McCormick & Company Pre-Announces Q3 Results & Cuts Guidance
McCormick & Company, Incorporated (NYSE:MKC) pre-announced softer Q3/22 results and cut its full 2022-year guidance.
Revenue is expected to grow approximately 3% year-over-year in Q3. In constant currency, the increase is expected to be around 6% driven by growth in both the Consumer and Flavor Solutions segments.
Given growing signs of changing consumer behaviors and deteriorating demand across several categories in response to high prices, analysts at Deutsche Bank expect fundamental skepticism/caution across CPG will likely continue to build over the coming months.
| Symbol | Price | %chg |
|---|---|---|
| ICBP.JK | 10375 | 1.2 |
| PANI.JK | 4940 | -0.81 |
| MYOR.JK | 2360 | 0.42 |
| INDF.JK | 5900 | -0.85 |
What to Expect From McCormick & Company’s Upcoming Q2 Earnings?
Analyst at Deutsche Bank provided their views on McCormick & Company (NYSE:MKC) ahead of the company’s upcoming Q2/22 earnings, which are expected to be reported on June 29.
While the company has demonstrated solid execution and momentum throughout the pandemic, the analysts believe the top-and bottom-line delivery will be incrementally tougher moving forward as consumers shift towards value brands and cost headwinds linger throughout 2022 and into 2023.
Furthermore, with inflation pressures continuing to escalate in recent months (alongside volatility in China and more adverse FX headwinds), the company is likely to see its 2022 profit skew further towards the second half of its fiscal year than previously planned. That said, the analysts’ base case remains that the company will still largely reiterate its full-year outlook (if now likely skewed to the low end of its $3.17-$3.22 EPS range).
The analysts reduced their price target to $91 from $99, while keeping their hold rating unchanged.
McCormick & Co Q3 Preview by Deutsche Bank
Analysts at Deutsche Bank provided a report on McCormick & Co (NYSE:MKC) ahead of its Q3 earnings report on Sept 30.
According to the analysts, their biggest concern facing the company will likely be further downside to gross margins as it grapples with supply constraints and higher inflation across several commodities, packaging materials, labor, and transportation costs.
The brokerage said its full 2021-year revenue estimates reflect relatively strong Q3 consumption, continued retailer replenishment, a slight deceleration in foodservice recovery, and acquisition benefits from Cholula and FONA, with constant currency growth at +6.6% year-over-year and overall sales up 13.0% year-over-year.
The brokerage expects full 2021-year EPS of $3.03 (vs. prior $3.04), which is just slightly above the midpoint of the company's $3.00-$3.05 guidance.
The analysts lowered their price target on the company’s shares to $91 from $95, maintaining their hold rating.
