McCormick tops Wall Street estimates for earnings and revenue in Q3

McCormick tops Wall Street estimates for earnings and revenue in Q3
Written by:
Wajeeh Khan
29th September, 11:36
  • McCormick tops Wall Street estimates for earnings and revenue in Q3.
  • The food company reinstated its guidance for the full year.
  • The NYSE-listed firm announced a stock split (2 for 1) on Tuesday.

McCormick & Co. Inc. (NYSE: MKC) published its earnings report for the fiscal third quarter on Tuesday that came in better than what the experts had forecast. The company announced a stock split (2 for 1) and reinstated its guidance for the full year on the back of robust demand amidst the Coronavirus pandemic that continued to make people dine at home.

McCormick was reported trading about 1.5% up in premarket trading on Tuesday. Its shares are now priced at £156 versus a much lower £88 per share in March. Here’s what you need to know about the stock market volatility.

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McCormick’s Q3 financial results versus analysts’ estimates

McCormick said that its net income came in at £160.11 million in the third quarter that translates to £1.19 per share. In comparison, it had recorded a much lower £149.08 million of net income in the same quarter last year or £1.11 per share. McCormick donated £388 thousand to social justice organisations last week in support of black communities.

On an adjusted basis, the American food company earned £1.19 per share in Q3 that marginally topped FactSet consensus of £1.18 per share. In the prior quarter (Q2), McCormick had noted a 7.6% increase in sales, as per the report published in late June.

In terms of sales, the Baltimore-headquartered company registered £1.11 billion in the recent quarter versus the year-ago figure of £1.03 billion. According to FactSet, experts had anticipated £1.08 billion of sales for McCormick in the third quarter.

CEO Lawrence Kurzius remarks on Tuesday

CEO Lawrence Kurzius commented on the company’s financial results on Tuesday and remarked:

“Our results for the third quarter continued to be significantly impacted by the sustained consumer preference for cooking more at home. Our updated 2020 outlook reflects the strength of these year to date results and our confidence in the sustainability of higher at-home consumption trends.”

For the full year, McCormick now forecasts a 4% to 5% annualised growth in sales. It expects its earnings in fiscal 2020 to fall in the range of £4.38 per share to £4.44 per share. FactSet consensus for McCormick’s annual per-share earnings currently stands at a much higher £6.02.

At the time of writing, the owner of prominent brands like French’s and Kamis, has a market cap of £20 billion and a price to earnings ratio of 35.14.

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