Spice Maker McCormick Tops Profit Estimates, Says It Can Mitigate Tariff Costs
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McCormick affirmed its full-year outlook, saying it has plans to offset higher costs from tariffs.Key Takeaways
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McCormick reported higher-than-anticipated earnings as volume/mix increased.
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The spicemaker posted gains in each of its global makets.
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McCormick affirmed its full-year outlook, saying it has plans to offset higher costs from tariffs.
Shares of McCormick (MKC) surged Thursday as the spice maker posted better-than-expected profit on a higher volume and product mix, and said it was in a position to deal with the impact of higher tariffs.
The company behind its eponymous seasonings and Cholula hot sauce reported fiscal second-quarter adjusted earnings per share (EPS) of $0.69 on revenue that increased 1% year-over-year to $1.66 billion. Analysts surveyed by Visible Alpha were looking for $0.66 and $1.66 billion, respectively.
Volume/mix grew 1.3%, led by a 3.6% gain in the Asia-Pacific region and 3.5% rise in the Americas. It was 2.2% higher in Europe, the Middle East, and Africa.
CEO Brendan Foley explained that McCormick is "managing in a dynamic environment." Foley added that the company was "well positioned with our robust plans to mitigate current tariff related costs, fuel growth investments, and expand operating margins."
The company affirmed its full-year guidance on expectations of "a 10% tariff on all U.S. imported goods, an incremental 30% tariff on goods imported from China into the U.S. as well as reciprocal tariffs from other countries." It added that most of its U.S. imports "are currently compliant with the United States-Mexico-Canada Agreement." McCormick sees adjusted EPS of $3.03 to $3.08, with revenue flat to up 2%.
The news sent McCormick shares up 5% and into positive territory for 2025.
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