Key Takeaways
- McCormick & Co.’s earnings and revenue exceeded forecasts on its product mix and cost savings.
- Sales were down slightly as demand slowed in the Americas and Asia-Pacific region.
- Adjusted operating income gained on higher gross margin and lower expenses.
McCormick & Co. (MKC) shares rose Tuesday as the spice maker posted better-than-expected results on its product offerings and cost-cutting.
The company reported third-quarter earnings per share (EPS) of $0.83, well above the $0.67 average of analysts surveyed by Visible Alpha. Revenue slipped 0.3% to $1.68 billion, but was also ahead of forecasts.
Consumer segment sales were virtually unchanged from a year ago at $937.4 million. Gains in Europe, the Middle East, and Africa (+2.9%) were offset by declines in the Americas (-0.4%) and the Asia-Pacific region (-0.9%).
Sales at the Flavor Solutions segment declined 0.7% to $742.4 million as the company sold off a small canning business.
Adjusted operating income increased 14.7% from 2023 to $288 million, driven mainly by gross margin expansion in addition to lower selling, general, and administrative (SG&A) expenses.
CEO Says McCormick Confident in Future Growth
Chief Executive Officer (CEO) Brendan Foley said McCormick is confident in its future growth because of “our proven track record, our broad and advantaged global portfolio, our alignment with consumer trends, as well as our differentiated heat platform.” Foley added the company would be “sharing the strategic roadmap and building blocks that support our long-term objectives” at its investor day on Oct. 22.
The company sees full-year adjusted EPS of $2.85 to $2.90, with sales to range from down 1% to up 1% from 2023 levels.
Shares of McCormick & Company rose about 1.5% to $83.45 by midday Tuesday and are up more than 20% year-to-date.
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