Latest news with #FlavorSolutions
Yahoo
2 hours ago
- Business
- Yahoo
McCormick CEO ahead of July 4: Consumers are digging into leftovers
It's the leftover economy headed into July 4 grilling season. "There's more going on than just consumers focusing on leftovers. We see a big convergence right now. Consumers seeking value but also health and wellness. And it's really creating a lot of growth opportunity for McCormick," McCormick (MKC) CEO Brendan Foley said on Yahoo Finance's Opening Bid (watch above). Foley added that consumers are looking for value in flavor products and buying bigger sizes. They're also purchasing more meat and produce to make meals at home. "They're making more trips to the grocery store, maybe putting a few items fewer in the basket. But largely they're still exploring with flavor, and they still need flavor," he said. With shoppers battling higher prices for everything from sneakers to snack foods in part due to tariffs, growth continues to be a tough slog for packaged food players such as McCormick. McCormick's second fiscal quarter sales rose 1% from the prior year. Adjusted earnings per share was unchanged year over year but beat analyst estimates by $0.04. Sales for the consumer segment rose 2.9%, powered by demand for hot sauce and mustard. The flavor solutions segment, which supplies products to restaurants, remained under pressure. Sales for the segment dropped 1.3% from a year ago. "Broad weak CPG and QSR trends remain a watch-out in the Flavor Solutions business, but despite the softer environment, margin progression remains on track," Stifel analyst Matthew Smith wrote in a note. Smith maintained a Hold rating on McCormick shares. For the full fiscal year, McCormick forecasts sales to range from flat to up 2% year over year. Adjusted operating profits are expected to jump 3% to 5% as the company pushes through price increases. Podcast: Visa's chief economist on one of the biggest consumer shifts he is seeing This week, fellow food player General Mills (GIS) warned that more-cautious shoppers are pressuring sales of cereal and snack foods. The company missed profit estimates and had an underwhelming earnings call. Investors have generally soured on Big Food stocks amid the various headwinds on the business and relatively high valuation multiples, which are partly driven by their often-defensive business models in times of weak economic growth. McCormick shares are up 1.7% year to date relative to a 4.5% advance for the S&P 500 (^GSPC). Campbell's (CPB) shares are down 26%, and Kraft Heinz (KHC) is off by 16%. PepsiCo's (PEP) stock is hovering near a 52-week low after a 15% decline this year. Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10 hours ago
- Business
- Yahoo
McCormick & Co Inc (MKC) Q2 2025 Earnings Call Highlights: Navigating Growth Amidst Global ...
Total Organic Sales Growth: Increased by 2% for the quarter, driven by volume and mix. Consumer Segment Organic Sales: Increased by 3%, with 4% volume growth in the Americas. Flavor Solutions Segment Organic Sales: Flat, with a 1% contribution from price offset by a 1% decline in volume and mix. Gross Profit Margin: Flat compared to the previous year, impacted by higher commodity costs. Adjusted Operating Income: Increased by 10%, or 11% excluding currency impacts. Adjusted Earnings Per Share: $0.69, comparable to the previous year. Cash Flow from Operations: $161 million, down from $302 million in the previous year. Capital Expenditures: $85 million used for capital expenditures. Tariff Exposure: Total gross annualized tariff exposure approximately $90 million, with $50 million in-year exposure for 2025. 2025 Financial Outlook: Net sales growth expected between 1% and 3%, with adjusted EPS projected at $3.03 to $3.08. Warning! GuruFocus has detected 5 Warning Signs with MKC. Release Date: June 26, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. McCormick & Co Inc (NYSE:MKC) reported a 2% increase in total organic sales for the second quarter, driven by volume growth, particularly in the Consumer segment. The company achieved volume growth of more than 3% in the Consumer segment, with strong performance in the Americas and EMEA regions. McCormick & Co Inc (NYSE:MKC) continues to see strong demand for its products, driven by consumer trends towards flavorful, fresh, and healthy meals. The company is effectively managing tariff impacts through strategic sourcing and cost-saving initiatives, maintaining its volume-led growth and operating profit outlook for 2025. McCormick & Co Inc (NYSE:MKC) is expanding its distribution and launching new products, such as air fryer seasonings and finishing salts, to drive growth and meet consumer demand. The Flavor Solutions segment experienced a decline in volume, particularly in the EMEA region, due to softness in customer volumes and geopolitical boycotts. The company faces increased cost pressures from the global trade environment, impacting its gross margin expectations for 2025. McCormick & Co Inc (NYSE:MKC) is experiencing softness in volumes from some large CPG customers, affecting its Flavor Solutions segment. The company anticipates continued challenges in the quick service restaurant (QSR) sector in EMEA, impacting its performance in that region. McCormick & Co Inc (NYSE:MKC) reported a decrease in cash flow from operations compared to the previous year, driven by higher cash used due to the timing of working capital. Q: Brendan, McCormick had been indicating that EBIT growth would be more weighted towards the second half, but second-quarter EBIT was stronger than expected. What contributed to this outcome? A: Brendan Foley, CEO: Our consumer business performed well, driven by volume across core categories, and we built share. In Flavor Solutions, we navigated tough conditions better than most. Marcos Gabriel, CFO, added that strong operating profit delivery was driven by SG&A efficiencies, including stock-based compensation and CCI program initiatives. Q: Can you elaborate on the tariff mitigation actions and how you balance cost work with strategic pricing? A: Marcos Gabriel, CFO: The majority of mitigation actions are driven by sourcing and CCI. We use data analytics for buying decisions and sourcing locations. Pricing is the residual, and we apply it surgically, using analytics to assess elasticity and maintain volume momentum. Q: Could you provide more detail on the gross tariff exposure of $90 million and the impact of the global trade environment on costs? A: Marcos Gabriel, CFO: Our tariff exposure is related to raw materials not grown in the US. We use a blended tariff rate to estimate a 2% impact on COGS globally. The global trade environment has not driven expected lower costs, impacting our gross margin, which we plan to offset through SG&A initiatives. Q: How are you managing sourcing opportunities without sacrificing quality? A: Brendan Foley, CEO: Quality remains a top priority, and we procure items that meet our high-quality requirements. Marcos Gabriel, CFO, emphasized that there is no trade-off between quality and price, and our sourcing organization ensures both. Q: What is the outlook for the Flavor Solutions segment in the second half of the year? A: Brendan Foley, CEO: In the Americas, we expect trends to sustain, with potential improvement if QSR traffic increases. In EMEA, we anticipate stabilization against weaker prior-year performance. Asia Pacific trends are expected to remain consistent with the first half. Q: How are discussions with retailers regarding innovation and pricing? A: Brendan Foley, CEO: We have positive, productive conversations with retailers, focusing on category growth and consumer needs. Our strong category management, innovation, and brand marketing support drive collaborative and successful retailer relationships. Q: Are you confident in achieving long-term objectives despite tariff impacts? A: Brendan Foley, CEO: Yes, we remain confident in our long-term objectives. While we adjust plans as needed, tariffs have not derailed our long-term strategy. Q: What is the level of innovation activity from large CPG customers, and how does it benefit McCormick? A: Brendan Foley, CEO: We see increased reformulation and innovation activity, particularly in health and wellness categories. This activity is incremental and benefits McCormick through strong win rates and collaboration with customers. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
a day ago
- Business
- Yahoo
McCormick Heats Up Consumer Sales in Q2
After multiple quarters of solid results, Flavor Solutions revenue declined on weak volume and currency pressures. Consumer sales were up 3%, driven by both volume and product mix. GAAP earnings were down modestly, while operating income was up and adjusted net income was flat. 10 stocks we like better than McCormick › Here's our initial take on McCormick's (NYSE: MKC) fiscal 2025 second-quarter results. Metric Q2 FY24 Q2 FY25 Change vs. Expectations Revenue $1.64 billion $1.66 billion +1.2% Met Earnings per share (Adj) $0.69 $0.69 unch. Beat Operating income $234.1 million $245.8 million 5% n/a Gross margin 37.7% 37.5% -20 bps n/a Spice, flavorings, and seasonings giant McCormick -- and also the company behind Frank's Red Hot and Cholula hot sauces -- continues to navigate a challenging market, and positioning itself to better manage increased tariffs and the potential implications for consumers, with a second quarter that wasn't amazing, but also showed some positive signs. Overall net revenue was up about 1% year over year, but unlike in prior quarters, it wasn't the company's flavor solutions segment that was doing the heavy lifting. That segment was actually weaker, with revenue down 1%. Realized prices were up 1%, but volume was down 1%, and foreign exchange knocked another 1% off the revenue top line. Things were better in the consumer segment, which is larger and more profitable. Revenue was up 3%, driven by 3% growth in organic sales, along with solid volumes and product mix. While net income was down 4% on a GAAP basis and adjusted earnings per share came in flat, the operating results were improved. Adjusted operating income was up 10% on an adjusted basis in both segments, and 5% better on a non-adjusted basis across both segments, on lower sales, general, and administrative (SG&A) expenses. Gross margin fell 20 basis points, but higher revenue resulted in a $3 million increase in gross profit dollars. The decrease in gross margin was the result of higher costs related to future capacity growth, and some higher commodity costs. So far, it looks like investors are happy with McCormick's results, and management's commentary for the rest of the year. Share prices are up 5% in early market trading. The jump in price is likely as much a product of the company's guidance as the results from the quarter, as management reaffirmed its full-year outlook, including steps to "mitigate current tariff impact." The company is calling for revenue to grow 1% to 3% on a constant-currency basis for the full year, with volumes driving the growth, and for operating income and earnings per share to increase 3% at the midpoint. So far, 2025 has been an uncertain year for McCormick, as with so many other companies that rely on foreign markets to source the goods that they manufacture (as well as end-markets where they sell). For McCormick, investors should continue to look for improvements in its expense and cost structure, resilience in the Flavor Solutions segment, and growing volumes in both its Flavor Solutions and Consumer segments as signs of a healthy business moving in the right direction. Earnings release and presentation Investor relations page Before you buy stock in McCormick, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and McCormick wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,731!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $945,846!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Jason Hall has no position in any of the stocks mentioned. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy. McCormick Heats Up Consumer Sales in Q2 was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
McCormick (MKC) Reports Q2 Earnings: What Key Metrics Have to Say
For the quarter ended May 2025, McCormick (MKC) reported revenue of $1.66 billion, up 1% over the same period last year. EPS came in at $0.69, compared to $0.69 in the year-ago quarter. The reported revenue represents a surprise of -0.22% over the Zacks Consensus Estimate of $1.66 billion. With the consensus EPS estimate being $0.65, the EPS surprise was +6.15%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how McCormick performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net Sales- Flavor Solutions: $729 million versus $746.82 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -1.3% change. Net Sales- Consumer: $931 million versus the two-analyst average estimate of $918.28 million. The reported number represents a year-over-year change of +2.9%. Operating income excluding special charges and transaction and integration expenses- Flavor Solutions: $95 million versus $92.07 million estimated by two analysts on average. Operating income excluding special charges and transaction and integration expenses- Consumer: $164 million compared to the $152.43 million average estimate based on two analysts. View all Key Company Metrics for McCormick here>>>Shares of McCormick have returned +3.2% over the past month versus the Zacks S&P 500 composite's +5.1% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
