McCormick & Company Falls Despite Guidance Raise
McCormick & Company (MKC:US) raised its full-year adjusted earnings per share forecast despite reporting a soft set of figures for its third quarter.
The food company raised its profit outlook to a range of $2.62 to $2.67, up from the previous range of $2.60 to $2.65. Analysts were looking for FY EPS of $2.64.
For the third quarter, McCormick reported that its adjusted operating profit increased by 5.2%. Adjusted EPS was $0.65, compared to $0.69 in the same period last year, and in line with the estimate of $0.65.
Shares fell over 5% in early Tuesday trade.
Net sales amounted to $1.68 billion, marking a 5.6% year-over-year increase, slightly below the estimate of $1.7 billion. The gross profit margin was 37%, compared to 35.5% in the same period last year, surpassing the estimate of 36.5%.
Brendan M. Foley, President and CEO, stated, "We drove another quarter of strong performance, reflecting sustained demand and effective execution of our growth strategies across our Consumer and Flavor Solutions segments, reinforcing the confidence that we have in our competitive advantages and differentiation."
The company's results indicate robust underlying business trends that align with their expectations across all segments, except for the Consumer segment in the Asia-Pacific region. In this particular segment, the pace of China's economic recovery has been slower than originally anticipated.
Within the Consumer segment, sales growth in the Americas and EMEA regions showed positive performance. However, these gains were partially offset by adverse effects stemming from China's economic conditions.
Congress members Ro Khanna and Daniel Goldman were trading MKC shares in 2023, including Khanna’s purchase that was reported for August.
