Shares of McCormick & Company, Inc. (NYSE: MKC) gained nearly 1% on Tuesday following the company’s announcement of its third quarter 2024 earnings results. The top and bottom line numbers surpassed projections and the spices and seasonings maker increased its earnings outlook for the full year of 2024. Here are the main takeaways from the report:
Better-than-expected results
McCormick’s net sales for the third quarter of 2024 remained flat compared to the prior year at $1.68 billion, but surpassed estimates of $1.67 billion. The top line reflects a 1% growth in volume, partly offset by pricing. GAAP EPS grew 32% to $0.83. Adjusted EPS rose 28% year-over-year to $0.83, beating projections of $0.67.
Business performance
In the third quarter, sales in McCormick’s Consumer segment remained flat compared to the year-ago period, as a 1% increase in volume was fully offset by a 1% decrease from pricing. The Americas and the Europe, Middle East, and Africa (EMEA) regions recorded growth in volumes during the quarter but the Asia-Pacific (APAC) region saw volumes decline, mainly due to the difficult macro environment in China.
Within Consumer, sales in the Americas remained flat, as benefits from volume growth and product mix were offset by a decline from pricing. Growth in core categories helped drive volume growth for the region. Sales in EMEA grew 3%, helped by broad-based volume growth across product categories. APAC sales dropped 1%, as slower demand in China led to volume declines. Outside China, sales growth was strong.
Sales in the Flavor Solutions segment decreased 1% in Q3. Sales in the Americas rose 2%, reflecting benefits from pricing, volume growth and product mix, as well as strong growth in branded foodservice. Sales in EMEA fell 8% due to the impact from the canning business divestiture as well as volume declines caused by softness in quick service restaurant volumes. Sales in the APAC region dropped 1%.
McCormick has been investing in areas with the highest value potential in its portfolio and these efforts are paying off. The company achieved positive volume growth globally during the quarter, reflecting improvements in both its divisions. It expects this momentum to continue into the fourth quarter of 2024.
Guidance hike
McCormick increased its earnings outlook for fiscal year 2024. It now expects GAAP EPS to be $2.81-2.86 versus the previous range of $2.76-2.81. Adjusted EPS is now projected to be $2.85-2.90 versus the prior outlook of $2.80-2.85.
The company expects sales for the year to range between down 1% to up 1% compared to last year. Sales are expected to benefit from pricing while volume trends are expected to see an improvement as the year progresses.