Revenue
Earnings
The consensus estimate for EPS in Q2 2024 is $0.59, which compares to adjusted EPS of $0.60 reported in the year-ago period. In Q1 2024, adjusted EPS rose 7% YoY to $0.63.
Points to note
On its Q1 quarterly call, McCormick said that the inflationary environment had led to customers seeking more value on their purchases. Higher inflation in the foodservice channel and slowing retail food prices had led to more people choosing to eat at home rather than dine out.
Last quarter, the company saw volume growth in spices and seasonings, recipe mixes, and homemade desserts. However, volumes in prepared foods, like frozen, witnessed declines.
In Q1, McCormick’s top line benefited from pricing but this was partly offset by volume declines and product mix, which were caused by the pruning of low-margin business and the divestiture of its canning business.
In the second quarter, McCormick will have lapped the impact of the DSD and private label product line business exits. The company plans to continue pruning low-margin businesses throughout the year. McCormick’s initiatives in brand marketing, new products, packaging, and category management can be expected to help drive growth during the second half of the year.
In Q1, gross margin expanded 140 basis points YoY to 37.4%, driven mainly by favorable product mix, cost savings, and pricing actions. In the second quarter, the company expects gross margins to modestly expand compared to the year-ago period.