McCormick’s (MKC) Upcoming Second Quarter Earnings: Factors to Watch Out for

McCormick & Company, incorporated MKC will likely see a decline in revenue and earnings when it reports second-quarter fiscal 2024 earnings on June 27. The Zacks Consensus Estimate for revenue is estimated at $1.6 billion, suggesting a decline of nearly 2% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has fallen by a penny over the past seven days to 59 cents per share, representing a decline of 1.7% from the figure reported in the year-ago quarter.

The global leader in flavors reports an earnings surprise of 5.4% on average for the trailing four quarters. In the last quarter, MKC surprised with results of 8.6%.

Factors worth paying attention to

MKC is bucking low volume trends as consumer demand remains challenging. It is worth noting that consumers are exhibiting value-seeking behavior as they continue to feel the pinch of food price inflation. Moreover, the company’s decision to exit its low-margin business and sell its canning business will likely put pressure on sales volumes in the fiscal second quarter.

The company is struggling with cost inflation, which puts pressure on its margins. The company also records increasing sales and general administrative costs. Therefore, the increased costs of brand marketing are unfavorable. Moreover, the company’s international presence exposes it to the risk of unfavorable exchange rates.

That being said, McCormick’s successful pricing strategy and savings efforts keep it well positioned for growth.

What the Zacks Model Reveals

Our proven model doesn’t predict McCormick’s earnings growth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. With our Earnings ESP filter, you can discover the best stocks to buy or sell before they are reported.

McCormick is sporting a Zacks Rank #4 (Sell) and an Earnings ESP of -2.25%.

Some stocks with a favorable combination

Here are some stocks worth considering as our model shows they too have the right combination of elements to beat earnings this reporting cycle.

Kimberly-Clark Corporation KMB currently has an Earnings ESP of +2.25% and a Zacks Rank #3. The company will likely see a decline in revenue when it releases its second-quarter 2024 data. The consensus revenue estimate was pegged at $5.08 billion, down 1.1% from the amount reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Consensus Estimates suggest Kimberly-Clark’s quarterly earnings per share of $1.67 suggests growth of 1.2% from the year-ago quarter. KMB surprises with results for the last four quarters, averaging 11.3%.

Clorox CLX currently has an Earnings ESP of +2.14% and a Zacks Rank of 3. The company is likely to see a decline in revenues and earnings when it reports its fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for Clorox’s quarterly revenue is $1.98 billion, down 1.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Clorox’s quarterly earnings of $1.53 suggests a decline of 8.4% from the prior-year quarter level. However, Clorox has delivered earnings surprises over the last four quarters, averaging 128.5%.

Domino’s Pizza limited liability company DPZ currently has an Earnings ESP of +2.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for fiscal 2024 second quarter earnings per share is $3.66, suggesting year-over-year growth of 18.8%.

The Zacks Consensus Estimate estimates Domino’s Pizza’s quarterly revenues at $1.1 billion, up 7.8% from the prior-year quarter’s figure. DPZ surprises with results for the last four quarters, averaging 9.3%.

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