Condiments maker McCormick tops profit estimates on higher pricing

June 25 (Reuters) - Cholula hot sauce ‌maker McCormick handily ​beat ​Wall Street estimates for second-quarter profit on Thursday, as higher prices for its spices and condiments helped offset rising commodity costs.

McCormick also ‌joined peers, including Campbell's, in reaffirming its annual forecast, while warning ⁠the outlook reflects an uncertain demand environment and the Middle East conflict.

The results are the first ‌since McCormick announced its planned ‌merger with Unilever's food business in a roughly $45 billion deal that would significantly expand its presence beyond spices and condiments.

Shares of the Hunt Valley, Maryland-based ​company were up about 3% in early trading. The stock was down about 30% this year through its last close.

Barclays analysts said the profit beat ⁠and reiterated forecast "should be good enough", especially as investors were concerned about a potential cut in the outlook ​amid a "somewhat softer consumer environment in the Americas".

The company, which posted quarterly adjusted gross profit growth of nearly 25% to $778.2 million, ​said tariff refunds reduced cost of goods sold ‌by $28 million.

McCormick had been facing pressure from import tariffs on raw materials, including pepper and various spices and herbs sourced outside ⁠the U.S.

The company expects another $3 million in refunds this year, and said the gains would help offset increased costs, including those tied to the Middle East conflict.

The Stubb's barbecue ⁠sauce maker reported an adjusted profit of 80 cents per share for the quarter, beating analysts' ​average estimate of 69 cents per share, according to data compiled by LSEG.

Its quarterly revenue rose 16.7% to $1.94 billion, helped by factors including higher pricing, increased eat-at-home trends, and gains ‌from its Mexico joint venture. Analysts, on average, expected McCormick to record $1.91 billion.

Overall volumes fell 0.5%, while prices rose 2.2% ‌in the quarter. The company expects organic growth in the second half of the ⁠year to be supported by improving ‌volumes.

McCormick reaffirmed its annual ​sales growth target of 13% to 17% and adjusted profit per share of $3.05 to $3.13.

(Reporting by Neil J Kanatt in Bengaluru; Editing by ‌Leroy Leo)

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