McCormick & Company, Incorporated (NYSE:MKC) reported fourth-quarter revenues of $1.753 billion, missing the analyst consensus of $1.79 billion. Sales increased 3% from the year-ago period.
The company registered adjusted earnings per share of $0.85, beating the analyst consensus of $0.79.
Gross profit margin expanded by 320 basis points versus the fourth quarter of last year. This expansion was driven by a favorable product mix, cost savings led by the Company’s Comprehensive Continuous Improvement (CCI) and Global Operating Effectiveness (GOE) programs, and pricing actions that were partially offset by cost inflation.
Operating income was $297 million in the fourth quarter of 2023 compared to $264 million in the fourth quarter of 2022.
The company said quarterly earnings gained from higher operating income, with income from unconsolidated operations driven by strong performance in the largest joint venture, McCormick de Mexico.
The company exited the quarter with cash and equivalents worth $166.6 million.
“Our improved profitability and cash generation will help fuel continued business investments early in 2024 to drive improved volume performance, which will build throughout the year,” said Brendan M. Foley, President and CEO.
Outlook: McCormick expects FY24 adjusted EPS Of $2.80-$2.85 versus consensus of $2.87.
The company expects FY24 sales percentage change to range (2)%-0% year over year, while operating income in 2024 is expected to grow by 8% to 10%.
The company’s strategic decisions in 2023 to discontinue low margin business and divest a small canning business will impact volume growth in 2024.
Price Action:Â MKC shares are trading higher by 3.63% to $68.17 on the last check Thursday.
Photo by Mike Mozart via Flickr
