• Wed. Sep 28th, 2022

McCormick shares fall 6% after spice maker calls for lower sales, blaming inflation

ByRandall B. Phelps

Sep 7, 2022

Shares of McCormick & Co. Inc. MKC,
fell 6% in Wednesday’s extended session after the spice maker and marketer said third-quarter sales fell short of expectations. Sales are expected to rise about 3% in the quarter, McCormick said, and adjusted earnings per share are estimated at about 65 cents, up from 80 cents per share a year ago. Analysts polled by FactSet expect McCormick to report adjusted EPS of 83 cents per share when it reports quarterly results in early October. The company expected better consumer trends for its consumer business, with “moderation” hitting the business sooner than expected. “Strong pressure on consumers’ cost of living due to inflation has resulted in higher-than-expected price elasticity, although still below historical levels,” McCormick said. “We are increasing our brand marketing investments in our updated insights and focusing its messaging on value,” the company said. “Home cooking remains higher than pre-pandemic levels, reinforcing our expectation that the shift from consumer demand to home consumption will be sustained,” McCormick said. For the year, the company said it expects sales to range from comparable to 2021 to an increase of 2%. McCormick previously forecast sales growth of 3% to 5% over the year.