Why Food Company McCormick Shares Are Shooting Higher Today

Shares of McCormick & Co Inc MKC are trading higher after the company reported better-than-expected second-quarter FY24 earnings.

The company reported a second-quarter FY24 sales decline of 1% year-on-year to $1.643 billion, beating the analyst consensus estimate of $1.637 billion.

Flavor Solutions segment sales declined by 1%, reflecting a 1% increase from pricing offset by a 2% decline in volume and product mix as well as the strategic decision to divest its canning business.

Consumer segment sales decreased 1%, with minimal currency impact, reflecting a 1% decrease from pricing partially offset by modest volume growth.

Gross profit was $619.6 million, with the margin expanding 60 basis points Y/Y to 37.7%.

Adjusted operating margin expanded 20 basis points to 14.2%. Adjusted EPS of $0.69 beat the consensus estimate of $0.59.

McCormick held $166.3 million in cash and equivalents as of May-end. The company generated an operating cash flow of $302 million in the quarter.

“The investments we made in our Consumer segment drove substantial sequential volume improvement in the second quarter, leading to volume growth, and we expect continued momentum for the second half of the year,” said President and CEO Brendan M. Foley.

Outlook Reaffirmed: McCormick sees FY24 sales growth of (2)% – 0%. The company expects an adjusted EPS of $2.80 – $2.85 versus an estimate of $2.87.

The company plans to host its Investor Day on October 22, 2024, in Hunt Valley, Maryland, and discuss its long-term strategy and financial outlook.

Price Action: MKC shares are trading higher by 3.81% at $70.25 in premarket at last check Thursday.

Photo by Mike Mozart via Flickr