McCormick Q4 Earnings Miss Street View Impacted By COVID-Related Disruptions In China

McCormick & Co Inc MKC reported a fourth-quarter FY22 sales decline of 2% year-on-year to $1.695 billion, missing the consensus of $1.77 billion.
Flavor solutions segment sales increased by 9%, driven by growth in the Americas.
Consumer segment sales fell 8%, impacted by a 13% decline in the segment's EMEA sales and a 4% decrease in the Americas.
Gross profit was $624.4 million, with the margin declining 380 basis points Y/Y to 36.8%.
Adjusted operating margin compressed 140 basis points to 16.4%.
Adjusted EPS of $0.73 missed the consensus of $0.86.
McCormick held $334 million in cash and equivalents as of Nov. 30, 2022.
The company generated an operating cash flow of $651.5 million for FY22.
"COVID-related disruptions in China unfavorably impacted our expected sales growth for both the total Company and our Consumer segment by approximately 2%," said Chairman and CEO Lawrence E. Kurzius.
Outlook: McCormick sees FY23 revenue growth of 5% - 7%. Operating income is expected to grow 10% - 12%.
It expects FY23 Adjusted EPS of $2.56 - $2.61 (consensus $2.90).
Price Action: MKC shares are trading lower by 2.50% at $76.03 in premarket on the last check Thursday.

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