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McCormick (MKC) to Report Q2 Earnings: What's in the Cards?
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McCormick & Company, Incorporated (MKC - Free Report) is likely to register a decline in the bottom line when it releases second-quarter fiscal 2021 numbers on Jul 1. The Zacks Consensus Estimate for earnings has remained unchanged in the past 30 days at 64 cents per share, suggesting a decline of 13.5% from the year-ago quarter’s reported figure. Notably, the manufacturer, distributor and marketer of spices, seasoning mixes, condiments and other flavorful products has a trailing four-quarter earnings surprise of 12.8%, on average. Further, the company delivered an earnings surprise of 26.3% in the last reported quarter.
McCormick’s top line is likely to register year-over-year growth in fiscal second-quarter. The Zacks Consensus Estimate for revenues is pegged at $1.5 billion, which indicates an increase of 8.2% from the prior-year quarter’s reported level.
McCormick & Company, Incorporated Price and EPS Surprise
McCormick is benefiting from high demand stemming from the coronavirus-led higher at-home consumption. A sustained shift in consumer behavior toward increased cook and eat at-home amid the coronavirus outbreak fueled demand in the Consumer segment in the last reported quarter. Moreover, increased sales to packaged food companies drove growth in the Flavor Solutions segment. Additionally, McCormick has been focused on strategically increasing its presence through acquisitions to grow its portfolio. To this end, the company is benefiting from positive impact of the Cholula (concluded in November 2020) and FONA (concluded in December 2020) buyouts.
Along with these, McCormick is on track with product innovations to remain competitive and tap on demand for new flavors, spices and herbs. Aided by a sturdy brand image, it enjoys strong retail acceptance for its new products. Management, in its last earnings call, highlighted that the company’s exceptional product launches in 2020 are providing solid momentum into this year. Moreover, the company is optimistic about its strong product pipeline for 2021. Also, McCormick’s focus on cost savings and productivity enhancement through its Comprehensive Continuous Improvement program is noteworthy. Certainly, such robust trends are likely to get reflected in second-quarter fiscal 2021 performance.
However, McCormick has been seeing high costs related to coronavirus. In the last reported quarter, pandemic-induced expenses put pressure on gross profit margin as well as adjusted operating margin to some extent. In fact, management expects to incur pandemic-related costs of nearly $60 million during fiscal 2021 majorly due to third-party manufacturing expenses. We believe that, such high costs are likely to have had an adverse impact on the company’s performance in the quarter under review.
What the Zacks Model Unveils
Our proven model doesn’t predict an earnings beat for McCormick this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
McCormick carries a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +29.49% and a Zacks Rank of 3.
Hormel Foods Corporation (HRL - Free Report) currently has an Earnings ESP of +3.63% and a Zacks Rank of 3.
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McCormick (MKC) to Report Q2 Earnings: What's in the Cards?
McCormick & Company, Incorporated (MKC - Free Report) is likely to register a decline in the bottom line when it releases second-quarter fiscal 2021 numbers on Jul 1. The Zacks Consensus Estimate for earnings has remained unchanged in the past 30 days at 64 cents per share, suggesting a decline of 13.5% from the year-ago quarter’s reported figure. Notably, the manufacturer, distributor and marketer of spices, seasoning mixes, condiments and other flavorful products has a trailing four-quarter earnings surprise of 12.8%, on average. Further, the company delivered an earnings surprise of 26.3% in the last reported quarter.
McCormick’s top line is likely to register year-over-year growth in fiscal second-quarter. The Zacks Consensus Estimate for revenues is pegged at $1.5 billion, which indicates an increase of 8.2% from the prior-year quarter’s reported level.
McCormick & Company, Incorporated Price and EPS Surprise
McCormick & Company, Incorporated price-eps-surprise | McCormick & Company, Incorporated Quote
Things to Note
McCormick is benefiting from high demand stemming from the coronavirus-led higher at-home consumption. A sustained shift in consumer behavior toward increased cook and eat at-home amid the coronavirus outbreak fueled demand in the Consumer segment in the last reported quarter. Moreover, increased sales to packaged food companies drove growth in the Flavor Solutions segment. Additionally, McCormick has been focused on strategically increasing its presence through acquisitions to grow its portfolio. To this end, the company is benefiting from positive impact of the Cholula (concluded in November 2020) and FONA (concluded in December 2020) buyouts.
Along with these, McCormick is on track with product innovations to remain competitive and tap on demand for new flavors, spices and herbs. Aided by a sturdy brand image, it enjoys strong retail acceptance for its new products. Management, in its last earnings call, highlighted that the company’s exceptional product launches in 2020 are providing solid momentum into this year. Moreover, the company is optimistic about its strong product pipeline for 2021. Also, McCormick’s focus on cost savings and productivity enhancement through its Comprehensive Continuous Improvement program is noteworthy. Certainly, such robust trends are likely to get reflected in second-quarter fiscal 2021 performance.
However, McCormick has been seeing high costs related to coronavirus. In the last reported quarter, pandemic-induced expenses put pressure on gross profit margin as well as adjusted operating margin to some extent. In fact, management expects to incur pandemic-related costs of nearly $60 million during fiscal 2021 majorly due to third-party manufacturing expenses. We believe that, such high costs are likely to have had an adverse impact on the company’s performance in the quarter under review.
What the Zacks Model Unveils
Our proven model doesn’t predict an earnings beat for McCormick this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
McCormick carries a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
Medifast (MED - Free Report) currently has an Earnings ESP of +6.85% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +29.49% and a Zacks Rank of 3.
Hormel Foods Corporation (HRL - Free Report) currently has an Earnings ESP of +3.63% and a Zacks Rank of 3.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>