McCormick Q3 2021 Earnings Report
Key Takeaways
McCormick reported an 8% sales increase in the third quarter, driven by growth in both the Consumer and Flavor Solutions segments, with contributions from the Cholula and FONA acquisitions. Earnings per share was $0.79, and adjusted earnings per share rose 5% to $0.80. The company updated its full-year sales outlook but lowered its adjusted operating income outlook due to higher inflation and industry-wide logistics challenges.
Sales rose 8% in the third quarter from the year-ago period; in constant currency, sales grew 5%.
Earnings per share was $0.79, while adjusted earnings per share rose 5% to $0.80.
Flavor Solutions segment sales increased 21%, or 17% in constant currency, driven by acquisitions and growth with packaged food, beverage companies, and away-from-home products.
Consumer segment sales grew 1%, including a 2% favorable impact from currency, on top of 15% growth in the third quarter of 2020.
McCormick
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McCormick Revenue by Segment
Forward Guidance
McCormick expects to grow sales by 12% to 13% compared to 2020 and adjusted earnings per share to be in the range of $2.97 to $3.02.
Positive Outlook
- Sustained shift to cooking more at home.
- Growing consumer interests in clean and flavorful eating.
- Increased digital engagement.
- Trusted brands.
- Purpose-minded practices.
Challenges Ahead
- Higher inflation.
- Industry-wide logistics challenges.
- Incremental 2021 business transformation expenses.
- First-half volume driven COVID-19 related expenses.
- An anticipated increase in the projected adjusted effective tax rate.
Revenue & Expenses
Visualization of income flow from segment revenue to net income