Shares of McCormick & Company, Incorporated (NYSE: MKC) rose over 2% on Thursday after the company delivered better-than-expected earnings results for the fourth quarter of 2024. The top line benefited from growth in volume. The spices maker plans to continue investing in key categories to boost volumes and drive growth against an uncertain consumer backdrop. Here are the key takeaways from the Q4 report:
Results beat estimates
In Q4 2024, McCormick’s net sales increased 3% year-over-year to $1.79 billion, beating estimates of $1.77 billion. Organic sales rose 2%. GAAP earnings per share dipped 1% to $0.80 compared to last year. Adjusted EPS fell 6% to $0.80 but came ahead of the consensus target of $0.77.
Business performance
In Q4, MKC’s organic sales growth was driven by a 2.2% rise in volume/mix. Price dipped 0.4%. Sales in the Consumer segment rose 4% to $1.08 billion on a reported basis, helped by growth in the Americas, and Europe, Middle East and Africa (EMEA) regions.
The Consumer business benefited from consumption growth and volume share gains in Spices & Seasonings and Recipe Mixes. The Asia Pacific (APAC) region saw sales decline due to a double-digit drop in volume. The company continues to face headwinds in China. Organic sales in the Consumer segment increased 3% in Q4.
Sales in the Flavor Solutions segment rose 1% YoY to $713 million in Q4. Organic sales were also up 1%. On a reported basis, the Americas region saw a slight dip in sales while the EMEA and APAC regions recorded growth. The Flavors division benefited from volume growth in branded foodservice in the Americas. Meanwhile, volume softness for quick service restaurants in the Americas and EMEA regions weighed on segment performance.
Outlook
McCormick’s outlook reflects its investments in key categories to boost volumes and drive long-term profitable growth even as the consumer and macro environment remain uncertain. For fiscal year 2025, the company expects reported sales growth of 0-2% and organic sales growth of 1-3% compared to FY2024. MKC expects the sales increase to be driven by growth across both its segments led by volume, as well as moderate improvement in its consumer business in China.
GAAP EPS is expected to range between $2.99-3.04, representing a growth of 2-4% while adjusted EPS is projected to range between $3.03-3.08, representing a growth of 3-5% YoY.
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