Shares of McCormick & Company gained more than 4% in the pre-market session after the American multinational food company posted strong fiscal 1Q results. The outstanding performance was driven by double-digit growth in sales.
McCormick’s (MKC) 1Q adjusted earnings of $0.72 per share increased 33% on a year-over-year basis and handily outpaced the Street estimates of $0.58 per share. Adjusted revenues jumped 20% to $1.48 billion, topping analysts’ expectations of $1.38 billion, mainly due to growth in both the Consumer and Flavor Solutions segments.
The company’s Consumer segment sales surged 32% year-over-year, driven mainly by increased demand resulting from the stay-at-home environment. Flavor Solutions segment sales grew 3%, fueled by acquisitions and higher demand from packaged food companies.
McCormick CEO Lawrence E. Kurzius said, “We are well positioned for continued success and our 2021 outlook reflects another year of differentiated results while making additional investments for the future.” (See McCormick stock analysis on TipRanks)
For fiscal 2021, the company expects sales to grow by 8% to 10% compared to 2020, up from the prior projection of 7% to 9%. Moreover, its adjusted earnings guidance range of $2.97-$3.02 per share came in ahead of analysts’ expectations of $2.95 and was revised upward from the prior assumption of $2.91 to $2.96 per share.
Following the 1Q results, Jefferies analyst Robert Dickerson reiterated a Hold rating and a price target of $95 (5.4% upside potential).
Overall, the stock has a Hold consensus rating based on 3 Holds versus 1 Sell. The average analyst price target of $87.67 implies 2.7% downside potential from current levels. Shares have increased almost 26% over the past year.