McCormick & Company, Incorporated (NYSE:MKC) reported third-quarter FY23 sales growth of 6% year-on-year to $1.684 billion, missing the analyst consensus estimate of $1.70 billion.
Consumer segment sales rose 1% to $937.1 million, and Flavor Solutions Segment increased 11.9% to $747.6 million.
In the Consumer segment, sales growth in the Americas and EMEA regions was partially offset by an unfavorable China impact, the company noted.
Gross profit was $622.8 million, with the margin expanding 150 basis points Y/Y to 37%.
Adjusted operating margin contracted 10 basis points to 14.9%.
Adjusted EPS of $0.65 was in line with the consensus estimate.
“We drove another quarter of strong performance, reflecting sustained demand and effective execution of our growth strategies across our Consumer and Flavor Solutions segments, reinforcing the confidence that we have in our competitive advantages and differentiation,” said Brendan M. Foley, President and CEO.
McCormick held $154.7 million in cash and equivalents as of August 31, 2023. Operating cash flow through the third quarter of 2023 was $660 million versus $250 million in the year-ago period.
Outlook: McCormick reaffirmed FY23 revenue growth guidance of 5% – 7%. The company expects sales growth to be driven primarily by pricing actions, which, in conjunction with cost savings, are expected to offset inflationary pressures.
MKC raised FY23 Adjusted EPS outlook to $2.62 – $2.67 from $2.60 – $2.65 (consensus $2.64).
Price Action: MKC shares are trading lower by 4.94% in premarket at $71.03 on the last check Tuesday.
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