McCormick Q3 Earnings Top Estimates, MKC Volumes Improve Y/Y

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].