McCormick stock soars after surpassing expectations in Q1 earnings

McCormick stock soars after surpassing expectations in Q1 earnings

© Reuters. McCormick (MKC) Stock Bursts on Pace of First Quarter Earnings

McCormick & Co. (NYSE:) outperformed earnings expectations in its first-quarter report, sending its shares up nearly 6% in premarket trading Tuesday.

The food company reported first-quarter earnings per share (EPS) of $0.63, beating consensus estimates of $0.57. Revenue came in at $1.6 billion, compared to a forecast of $1.55 billion.

Its gross profit margin improved to 37.4%, up from 36% year-on-year, also above the 36.9% estimate.

Looking ahead, McCormick forecasts its 2024 EPS to be between $2.76 and $2.81, showing growth from 2023 EPS of $2.52. Special fees are expected to reduce 2024 EPS by $0.04. However, taking these charges into account, the company’s 2024 adjusted EPS is expected to be between $2.80 and $2.85, compared to the consensus projection of $2.83.

Sales for 2024 are expected to range from a 2% decrease to no change from 2023, or from a 1% decrease to a 1% increase at constant exchange rates.

McCormick forecasts an 8 to 10% increase in operating profit. After adjusting for special charges in both years, adjusted operating profit is expected to increase 3-5%, or 4-6% at constant currency, supported by gross margin expansion despite increased investments in marketing. the brand.

“We are pleased to begin the year with a strong first quarter performance, which reflects the early success of our priority investments to drive impactful results,” said Brendan M. Foley, President and CEO of the Company.

“We delivered sequential volume improvement in our Consumer and Flavor Solutions segments.”

Commenting on the report, analysts at Goldman Sachs said they “expect stocks to respond positively to higher first-quarter revenue and net income.”

“We expect the 8 a.m. ET conference call to focus on the outlook for MKC volume improvement over the remainder of the year, including in key U.S. spice blends and recipes, as well as pressure areas cited in American mustard, hot sauce and prepared foods. “, note the analysts.

They are also eagerly awaiting information on the expected progression of gross margins for the remainder of fiscal 2024, with the fiscal second quarter expected to see a slight year-over-year increase, compared to a 140 basis point improvement in the first trimester. as well as the company’s capital allocation strategies.

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