Multinational food company McCormick & Company’s (MKC) third-quarter fiscal 2021 results surpassed the Street’s expectations on the back of shifting consumer preferences to cooking at home.
Adjusted earnings of $0.80 per share increased 5% year-over-year, outpacing the Street’s estimates of $0.73 per share. Revenues jumped 8% to $1.55 billion, topping analysts’ expectations of $1.53 billion. (See McCormick stock chart on TipRanks)
Consumer segment sales surged 1% year-over-year on the back of increased demand resulting from the stay-at-home environment. Flavor Solutions segment sales grew 21%, fueled by acquisitions and higher demand from packaged food companies.
The Chairman, President and CEO of McCormick, Lawrence E. Kurzius, said, “We are confident in our robust sales growth momentum and our ability to successfully navigate through the transitory broad-based supply chain challenges the world is currently experiencing. We have a strong foundation and remain focused on the long-term goals, strategies and values that have made us so successful.”
For Fiscal 2021, the company expects sales to grow by 12% to 13%, compared to 2020, up from the prior projection of 11% to 13%. However, its adjusted earnings guidance range of $2.97 to $3.02 per share was revised downward from the prior assumption of $3 to $3.05 per share.
On September 17, Deutsche Bank analyst Steve Powers maintained a Hold rating on McCormick and lowered the price target to $91 from $95. The new price target implies 8.7% upside potential from current level.
The stock has a Hold consensus rating based on 1 Buy and 3 Holds. The average McCormick price target of $93.75 implies 12% upside potential from current levels. Shares of the company have lost 11% so far this year.
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