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Who Were the Outliers in the Consumer Sector Last Week?

(Continued from Prior Part)

Price movement

McCormick & Company (MKC) rose by 4.4% and closed at $100.53 per share at the end of the fifth week of March 2016. The price movements on a weekly, monthly, and YTD (year-to-date) basis were 4.4%, 7.5%, and 17.5%, respectively.

Currently, McCormick is trading 5.5% above its 20-day moving average, 10.3% above its 50-day moving average, and 19.2% above its 200-day moving average.

The Vanguard Consumer Staples ETF (VDC) invests 0.59% of its holdings in McCormick & Company. VDC tracks a market-cap-weighted index of stocks in the Consumer Staples sector of the US market. VDC’s YTD price movement was 5.6%.

The market caps of McCormick & Company’s competitors are as follows:

• Kraft Heinz (KHC) – $98.5 billion

• Tyson Foods (TSN) – $24.2 billion

• Pinnacle Foods (PF) – $5.2 billion

Performance in fiscal 1Q16

McCormick & Company reported fiscal 1Q16 net sales of $1,030.2 million—a rise of 2.0% compared to net sales of $1,010.4 million in fiscal 1Q15. The company’s cost of goods sold as a percentage of net sales fell by 1.6%. Its gross profit margin rose by 1.8% in fiscal 1Q16—compared to fiscal 1Q15.

Its net income and EPS (earnings per share) rose to $93.4 million and $0.73, respectively, in fiscal 1Q16—compared to $70.5 million and $0.55, respectively, in fiscal 1Q15.

McCormick’s cash and cash equivalents rose by 36.7% and its inventories fell by 0.88% in fiscal 1Q16—compared to fiscal 1Q15. Its current ratio and debt-to-equity ratio rose to 1.2x and 1.6x, respectively, in fiscal 1Q16—compared to 1.1x and 1.5x, respectively, in fiscal 1Q15.

McCormick’s price-to-earnings and price-to-book value ratios are 30.5x and 7.5x, respectively, as of April 1, 2016.

Projections

The company made the following projections for fiscal 2016:

• It expects sales growth of 4%–6% on a constant currency basis—driven by base business increases, new products, pricing, and acquisitions.

• The company expects adjusted operating income growth of 6%–8%. This excludes $7 million of special charges related to the organization and streamlining actions.

• It expects adjusted EPS of $3.68–$3.75. This excludes the impact of special charges.

The company declared a quarterly dividend of $0.43 per share on its common stock. The dividend will be paid on April 25, 2016, to shareholders of record at the close of business on April 11, 2016.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Analyzing the Outliers in the Consumer Space

• Part 2 - Iconix Brand’s Top and Bottom Line Fell in 4Q15 and 2015

• Part 3 - Cal-Maine Foods’ Performance Rose in 3Q16