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EARNINGS UPDATE: McCormick Reports Strong Second Quarter Sales

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EARNINGS UPDATE: McCormick Reports Strong Second Quarter Sales

McCormick & Co. today reported financial results for its fiscal second quarter ended May 31, 2021.

KEY HIGHLIGHTS

  • Sales rose 11% in the second quarter from the year-ago period. In constant currency, the company grew sales 8%.
  • Operating income was $237 million in the second quarter compared to $257 million in the year-ago period. Adjusted operating income was $258 million compared to $260 million in the second quarter of 2020.
  • Earnings per share was $0.68 in the second quarter as compared to $0.73 in the year-ago period. Adjusted earnings per share was $0.69 compared to $0.74 in the year-ago period reflecting a higher adjusted income tax rate versus the second quarter of 2020.
  • For fiscal year 2021, McCormick increased its sales outlook to expected growth of 11% to 13%, or 8% to 10% in constant currency, and also raised its operating profit and earnings per share growth outlook.

Additionally, flavor solutions segment sales increased 39%, driven by higher sales of away-from-home products, incremental sales from acquisitions, as well as growth with packaged food and beverage companies.

Sales from Cholula and FONA, acquired in November 2020 and December 2020, respectively, also added 5% to the sales increase.



CEO REMARKS

CEO Lawrence Kurzius said, “The combination of McCormick’s broad and advantaged portfolio, the acceleration of consumer trends which our strategies capitalize on and our two recent acquisitions, as well as the effective execution of our strategies and engagement of our employees have positioned us well to drive differentiated growth, even when lapping challenging year-over-year comparisons.”

“Last year, our consumer segment demand was driven by a surge of consumers cooking more at home at the onset of the pandemic, while our flavor solutions demand was impacted by the substantial decline in away-from-home consumption,” he added. “Our results reflect cycling these comparisons as well as a sustained shift to consumer at-home consumption higher than pre-pandemic levels and the strong recovery of demand from away-from-home customers.”

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Kurzius noted that the company is continuing to capitalize on accelerating consumer trends—particularly the sustained shift to cooking more at home, increased digital engagement, as well as clean and flavorful eating.

FISCAL YEAR 2021 OUTLOOK

For fiscal 2021, McCormick increased its financial outlook for sales, adjusted operating income and adjusted earnings per share. The company now expects a three-percentage point favorable impact from currency rates on sales and reaffirms the two-percentage point favorable impact from currency on adjusted operating income and adjusted earnings per share.

In 2021, the Company expects to grow sales by 11% to 13% compared to 2020, which in constant currency is 8% to 10% and includes the incremental impact of the Cholula and FONA acquisitions.

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