McCormick beats quarterly results estimates on higher product prices

Oct 1 (Reuters) - McCormick topped ‌Wall Street ​estimates for ​third-quarter profit and sales on Thursday, as stronger pricing for seasonings and sauces helped cushion the impact of ‌rising raw materials and freight costs.

Shares of the company, ⁠which have fallen nearly 32% so far this year, were up about 6% ‌in premarket trading.

Packaged goods makers ‌such as McCormick, Conagra Brands and General Mills have leaned on price hikes to shield margins as they counter challenges ​from uncertainty over US tariffs and surging input costs tied to the Middle East conflict.

For the quarter ended August 31, ⁠McCormick's prices were up 2.2% from a year ago, while organic volumes dipped 0.3%. Its ​volumes fell 0.5% in the previous quarter.

Persistent pressure on household spending has dampened consumers' appetite for dining out, ​improving demand for flavor-boosting condiments like ‌McCormick's Cholula and Frank's RedHot sauces — affordable pantry staples that can turn home-cooked meals into something special.

Flavor-focused ⁠brands like McCormick are also gaining popularity as GLP-1 weight-loss drugs reshape eating habits, with consumers seeking bolder tastes and smaller-but-more-satisfying meals.

However, the company ⁠maintained its annual forecasts for the third time this fiscal year as it ​navigates an uncertain consumer spending environment.

McCormick said integration planning for the proposed $65-billion merger with Unilever's foods business was on track and it remains confident that ‌the deal will deliver significant earnings-per-share accretion after closing.

The company reported third-quarter sales of $2.02 billion, compared with ‌analysts' estimates of $1.98 billion, according to data compiled by LSEG.

Its quarterly ⁠adjusted profit came in at ‌86 cents per share, ​beating estimates of 76 cents.

(Reporting by Shania S Thomas and Anuja Bharat Mistry in Bengaluru; Edited by ‌Diti Pujara)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Copart extends ACV tender offer deadline to Oct. 7
• HSBC says investors are shifting funds from France to UK
• Amazon and these four U.S. stocks are latest additions to Goldman’s flagship list