McCormick Set to Release Q4 Earnings: Should You Expect a Beat?

Core Viewpoint - McCormick & Company is expected to report revenue growth in its fourth-quarter fiscal 2024 earnings, with a consensus estimate of $1.77 billion, reflecting a 0.8% increase from the previous year [1]. Revenue and Earnings Estimates - The consensus estimate for earnings has decreased by a penny to 77 cents per share, indicating a 9.4% decline from the same period last year [2]. - McCormick has a trailing four-quarter earnings surprise average of 13.8% [2]. Factors Influencing Results - McCormick achieved global positive volume growth in the third quarter of fiscal 2024, with solid growth in the Consumer segment despite challenges in China [3]. - The Flavor Solutions segment saw sequential volume improvements, particularly in Branded Foodservice, showcasing the company's resilience in complex macroeconomic conditions [3]. - Strategic investments in innovation and distribution expansion are yielding positive results, focusing on brand marketing, product innovation, and proprietary technology [4]. Future Expectations - For 2024, McCormick anticipates a favorable impact from prior pricing actions, with expected improvements in volume trends due to strong brands and targeted investments [5]. - The company plans to discontinue low-margin businesses, which may pressure volume in 2024 but is seen as a long-term strategic move [5]. - Brand marketing expenditures are expected to increase by a high-single-digit percentage for fiscal 2024, with a double-digit rise in investments [7]. Cost and Margin Outlook - Operating profit for the fourth quarter is likely to remain flat year over year, with margin expansion constrained by supply-chain investments and inflationary pressures [8]. - A low-single-digit increase in cost inflation is anticipated for fiscal 2024 [8]. Earnings Prediction - The model predicts an earnings beat for McCormick, supported by a positive Earnings ESP of +1.02% and a Zacks Rank of 3 (Hold) [9].