McCormick Q3 2020 Earnings Report
Key Takeaways
McCormick & Company reported an 8% increase in sales for the third quarter compared to the previous year. Operating income increased by 8%, and earnings per share rose to $1.53. The company has resumed its fiscal year 2020 guidance, expecting sales growth at the upper end of a 4% to 5% range.
Sales rose 8% in the third quarter from the year-ago period.
Operating income increased 8% to $273 million.
Earnings per share was $1.53, compared to $1.43 in the year-ago period.
McCormick resumed its guidance for fiscal year 2020, expecting sales growth at the upper end of a 4% to 5% range.
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McCormick
McCormick Revenue by Segment
Forward Guidance
McCormick expects to grow sales compared to 2019 at the upper end of a 4% to 5% range, which in constant currency is a 5% to 6% projected growth rate. McCormick projects 2020 earnings per share to be in the range of $5.60 to $5.68 compared to $5.24 of earnings per share in 2019.
Positive Outlook
- Expected sales growth at the upper end of a 4% to 5% range.
- Sales growth expected to include the impact of pricing.
- Operating income in 2020 is expected to grow from 6% to 7% from $958 million of operating income in 2019.
- Company projects 2020 earnings per share to be in the range of $5.60 to $5.68 compared to $5.24 of earnings per share in 2019.
- Shift in consumer demand to at home consumption will continue.
Challenges Ahead
- COVID-19 related costs will reduce growth in operating income.
- A higher level of incentive compensation will reduce growth in operating income.
- There remains a degree of uncertainty about the pace and shape of the COVID-19 recovery.
- Operating environment continues to evolve.
- Anticipated mid-single digit inflationary pressure.
Revenue & Expenses
Visualization of income flow from segment revenue to net income