- McCormick & Co Inc (NYSE: NYSE:MKC) reported a second-quarter FY22 sales decline of 1.3% year-on-year to $1.54 billion, missing the consensus of $1.61 billion.
- Flavor solutions segment sales increased 10%, driven by the Americas and EMEA regions.
- Consumer segment sales declined 8%, reflecting lower volume and product mix.
- Gross profit was $523 million, with the margin declining 550 basis points Y/Y to 34%.
- Adjusted operating margin contracted 530 basis points Y/Y to 11.3%.
- Q2 net income of $118.5 million declined 35.4% Y/Y. Adjusted EPS of $0.48 missed the consensus of $0.65.
- The company generated an operating cash flow of $154 million year-to-date and held $325.8 million in cash and equivalents.
- "We are currently navigating a challenging global environment including persistently high-cost inflation and supply chain challenges, significant disruption in China from COVID-related lockdowns, and the conflict in Ukraine," said Chairman and CEO Lawrence E. Kurzius.
- Outlook: McCormick sees FY22 sales growth of 3% - 5% Y/Y. It expects FY22 Adjusted EPS of $3.03 - $3.08 (prior view $3.17 - $3.22), against the consensus of $3.17.
- "We expect our pricing actions and other levers to begin to outpace cost pressures in the second half of this year and to fully offset the cost pressures over time," Kurzius added.
- Dividend: MKC board declared a quarterly dividend of $0.37 per share, payable July 25, 2022, to shareholders of record on July 11, 2022.
- Price Action: MKC shares are trading lower by 3.91% at $83.44 on the last check Wednesday.
Read at Benzinga