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McCormick's (MKC) Q4 Earnings Beat Estimates, Sales Up Y/Y

In This Article:

McCormick & Company, Incorporated MKC posted fourth-quarter fiscal 2021 results, with the top and the bottom line increasing year over year. The company’s earnings and sales surpassed the Zacks Consensus Estimate. Sales increased year over year owing to strength in the Flavor Solutions and Consumer segments. The company is on track to capitalize on sustained shift to cooking more at home, higher digital engagement, clean and flavorful eating as well as trusted brands.

Quarter in Detail

Adjusted earnings of 84 cents per share rose 6% from 79 cents reported in the year-ago quarter on the back of higher sales. These were somewhat offset by elevated cost inflation. The metric surpassed the Zacks Consensus Estimate of 80 cents per share.

This global leader of flavors and spices generated sales of $1,730.3 million, up 11% year over year. This includes a favorable impact from currency translation of 1%. Sales from Cholula (acquired in November 2020) and FONA (acquired in December 2020) contributed 4% to the upside. Strength in the company’s Flavor Solutions and Consumer segments drove growth on the back of increased volume and pricing, new products as well as buyouts. On a constant-currency (cc) basis, sales were up 10%. The topline surpassed the Zacks Consensus Estimate of $1,700.9 million.

McCormick & Company, Incorporated Price, Consensus and EPS Surprise

McCormick & Company, Incorporated Price, Consensus and EPS Surprise
McCormick & Company, Incorporated Price, Consensus and EPS Surprise

McCormick & Company, Incorporated price-consensus-eps-surprise-chart | McCormick & Company, Incorporated Quote

The Zacks Rank #4 (Sell) company’s gross profit margin contracted 180 basis points to 40.6% thanks to increased cost inflation. These were somewhat countered by cost savings from the Comprehensive Continuous Improvement (CCI) program and favorable pricing.

Operating income was $276 million, up from $275 million reported in the year-ago quarter.

Segment Details

Consumer: Sales went up 10% (up 9% in cc) to $1,123.6 million. This includes 2% growth from the Cholula buyout. Sales in the Americas rose 13%. Consumer sales in Europe, Middle East and Africa (EMEA) fell 5% due to the lapping of a spike in demand witnessed in the year-ago quarter. Consumer sales in the Asia/Pacific market increased 16% (up 11% at cc) on the back of favorable demand for products related to away-from-home consumption. Increased sales for cooking-at-home products in the region were an upside.

Flavor Solutions: Sales in the segment increased 14% (up 12% at cc) to $606.7 million.This includes 7% growth from the FONA and Cholula buyouts. Sales in the Americas increased 14%, while the metric moved up 19% in the EMEA region. Sales in the Asia-Pacific region rose 4%, driven by higher growth from quick-service restaurants.