McCormick Reports Q3 Earnings Below Estimates; Reaffirms FY22 Outlook

McCormick & Co Inc MKC reported third-quarter FY22 sales growth of 3% year-on-year to $1.59 billion, missing the consensus of $1.78 billion.
Flavor solutions segment sales increased by 6%, driven by growth in the Americas and Asia-Pacific regions.
Consumer segment sales grew 0.7%, impacted by a 13% decline in the segment's EMEA sales.
Gross profit was $566.7 million, with the margin declining 320 basis points Y/Y to 35.5%.
Adjusted operating margin compressed 260 basis points to 15%.
Adjusted EPS of $0.69 missed the consensus of $0.94.
The company generated an operating cash flow of $250.1 million year-to-date.
"During the third quarter, supply chain challenges continued, and recovery of certain constrained materials has taken longer than expected," said Chairman and CEO Lawrence E. Kurzius.
Outlook: McCormick reiterated its FY22 sales, operating income, and EPS outlook.
McCormick sees FY22 sales growth of 3% - 5% Y/Y on a constant currency basis. It expects FY22 Adjusted EPS of $2.63 - $2.68, against the consensus of $2.84.
Price Action: MKC shares are trading higher by 3.33% at $75.75 on the last check Thursday.

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