Why Is Food Company McCormick Stock Trading Lower Today?

Shares of McCormick & Co Inc MKC are trading lower in premarket on Tuesday after the company reported worse-than-expected first-quarter FY25 earnings.

The company reported first-quarter sales growth of 0.2% year-on-year to $1.605 billion, missing the analyst consensus estimate of $1.612 billion.

Flavor Solutions segment sales increased 1% from the first quarter of 2024 to $686 million, including a 2% unfavorable impact from currency.

Consumer segment sales of $919 million were consistent with the first quarter of 2024 and included a 1% unfavorable impact from currency.

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Gross profit was $604 million, with the margin expanding 20 basis points Y/Y to 37.6%.

Adjusted operating margin contracted 80 basis points to 14%. Adjusted EPS of $0.60 missed the consensus estimate of $0.64.

McCormick held $102.8 million in cash and equivalents as of February-end. The company generated an operating cash flow of $115.5 million in the quarter.

“We are pleased to start the year with solid first quarter results that are in line with our expectations, as we are managing a dynamic environment,” said President and CEO Brendan M. Foley.

Outlook Reaffirmed: McCormick sees FY25 sales growth of 0% – 2%. The company expects an adjusted EPS of $3.03 – $3.08 versus an estimate of $3.07.

The outlook reflects plans to offset costs related to U.S. import tariffs on China with CCI savings and targeted price adjustments.

Due to continued uncertainty regarding the implementation dates and scope of additional potential U.S. import tariffs or retaliatory tariffs put in place by other countries, this outlook does not include any additional impact from tariff actions in 2025.

Price Action: MKC shares traded lower by 3.42% at $77.60 in premarket at last check Tuesday.

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