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Investing.com -- McCormick & Company saw its shares rise 1% premarket on Monday after the global flavor leader reported third-quarter results that exceeded analyst expectations, marking its fifth consecutive quarter of volume-led growth despite mounting cost pressures.
The company posted adjusted earnings per share of $0.85 for the quarter ended August 31, beating the analyst estimate of $0.82. Revenue came in at $1.72 billion, slightly above the consensus estimate of $1.71 billion and up 2.7% from the same period last year. Organic sales growth of 2% was primarily driven by volume increases.
The company’s Consumer segment led growth with sales rising 3.8%, while Flavor Solutions segment sales increased 1.2%. Despite facing headwinds from rising commodity costs and tariffs, McCormick managed to increase adjusted operating income by 1.8% to $294 million compared to $288 million in the year-ago period.
"Our third quarter results marked our fifth consecutive quarter of volume-led growth, reflecting our differentiation and the benefit of continued investments in our brands, expanded distribution, and innovation," said Brendan M. Foley, Chairman, President, and CEO. "As a result of the dynamic global trade environment, our gross margin was further pressured by rising costs; however, we continued to drive operating profit growth through the effective execution of our cost savings initiatives."
For fiscal year 2025, McCormick reaffirmed its sales growth outlook of 0% to 2% but updated its adjusted earnings per share guidance to $3.00-$3.05, compared to the analyst consensus of $3.04. The updated outlook reflects challenges from rising commodity costs and incremental tariffs implemented since August.