Middleby's share-price gains came in the aftermath of its first-quarter results, which once again were strong. Sales jumped 27% and net income rose by more than two-fifths to surpass expectations by a substantial margin, and the commercial foodservice and food processing equipment areas led the way forward for Middleby. The residential kitchen equipment division was negatively affected by product recalls stemming from its Viking acquisition as well as falling sales for another of its units. Middleby nevertheless believes that the acquisition of AGA Rangemaster will keep on delivering growth opportunities for the company going forward.

Middleby hits the M&A market again

Since then, Middleby has continued its string of acquisitions by announcing yet another buyout. In mid-May, the company said that it would buy Follett Corporation, which specializes in ice machines, ice and water dispensing equipment, ice storage and transport products, and medical-grade refrigeration products. As Middleby CEO Selim Bassoul explained it, "Follett offers unique product solutions to help customers improve safety, sanitation, labor productivity, and water and electric usage." Bassoul sees the acquisition as fitting well with Middleby's existing brands, and the opportunity to incorporate beverage and ice solutions into equipment could power innovation for the company as well.

The big question facing Middleby is the extent to which it can translate some of the high-quality commercial innovations it has developed for its corporate customers into residential solutions that homeowners will be interested in incorporating into their kitchens. With products that can cook food much more quickly than typical residential ovens, Middleby could choose to try to give homeowners more options toward improving convenience. At the same time, for commercial customers, Middleby's Kitchen of the Future concept has the potential to save labor costs by automating certain parts of the food production process.

For now, though, Middleby is poised to benefit from strength in the restaurant industry and the housing market. Restaurant customers have to show profits on their purchases, and so Middleby counts on solid comparable-restaurant sales gains to give its customers the financial wherewithal to spend on capital improvements like its equipment. Similarly, when homeowners are flush with cash, they're more likely to spend money renovating their kitchens and incorporating more Middleby products as a result.

In the Middleby report, investors should keep an eye on trends in the industry and how the company expects to keep moving forward. With so much of Middleby's gains having come from acquisitions, some shareholders will want evidence that the company is making the most of the money it spends on buying new product lines while at the same time also working to maximize the value of brands it has developed on its own.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Middleby. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. 

Can Middleby Keep Up Its Growth? @themotleyfool #stocks $MIDD