McCormick & Company (MKC): financial results for the second quarter of fiscal year 2024
McCormick & Company (NYSE: MKC) is a global leader in flavors, spices and seasonings. The company recently announced its financial results for the second quarter of fiscal year 2024, which exceeded market expectations in terms of both revenue and profitability.
Earnings per share (EPS): $MKC-0.7%
- Adjusted earnings: 69 cents per share, up from 60 cents in the same quarter of the previous year.
- Analysts' Estimate: Beat the estimate of 59 cents per share.
Revenue: $MKC-0.7%
- Total revenue: $1,643.2 million, a slight year-over-year decline of 1%.
- Consensus Estimate: Topped the Zacks Consensus Estimate of $1,626.2 million.
- Reasons for decline: sale of canning business and reduced customer demand, particularly in the Flavor Solutions segment.
Gross profit margin:
- Increased 60 basis points due to savings from the Comprehensive Continuous Improvement (CCI) program.
Selling, general and administrative (SG&A) expenses:
- Increase due to increased marketing expenses, partially offset by cost savings from the CCI program.
Performance by segment-
Consumer segment:
- Sales: $904.5 million, down 1%.
- Regional performance:
- Americas: down 2%.
- EMEA (Europe, Middle East and Africa): up 5%.
- APAC (Asia Pacific): Decrease of 5%.
Flavor Solutions segment:
- Sales: $738.7 million, down 1%.
- Regional performance:
- Americas: Revenue remained stable.
- EMEA: Down 7%.
- APAC: Up 6%.
Financial stability
- Cash and cash equivalents: $166.3 million.
- Long-term debt: USD 3 325.8 million.
- Total equity: USD 5 354,2 million.
- Net cash provided by operating activities: USD 301,5 million.
Outlook for fiscal year 2024
- Operating profit: Expected to increase by 8-10%.
- Adjusted earnings per share (EPS):** Expected in the range of $2.80-$2.85, an increase of 4-6% from the prior year and 5-7% on a constant currency basis.
- GAAP earnings per share: Expected in the range of $2.76-2.81, up from $2.52 in the prior year.
Strategic initiatives
- Investing in Growth: CCI and Global Operating Effectiveness (GOE) programs support investment in growth and operating margin expansion.
- Currency: currency movements are expected to negatively impact revenue, adjusted operating profit and adjusted earnings per share by approximately 1%.
McCormick & Company is reporting strong financial performance despite a slight decline in sales. The company is committed to achieving its long-term goals through strategic investments and efficiency programs. Its global portfolio and focus on growth areas make it attractive to investors seeking stable, long-term growth.
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