The upcoming report from McCormick (MKC) is expected to reveal quarterly earnings of $0.77 per share, indicating a decline of 9.4% compared to the year-ago period. Analysts forecast revenues of $1.77 billion, representing an increase of 0.8% year over year.The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Ahead of a com ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering McCormick (MKC) , which belongs to the Zacks Food - Miscellaneous industry.This spices and seasonings company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 19.50%.For the last reported quarter, McCormick came out with earnings of $0.83 per share ver ...

The market expects McCormick (MKC) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended November 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released o ...

Group 1: Acquisition Consideration - McCormick & Company is considering acquiring Sauer Brands from Falfurrias Capital Partners for a valuation exceeding $1 billion [1] - Sauer Brands is known for its Duke's mayonnaise and also produces spices, herbs, and other condiments [1] Group 2: Recent Financial Performance - As of August 31, 2024, McCormick held $200.8 million in cash and equivalents [3] - The company reported third-quarter sales of $1.68 billion, surpassing the analyst consensus estimate of $1.67 billion [3] - Adjusted EPS for the quarter was 83 cents, exceeding the street view estimate of 67 cents [3] - McCormick anticipates fiscal 2024 sales growth between -1% and 1% and expects EPS of $2.85 to $2.90, compared to the analyst consensus of $2.86 [3] Group 3: Market Sentiment and Stock Performance - Jim Cramer recommended buying McCormick on CNBC's "Mad Money Lightning Round," describing it as an excellent investment idea [4] - McCormick's stock has surged over 15% year-to-date [4] - As of the publication date, McCormick's stock price was up 0.64% at $80.68 [5]

Group 1: McCormick - McCormick is a global leader in flavor, spices, and seasoning, generating over $6.5 billion in annual sales across 150 countries [3] - The company declared a quarterly dividend of $0.42 per share, marking its 100th consecutive year of dividend payments, with a current yield of 2% [3] - Management's Comprehensive Continuous Improvement (CCI) program contributed to a 60-basis-point improvement in gross margins in Q2 compared to the prior year, with expectations for continued improvement in the second half of 2024 [4] - Focus on innovation in higher-growth product opportunities aims to reverse slowing sales volume, despite a recent divestment affecting sales results [5] Group 2: Stanley Black & Decker - Stanley Black & Decker is a global leader in tools and outdoor products, owning well-known brands like DeWalt and Craftsman [6] - The company achieved a 28.4% increase in gross margins in Q2, up 600 basis points from the previous year, as part of its cost-reduction efforts [7] - Strong cash generation allowed for $1.2 billion in debt reduction during Q2, alongside a respectable dividend yield of 3% [8] - The company is focused on cutting costs and reinvesting in high-opportunity products and brands, making it a solid long-term hold for income investors [9] Group 3: Investment Outlook - Both McCormick and Stanley Black & Decker have underperformed the S&P 500 over the past three years but are actively working to improve operating efficiencies and cut costs [10] - Both companies possess strong brand portfolios that are expected to drive future growth through innovation and reinvestment [10] - While it may take time for their stock prices to regain traction, they are positioned to rebound and offer respectable dividend yields during the wait [10]

Core Viewpoint - McCormick & Co. (NYSE: MKC) is expected to benefit from the trend of increased food consumption at home as consumers reduce discretionary spending on dining out, leading to higher demand for its products [1] Group 1: Company Analysis - The investment thesis suggests that MKC is positioned well to capitalize on changing consumer behavior towards home dining [1] - The company is viewed as having long-term growth potential, particularly as it aligns with value investing principles [1] Group 2: Market Context - The current economic environment is prompting consumers to pull back on discretionary spending, which is likely to drive demand for food products that can be prepared at home [1]

Financial Performance - Net sales for the three months ended August 31, 2024, were $1,679.8 million, a slight decrease from $1,684.7 million in the same period last year[5] - Gross profit increased to $649.9 million for the three months ended August 31, 2024, compared to $622.8 million in the prior year, reflecting a gross margin improvement[5] - Operating income rose to $286.5 million for the three months ended August 31, 2024, up from $245.0 million year-over-year, indicating a 16.3% increase[5] - Net income for the three months ended August 31, 2024, was $223.1 million, compared to $170.1 million in the same period last year, representing a 31.1% increase[7] - Earnings per share (EPS) for the three months ended August 31, 2024, were $0.83, up from $0.63 in the prior year, marking a 31.7% increase[5] - Total operating income excluding special charges for the nine months ended August 31, 2024, was $762.0 million, up from $712.9 million in the same period of 2023, representing a growth of 6.9%[81] - Operating income excluding special charges for the three months ended August 31, 2024, was $288.4 million, compared to $251.1 million for the same period in 2023, reflecting an increase of 14.8%[79] Cash Flow and Assets - Cash and cash equivalents increased to $200.8 million as of August 31, 2024, compared to $166.6 million at the end of the previous period[9] - Total assets grew to $13,204.9 million as of August 31, 2024, up from $12,862.3 million at the end of the previous period[9] - The company reported a net cash flow provided by operating activities of $463.2 million for the nine months ended August 31, 2024, down from $660.1 million in the prior year[12] Shareholder Returns - The company declared cash dividends of $0.42 per share for the three months ended August 31, 2024, compared to $0.39 in the same period last year[5] - The company paid dividends totaling $112.9 million during the three months ended August 31, 2024[14] - As of August 31, 2024, $472.5 million remained of the $600 million share repurchase program authorized in November 2019[73] Liabilities and Equity - Total liabilities decreased slightly to $7,753.9 million as of August 31, 2024, compared to $7,778.8 million at the end of the previous period[9] - Total shareholders' equity as of August 31, 2024, was $5,451.0 million, up from $5,354.2 million at the end of May 2024[14] Special Charges and Costs - Special charges recorded during the three months ended August 31, 2024, amounted to $1.9 million, primarily related to the Global Operating Effectiveness program[29] - Special charges for the three months ended August 31, 2024, totaled $1.9 million, compared to $6.1 million in the same period of 2023, indicating a significant reduction[81] - The GOE program incurred total costs of approximately $48 million as of November 30, 2023, with special charges of $4.6 million recognized during the nine months ended August 31, 2024[31] Operational Insights - The company expects higher net sales and cash flow in the second half of the fiscal year due to seasonal consumer purchasing patterns[21] - The company plans to continue investing in new product development and market expansion strategies to drive future growth[5] - The company has integrated manufacturing and warehousing across its segments to maximize cost efficiencies, although segments are managed separately[78] Pension and Other Benefits - For the nine months ended August 31, 2024, total contributions to pension plans were $5.2 million, compared to $7.4 million for the same period in 2023[59] - The expected return on plan assets for the nine months ended August 31, 2024, was $(29.7) million, compared to $(31.8) million for the same period in 2023[59] - The net aggregate amount of pension and other postretirement benefits income, excluding service cost components, was $(1.9) million for Q3 2024, compared to $(2.7) million for Q3 2023[60] Foreign Currency and Financial Instruments - As of August 31, 2024, the notional amount of outstanding foreign currency exchange contracts was $1,110.7 million, up from $1,000.4 million as of November 30, 2023[40] - The company recognized a gain of $2.4 million from cross currency contracts for the nine months ended August 31, 2024, compared to a loss of $17.6 million in the same period of 2023[48] Stock Options and Compensation - Stock-based compensation for the three months ended August 31, 2024, was $8.8 million[14] - The weighted-average grant-date fair value of stock options granted in 2024 was $17.63, down from $19.35 in 2023[62] - The number of stock options outstanding at the end of the period increased to 6.1 million in 2024 from 5.3 million in 2023[63]

Group 1 - The recommendation to invest in McCormick & Company, Incorporated (NYSE: MKC) was made in October 2023, indicating a strategic entry point as the stock was at a low [1] - The investment call was reiterated in March 2024, suggesting continued confidence in the company's performance and potential for growth [1] Group 2 - The company is promoting a significant sale on its services, offering a 75% discount compared to the standard price of $1,668, which is time-sensitive and contingent on new member sign-ups [2] - A money-back guarantee is provided to ensure customer satisfaction, indicating a focus on customer retention and trust [2]

Financial Data and Key Metrics Changes - In Q3 2024, sales were flat in constant currency, reflecting flat pricing and a 1% volume growth, impacted by the canning divestiture [5][19] - Adjusted earnings per share increased to $0.83 from $0.65 year-over-year, primarily due to increased operating profit and discrete tax benefits [24] - Adjusted operating income increased 15% compared to Q3 2023, with gross margin expansion and lower SG&A expenses contributing to this growth [22][27] Business Line Data and Key Metrics Changes - In the Consumer segment, sales were comparable to the prior year, with a 1% volume growth offset by pricing investments [19] - Flavor Solutions segment saw constant currency sales comparable to the prior year, with a 3% increase in the Americas driven by volume growth [20] - The Americas Consumer segment experienced solid unit consumption growth in spices and seasonings, outperforming private label [11][12] Market Data and Key Metrics Changes - In EMEA, constant currency consumer sales increased by 3%, driven by a 4% volume growth [19] - Asia Pacific, excluding China, delivered strong volume-led sales growth, while China faced challenges leading to flat sales [7][20] - E-commerce drove double-digit consumption growth in the Americas and EMEA, significantly contributing to unit consumption growth [13] Company Strategy and Development Direction - The company remains focused on prioritized investments in key categories to strengthen volume trends and drive long-term sustainable growth [25][26] - The strategic roadmap emphasizes innovation and alignment with consumer trends, particularly in flavor exploration and healthy cooking [10][17] - The company plans to share more details on its growth plans at the upcoming Investor Day [16][30] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are resilient but value-seeking, leading to smaller shopping baskets and a focus on reducing waste [8] - The outlook for China remains challenging, with expectations of slight declines in consumer sales for the year [26][47] - Management expressed confidence in achieving the mid to high end of projected constant currency sales growth for 2024, despite uncertainties in the consumer environment [30][31] Other Important Information - The company returned $338 million to shareholders through dividends and invested $189 million in capital expenditures [25] - The adjusted effective tax rate for Q3 was 16.8%, benefiting from the resolution of an outstanding tax matter [23] Q&A Session Summary Question: Volume lift from pricing actions and investments - Management confirmed that volume growth is on track and outperforming private label across core categories, with ongoing investments in brand marketing and innovation [32] Question: Prepared foods business stabilization - Management indicated that customer plans are performing as expected, with gradual improvement in volume trends across the industry [34] Question: Timing of customer activities impact on Q3 results - Management acknowledged a positive impact from customer activities in Q3, which is expected to normalize in Q4 [38] Question: 2025 outlook and EPS growth - Management refrained from providing specific guidance for 2025 but expressed confidence in the underlying fundamentals and growth plans [40][41] Question: Gross margin guidance and factors affecting it - Management explained that gross margin guidance remains unchanged due to normalization of product mix and supply chain investments impacting Q4 [43][44] Question: Challenges in the hot sauce market - Management noted ongoing pressure from competitors' trial sizes but expressed optimism about their own trial size offerings and innovation plans [57]

Core Insights - McCormick & Company reported strong third-quarter fiscal 2024 results, with both top and bottom lines exceeding Zacks Consensus Estimates and year-over-year earnings growth [1][4]. Financial Performance - Adjusted earnings per share (EPS) reached 83 cents, up from 65 cents in the prior year, surpassing the Zacks Consensus Estimate of 68 cents, reflecting a 22.1% surprise [4]. - Total sales amounted to $1,679.8 million, remaining flat year over year, but exceeding the Zacks Consensus Estimate of $1,664 million [5]. - Gross profit margin expanded by 170 basis points, attributed to improved product mix and cost savings from the Comprehensive Continuous Improvement (CCI) program [6]. Segment Performance - In the Consumer segment, sales were flat at $937.4 million, with a 1% decline in pricing offset by a 1% increase in volume [7]. - Flavor Solutions segment sales decreased by 1% to $742.4 million, with a constant-currency basis showing flat sales year over year [8]. Strategic Initiatives - Management is focusing on growth levers such as brand marketing, product innovation, and cost-saving initiatives to enhance operating margins and fund future investments [3]. - The company anticipates that its strategic decisions, including divesting the canning business, will impact volume trends but is expected to improve overall profitability [12]. Future Outlook - For fiscal 2024, McCormick expects sales to range between a 1% decline and 1% growth, with adjusted operating income projected to grow by 4-6% [11][13]. - Management forecasts adjusted EPS for 2024 to be between $2.85 and $2.90, indicating a 5-7% increase from the previous year [13].