Shares of McCormick & Co Inc (NYSE: MKC) are trading higher after the company reported first-quarter FY24 sales growth of 3% year-on-year to $1.60 billion, beating the analyst consensus estimate of $1.56 billion.
Flavor Solutions segment sales increased by 4%, reflecting a 2% increase from pricing actions and a 1% increase from volume.
Consumer segment sales increased 1%, with minimal currency impact, reflecting a 3% increase from pricing actions partially offset by lower volume of 2%.
Gross profit was $599.3 million, with the margin expanding 140 basis points Y/Y to 37.4%.
Adjusted operating margin expanded 30 basis points to 14.8%. Adjusted EPS of $0.63 beat the consensus of $0.58.
McCormick held $178 million in cash and equivalents as of February 29, 2024. The company generated an operating cash flow of $138 million in the quarter.
"As we look ahead, we are pleased with the momentum we are seeing in the business and continue to expect improved volume performance, which will build throughout the year," said President and CEO Brendan M. Foley.
Outlook Reaffirmed: McCormick reaffirmed FY24 revenue growth of (2)% - 0%. Operating income is expected to grow 8% - 10%. It expects FY24 Adjusted EPS of $2.80 - $2.85 (consensus $2.83).
For fiscal 2024, the company expects strong cash flow driven by profit and working capital initiatives and anticipates returning a significant portion of cash flow to shareholders via dividends.
Price Action: MKC shares are trading higher by 6.66% at $74.60 in premarket on the last check Tuesday.