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Feb 28, 2021
McCormick Q1 2021 Earnings Report
Reported double-digit growth in the first quarter and increased the 2021 financial outlook.
Key Takeaways
McCormick & Company reported a strong first quarter with a 22% increase in sales and a 33% increase in adjusted earnings per share. The company has raised its financial outlook for 2021, expecting continued growth driven by consumer trends and strategic investments.
Sales rose 22% in the first quarter, with 20% growth in constant currency, driven by both the Consumer and Flavor Solutions segments.
Operating income increased to $236 million, while adjusted operating income rose 35% to $263 million.
Earnings per share was $0.60, and adjusted earnings per share increased by 33% to $0.72.
McCormick increased its full-year sales outlook to 8%-10% growth, or 6%-8% in constant currency, and raised its operating profit and earnings per share growth outlook.
McCormick
McCormick
McCormick Revenue by Segment
Revenue by Segment
Consumer Revenue
CapyFin.comFlavor Solutions Revenue
CapyFin.com Forward Guidance
McCormick has increased its financial outlook for 2021, expecting sales to grow by 8% to 10% and adjusted earnings per share to be in the range of $2.97 to $3.02.
Positive Outlook
- The company expects to grow sales by 8% to 10% compared to 2020.
- Organic sales growth is expected in both the Consumer and Flavor Solutions segments.
- Adjusted operating income is expected to grow by 9% to 11%.
- Adjusted earnings per share are projected to be in the range of $2.97 to $3.02.
- The company plans to return a significant portion of cash flow to shareholders through dividends and debt reduction.
Challenges Ahead
- Transaction and integration expenses related to the Cholula and FONA acquisitions are expected to be approximately $50 million in 2021.
- Approximately $8 million of special charges are expected in 2021 related to previously announced organization and streamlining actions.
- A 4% impact from incremental 2021 business transformation and first-half volume driven COVID-19 expenses.
- A 4% headwind from an anticipated increase in the projected adjusted effective tax rate to approximately 23%.
- COVID-19 continues to impact the Americas and EMEA regions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income