On Tuesday, McCormick reported an optimistic lift in its full-year earnings outlook, reflecting commendable results for the fiscal third quarter. The renowned spices and seasonings producer now projects adjusted earnings per share to land between $2.85 and $2.90 for fiscal 2024. This upward revision is an improvement from previous estimates, which forecasted earnings in the range of $2.80 to $2.85.
Analysts' consensus on Capital IQ anticipates normalized earnings per share at $2.87. Following this news, McCormick's stock saw a rise of 2.4% in premarket trading. The company disclosed expectations for sales to fluctuate between a 1% decline and a 1% increase compared to 2023, indicating a 'minimal impact' from currency variables.
Previously, McCormick had projected sales to remain flat or decline by 2% for the fiscal year. Market analysts are now looking for total revenue to peak at $6.68 billion. In a statement, Chief Executive Brendan Foley highlighted, "We believe we are well positioned with our cost savings initiatives to fuel investments and generate operating margin expansion.
Our year-to-date results coupled with our growth plans reinforce our confidence in achieving the mid to high-end of our projected sales growth for 2024." As for the period ending in August, McCormick’s adjusted earnings per share surged to $0.83 from $0.65 during the same timeframe last year, exceeding analysts' estimates of $0.67.
Sales figures showed a slight increase, remaining steady at $1.68 billion, which also surpassed the anticipated $1.67 billion. Foley commented, "This quarter we reached a meaningful milestone by delivering total global positive volume growth, reflecting improved trends across both segments, and we expect this momentum to continue into the fourth quarter." Delving into the consumer segment, sales inched up to $937.4 million from $937.1 million in the previous year, buoyed by a 1% volume increase that was slightly countered by a 1% price drop.
Growth in the Americas as well as the Europe, Middle East, and Africa regions helped cushion declines in the Asia Pacific area, which Foley attributed to a "challenging macro environment in China." On the other hand, revenue from flavor solutions dipped by 1% year-over-year to $742.4 million, despite recording "sequential volume improvement" owing to robust growth in branded foodservice, as per Foley's remarks. A noteworthy highlight was the gross profit margin, which rose by 170 basis points year-over-year, reaching 38.7%, partly due to the effective implementation of the company's cost savings initiatives.
Additionally, selling, general, and administrative expenses decreased significantly from $371.7 million a year ago to $361.5 million..