McCormick (MKC) will report second-quarter earnings tomorrow

Food flavor company McCormick (NYSE:MKC) will report earnings tomorrow morning. Here’s what investors need to know.

McCormick beat analysts’ revenue expectations by 3.3% last quarter, reporting revenue of $1.60 billion, up 2.4% year-over-year. It was a very strong quarter for the company, with an impressive increase in analyst estimates for organic revenue growth and a decent increase in analyst earnings estimates.

Will the McCormick buy or sell impact earnings? Read our full analysis here, it’s free.

Analysts expect McCormick’s revenue to decline 1.7% year over year for the quarter to $1.63 billion, a reversal from the 8% increase reported in the same quarter last year. Adjusted earnings per share are expected to be $0.59.

Analysts covering the company have broadly reaffirmed their estimates over the last 30 days, suggesting they expect the company to continue its course towards earnings. McCormick has missed Wall Street revenue estimates five times over the past two years.

Looking at McCormick’s competitors in the consumer staples segment, only General Mills has announced results so far. The company beat analyst revenue estimates by 3%, with year-over-year sales declining 6.3%.

Read our full analysis of General Mills’ earnings here.

Valuation multiples for many growth stocks have not yet returned to the highs seen in early 2021, but the market became more optimistic in late 2023 thanks to cooling inflation. The start of 2024 is a different story as mixed signals have led to market volatility and while some consumer staples stocks have performed slightly better, they have not been spared, with share prices down an average of 3% over the past month. Meanwhile, McCormick is down 5.1% and heading toward earnings, with an average analyst price target of $74.6 (versus the current share price of $67.68).

Today’s young investors probably haven’t read the timeless lessons of Gorilla Game: Picking Winners In High Technology because it was written over 20 years ago, when Microsoft and Apple were first asserting their dominance. However, if we apply the same principles, enterprise software that leverages its own generative AI capabilities may prove to be the gorillas of the future. In that spirit, we’re excited to present our free special report on profitable, fast-growing enterprise software that’s already riding the automation wave and looking to leverage generative AI next.