Spice maker McCormick beats quarterly results on steady volumes, higher prices
Reuters
Published Mar 26, 2024 07:25AM ET
Updated Mar 26, 2024 10:01AM ET
-McCormick beat market expectations for first-quarter sales and profit on Tuesday, as consumer demand for its high-priced spices and seasonings held amid sticky inflation, sending its shares up nearly 9%.
Demand for McCormick (NYSE:MKC)'s hot sauces and other condiments remained steady as the company increased promotions, and took measures to narrow price gaps between its branded products and private label, slowing the pace of volume decline.
The company's volumes for the quarter fell 1% after declining 3% last quarter, while its prices rose 3% after rising 5% in the previous quarter.
McCormick expects volume trends to continue improving as the year progresses and driving volume during the second half of the year, CEO Brendan Foley said in a post earnings conference call.
Unlike its peers, Kraft Heinz (NASDAQ:KHC) and International Flavors & Fragrances (NYSE:IFF), whose volumes took a hit from aggressive price hikes undertaken in the previous quarters, the Cholula hot sauce maker saw its first-quarter sales rise.
The company posted net sales of $1.60 billion, compared with analysts' average estimate of $1.56 billion, according to LSEG data.
Gross profit margin for the quarter expanded 140 basis points to 37.4% from last year, helped by its cost-saving programs and pricing actions.
McCormick, which supplies to big retailers like Walmart (NYSE:WMT), reported adjusted earnings per share of 63 cents in the quarter ended Feb. 29, compared to analysts' average estimate of 58 cents per share.
The Hunt Valley, Maryland-based company, which also reiterated its annual forecast, was set for its best session in a year.
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Written By: Reuters
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