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May 31, 2020
McCormick Q2 2020 Earnings Report
Reported strong sales and profit growth driven by consumer segment.
Key Takeaways
McCormick reported an 8% sales increase in the second quarter from the year-ago period. In constant currency total sales grew 10% with significant consumer segment growth partially offset by a substantial sales decline in the flavor solutions segment. Earnings per share was $1.46 in the second quarter as compared to $1.12 in the year-ago period. Adjusted earnings per share rose 27% to $1.47 from $1.16 in the year-ago period.
Sales rose 8% in the second quarter from the year-ago period.
Operating income increased 24% to $257 million.
Earnings per share was $1.46 as compared to $1.12 in the year-ago period.
Adjusted earnings per share rose 27% to $1.47 from $1.16 in the year-ago period.
McCormick
McCormick
McCormick Revenue by Segment
Revenue by Segment
Consumer Revenue
CapyFin.comFlavor Solutions Revenue
CapyFin.com Forward Guidance
The company believes there will be a shift in demand due to COVID-19 for the balance of the year but cannot predict the level of consumption at home or away from home, or the impact of possible resurgences of the COVID-19 virus. The company is focused on execution and is ready to perform in this dynamic environment as it has thus far. The company reaffirms its long-term financial objectives and capital allocation priorities remain unchanged.
Positive Outlook
- Expecting an overall increase in consumer demand driven by increased cooking at home.
- Continues to see elevated demand as the second half of the fiscal year begins.
- Expecting customer demand from packaged food companies to be consistent with levels prior to COVID-19.
- Restaurant and other foodservice customers are beginning to recover.
- Demand from restaurant and other foodservice customers to rebound gradually throughout the second half of the fiscal year.
Challenges Ahead
- Cannot predict the level of consumption at home or away from home.
- Cannot predict the impact of possible resurgences of the COVID-19 virus.
- High degree of uncertainty about the pace and shape of the COVID-19 recovery.
- Not providing new fiscal 2020 guidance at this time.
- Demand from restaurant and other foodservice customers not return to the same level as the year-ago period.
Revenue & Expenses
Visualization of income flow from segment revenue to net income