McCormick & Company Incorporated (NYSE: MKC) surpassed analysts’ expectations for earnings in the third quarter of 2019 but revenues came in shy of estimates. The stock climbed 1.9% in premarket hours on Tuesday.
Net sales inched up 1% to $1.32 billion from the prior-year
period, but fell below forecasts of $1.34 billion. In constant currency, sales
grew 2%.
Net income was $191.9 million, or $1.43 per share, compared to $173.5 million, or $1.30 per share, last year. Adjusted EPS rose 14% to $1.46, beating estimates of $1.29. Adjusted EPS growth was driven by higher adjusted operating income, lower interest expense and a lower adjusted tax rate.
During the quarter, sales in the Consumer segment grew 3% year-over-year to $794.2 million. In constant currency, sales grew 4%. Sales in the Americas and Asia/Pacific rose both on a reported and constant currency basis, helped by higher volume and product mix. Sales in EMEA decreased due to extreme weather, lower sales of private label products and unfavorable pricing.
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In the Flavor Solutions segment, sales fell 2% year-over-year
to $535 million. Sales in the Americas and Asia-Pacific fell both on a reported
and constant currency basis due to warehouse transition activities and the
timing of customers’ promotional activities. In EMEA, sales fell 2% on a
reported basis but increased 4% in constant currency, helped by higher volume
and product mix.
For full year 2019, the company expects sales growth of 1-2% on a reported basis and 3-4% in constant currency. McCormick increased both its reported and adjusted EPS guidance for the year. GAAP EPS is now expected to be $5.20-5.25 versus the previous range of $5.09-5.19. Adjusted EPS is now expected to be $5.30-5.35 versus the prior outlook of $5.20-5.30.
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