Important points from McCormick’s Q2 earnings report

McCormick & Co (NYSE: MKC) reported its financial results for the second quarter on Thursday that beat Wall Street estimates and raised its guidance for the full year. Shares of the company tanked just under 1% in premarket trading on Thursday and lost another 1% on market open. The stock, however, recovered the entire intraday loss later on.

Financial performance

McCormick reported $183.7 million of net income for the second quarter that translates to 68 cents per share. In the same quarter last year, its net income stood at a higher $195.9 million, or 73 cents per share.

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On an adjusted basis, the food company earned 69 cents per share. McCormick generated $1.557 billion of sales in Q2 versus the year-ago figure of $1.401 billion. According to FactSet, experts had forecast $1.468 billion of sales and 62 cents of adjusted EPS.

Guidance for the full year

For fiscal 2021, McCormick now forecasts up to $3.05 of adjusted per-share earnings. It had previously estimated $2.97 to $3.02 of adjusted EPS. The Baltimore-based company had beat market estimates in the prior quarter (Q1) as well.

In the second quarter, according to the American multinational, its sales were boosted due to the COVID-19 restrictions that made people prefer cooking at home to dining out. McCormick acquired FONA and Cholula late last year, both of which also contributed to pushing sales up.

CEO Lawrence Kurzius’ comments on CNBC’s “Squawk Box”

Discussing the earnings report on CNBC’s “Squawk on the Street”, CEO Lawrence Kurzius said:

“Thanks to the hybrid work environment where people are working more from home, we are benefitting on both ends. As consumers continue to cook at home, they’re using more of our spices and seasonings. And as restaurants reopen, they’re also using those same ingredients as well.”

McCormick is also well-aligned with the rising trend of healthier cooking popularised by millennials and Gen Z. “Our herbs, spices, and sauces are meant to add flavour but not a lot of calories,” said CEO Kurzius.