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Mccormick & Company Inc. (MKC)
NYSE:MKC
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McCormick & Company
(NYSE:MKC)75Outperform
Positive Factors
Market Position
MKC reported a strong finish to FY24 with best-in-class volume growth among food peers.
Product Innovation
New product introductions, price-gap management, packaging upgrades, and advertising investments helped boost the Consumer division's volume growth 3.7% in 4Q25, including positive vol share in the U.S. for the first time in years.
Negative Factors
Geopolitical Risks
Tariffs on Mexico would present a cost headwind to the company's hot sauce business given that the U.S. imports 90% of its chili peppers with most coming from Mexico.
McCormick & Company (MKC) vs. S&P 500 (SPY)
Market Cap
$22.15B
Dividend Yield2.02%
Average Volume (3M)2.06M
Price to Earnings (P/E)28.2
Beta (1Y)0.22
Revenue Growth0.92%
EPS Growth15.79%
CountryUS
Employees14,100
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)2.92
Shares Outstanding252,517,970
10 Day Avg. Volume2,205,208
30 Day Avg. Volume2,064,147
Financial Highlights & Ratios
PEG Ratio1.79
Price to Book (P/B)N/A
Price to Sales (P/S)3.29
Price to Cash Flow (P/CF)12.10
P/FCF Ratio11.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$85.44Price Target Upside3.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
McCormick & Company Business Overview & Revenue Model
Company DescriptionMcCormick & Company, Incorporated is a global leader in flavor, specializing in the manufacture, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products. Founded in 1889 and headquartered in Hunt Valley, Maryland, McCormick serves both the consumer and industrial markets. Its portfolio includes a diverse range of products sold under various brands, such as McCormick, Lawry's, Old Bay, and Zatarain's, catering to a wide array of culinary preferences and dietary needs.
How the Company Makes MoneyMcCormick & Company generates revenue through the sale of its products across two primary segments: consumer and flavor solutions. The consumer segment targets retail customers, offering a wide variety of branded spices, herbs, and flavorings available through grocery stores, mass merchandisers, warehouse clubs, and e-commerce platforms. The flavor solutions segment serves food manufacturers and the foodservice industry, providing custom flavor systems, branded food products, and integrated solutions to enhance culinary offerings. Key revenue streams include direct sales to consumers, partnerships with major food companies, and contracts with restaurants and foodservice providers. McCormick's strategic acquisitions and global presence further bolster its revenue, allowing the company to capture diverse market opportunities and adapt to changing consumer preferences.
McCormick & Company Financial Statement Overview
Summary
McCormick & Company exhibits a solid financial foundation with consistent revenue and profit growth, stable margins, and effective cash flow management. While the company maintains a healthy balance sheet, attention to debt management is advisable to mitigate potential risks.Income Statement
McCormick & Company demonstrates a strong financial performance with consistent revenue growth over the years. The gross profit margin remains robust, indicating effective cost management, and the net profit margin has been steadily improving, reflecting enhanced profitability. EBIT and EBITDA margins are stable, showcasing operational efficiency. Overall, the company exhibits a healthy trajectory with solid profitability metrics.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio. The equity ratio signifies a sound proportion of equity financing, providing financial stability. Return on equity has shown improvement, indicating efficient use of shareholder funds. However, total debt levels are relatively high compared to equity, which could pose a risk if not managed carefully.78
Positive
Cash Flow
McCormick & Company maintains strong cash flow generation, with operating cash flow consistently covering net income, indicating effective cash management. The free cash flow growth rate is positive, supporting future investment and dividend potential. The company has demonstrated the ability to generate sufficient cash to support its operations, though fluctuations in free cash flow ratios warrant monitoring.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.72B | 6.66B | 6.35B | 6.32B | 5.60B | Gross Profit |
| 2.59B | 2.50B | 2.27B | 2.49B | 2.30B | EBIT |
| 1.06B | 963.00M | 863.60M | 1.02B | 999.50M | EBITDA |
| 1.32B | 1.21B | 1.19B | 1.23B | 1.19B | Net Income Common Stockholders |
| 788.50M | 680.60M | 682.00M | 755.30M | 747.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 186.10M | 166.60M | 334.00M | 351.70M | 423.60M | Total Assets |
| 13.07B | 12.86B | 13.12B | 12.91B | 12.09B | Total Debt |
| 4.34B | 4.59B | 5.33B | 5.39B | 4.90B | Net Debt |
| 4.16B | 4.42B | 4.99B | 5.04B | 4.48B | Total Liabilities |
| 7.75B | 7.78B | 8.43B | 8.48B | 8.15B | Stockholders Equity |
| 5.29B | 5.06B | 4.68B | 4.41B | 3.93B |
| Cash Flow | Free Cash Flow | |||
| 921.90M | 973.40M | 389.50M | 550.30M | 816.00M | Operating Cash Flow |
| 921.90M | 1.24B | 651.50M | 828.30M | 1.04B | Investing Cash Flow |
| -269.00M | -260.50M | -146.40M | -908.60M | -1.03B | Financing Cash Flow |
| -583.10M | -1.18B | -487.20M | 22.00M | 220.90M |
McCormick & Company Technical Analysis
Positive
82.36
Price Trends
76.92
Positive
77.44
Positive
76.11
Positive
Market Momentum
1.76
Negative
69.18
Neutral
88.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKC, the sentiment is Positive. The current price of 82.36 is above the 20-day moving average (MA) of 78.98, above the 50-day MA of 76.92, and above the 200-day MA of 76.11, indicating a bullish trend. The MACD of 1.76 indicates Negative momentum. The RSI at 69.18 is Neutral, neither overbought nor oversold. The STOCH value of 88.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MKC.
McCormick & Company Risk Analysis
McCormick & Company disclosed 32 risk factors in its most recent earnings report. McCormick & Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
McCormick & Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $6.41B | 19.24 | 10.08% | ― | 7.32% | 34.44% | |
75 Outperform | $22.15B | 28.25 | 14.90% | 2.02% | 0.92% | 15.79% | |
71 Outperform | $596.08M | 15.79 | 6.26% | ― | 4.01% | 22.46% | |
70 Outperform | $12.02B | 21.96 | 14.94% | 3.63% | 6.34% | -30.58% | |
64 Neutral | $15.87B | 20.98 | 6.59% | 3.86% | -1.84% | -5.14% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
44 Neutral | $323.08M | ― | -21.72% | ― | -6.68% | -9.71% |
* Consumer Defensive Sector Average
Performance Comparison
MKC
McCormick & Company
82.36
15.57
23.31%
CPB
Campbell Soup
40.33
-1.54
-3.68%
HRL
Hormel Foods
28.90
-4.08
-12.37%
POST
Post Holdings
112.67
8.67
8.34%
SENEA
Seneca Foods
86.64
36.43
72.56%
HAIN
Hain Celestial
3.79
-5.58
-59.55%
McCormick & Company Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: 12.45% | Next Earnings Date: Mar 25, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong volume growth in the consumer segment, gross margin expansion, and positive performance in Flavor Solutions. However, challenges in the China market, softness in CPG and QSR volumes, and geopolitical factors in EMEA present concerns. While the company achieved strong earnings growth, there are significant challenges ahead, particularly in specific regions and segments.Highlights
Strong Volume Growth in Consumer Segment
Global consumer segment demonstrated strong volume growth, with a 4% increase in the fourth quarter and 5% volume growth in the Americas consumer segment year-over-year.
Expansion in EMEA Markets
EMEA markets showed positive volume growth with a 5% volume increase in the consumer segment and sustained growth momentum in 2024.
Gross Margin Expansion
Gross profit margin expanded by 20 basis points in Q4 and by 90 basis points for the year, driven by cost-saving initiatives from the CCI program.
Strong Performance in Flavor Solutions
Flavor Solutions segment saw a 5% increase in adjusted operating income, with a 14% growth in operating income for the fiscal year.
Adjusted Earnings Per Share Growth
For the year, adjusted earnings per share increased by 9% to $2.95, exceeding the high end of the guidance range.
Lowlights
Challenges in China Market
The Asia Pacific region saw a 10% decline in consumer organic sales, driven by an 11% decrease in volume due to the challenging macro environment in China.
Softness in CPG and QSR Volumes
Flavor Solutions segment experienced softness in volumes with CPG and QSR customers in both the Americas and EMEA regions.
Impact of Geopolitical Factors
EMEA Flavor Solutions customers were impacted by geopolitical boycotts related to the Middle East conflict, potentially affecting 2025 results.
Weakness in QSR Traffic
QSR traffic remained soft in both EMEA and the Americas, impacting Flavor Solutions results.
Company Guidance
During the McCormick Q4 2024 earnings call, the company provided guidance reflecting a focus on organic growth driven largely by volume, with organic sales projected to grow between 1% and 3% in 2025. This growth is anticipated to be primarily volume-led, with minimal contribution from pricing. The company expects gross margin expansion of 50 to 100 basis points, supported by favorable product mix and cost savings from their continuous improvement program, despite a low single-digit increase in cost inflation. McCormick's brand marketing spend is projected to increase in the high single digits, aligning with their strategic investments to drive long-term profitable growth. The adjusted operating income is expected to grow 4% to 6% in constant currency, while adjusted earnings per share is projected to grow between 5% and 7% on a constant currency basis, considering a currency headwind and an increased tax rate. The company also noted potential challenges, including the macroeconomic environment in China and softness in certain customer volumes, which could influence the lower end of their guidance range.McCormick & Company Corporate Events
Executive/Board ChangesShareholder Meetings
Patricia Little to Retire from McCormick’s Board
Neutral
Jan 29, 2025
On January 27, 2025, Patricia Little informed McCormick & Company’s Board of Directors of her intention to retire and not stand for re-election at the next annual stockholders’ meeting scheduled for March 26, 2025. Her departure marks a transition within the company’s governance structure, potentially impacting its strategic direction and stakeholder interests as they prepare for the upcoming meeting.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.