McCormick & Co. (MKC) Reports In-Line Q4 EPS

McCormick & Co. (NYSE: MKC) reported Q4 EPS of $1.61, in-line with the analyst estimate of $1.61. Revenue for the quarter came in at $1.48 billion versus the consensus estimate of $1.52 billion.

GUIDANCE:

For fiscal year 2020, McCormick expects to increase sales year-on-year by 2% to 4%. The company expects strong underlying business performance to drive operating income and earnings per share growth, offset by a significant incremental investment associated with business transformation and a higher projected effective tax rate.

Lawrence E. Kurzius, Chairman, President and CEO, stated, "The breadth and reach of our global flavor portfolio continues to meet the demand for flavor around the world and creates a balanced portfolio to drive differentiated growth. In 2019, our performance was in line with our objectives and driven by the successful execution of our strategies and the engagement of our employees around the world.

"We delivered solid performance with growth in sales, adjusted operating income and adjusted earnings per share in 2019. Our sales growth and focus on profit realization drove strong results across both our consumer and flavor solutions segments. We continued to fuel our growth investments through our strong cash flow and CCI program. Led by this program, we achieved $119 million in cost savings in 2019 and expanded our adjusted operating margin by 80 basis points. We have realized $463 million in cost savings since 2016, which exceeded our four-year $400 million goal. Fiscal year 2019 marks the eighth consecutive year of record cash flow from operations, as well as the 34th consecutive year of dividend increases. Along with these accomplishments, we are also making measurable progress towards our 2025 sustainability goals. During 2019, we were recognized for the third consecutive year as a DiversityInc Top 50 Company in 2019, and Corporate Knights recently ranked McCormick in their 2020 Global 100 Most Sustainable Corporations Index as No. 1 in the food products industry for the fourth year in a row.

"The solid financial performance we delivered in 2019 was driven by our branded base business and new product growth in both of our segments, providing us with solid momentum heading into 2020. We are continuing to capitalize on the global and growing consumer interests in healthy, flavorful eating, the source and quality of ingredients, and sustainable practices. We deliver flavor across all markets and through all channels, while responding readily to changes in the fast-evolving food and beverage industry with new ideas, innovation and purpose. Our focus on profitable growth and strengthening our organization is the foundation of our future. In 2020, we expect to deliver another strong year of underlying business performance while making a significant investment in business transformation to fuel our growth and build the McCormick of the future.

"I want to recognize McCormick employees around the world for their dedicated efforts. The collective power of our people drives our momentum and our success. With our vision to bring the joy of flavor to life and our relentless focus on growth, performance, and people, we are confident our strategies will enable us to become even better positioned to drive future growth while we invest for the future and build value for our shareholders in 2020.

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