Earnings Preview: McCormick & Company

| About: McCormick & (MKC)

McCormick & Company, Incorporated (NYSE:MKC) engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. It operates in two segments, Consumer and Industrial. The Consumer segment offers spices, herbs, extracts, seasoning blends, sauces, marinades, and specialty foods to the consumer food market through retail outlets, including grocery, mass merchandise, warehouse clubs, and discount and drug stores.

It is scheduled to report its Q2 2012 results on June 27, 2012, before the market opens.

Technical Overview

Key Metrics

  • Market Cap: 7.76B
  • 52-week trading range: 43.36 - 58.44
  • Trailing P/E: 21.06
  • Forward P/E: 17.42
  • Price/Sales: 2.02
  • Price/Book: 4.62
  • PEG Ratio: 2.16
  • Total Debt: 1.31B
  • Annual dividend yield: 2.00%
  • Return on Equity: 22.75%
  • Return on Assets: 9.15%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.55 EPS, beating analyst estimates of $0.53.

The consensus EPS is $0.60 based on 12 analysts' estimates, up from $0.55 a year ago. Revenue estimates are $969.79M, up from $883.70M a year ago. The median target price by analysts for the stock is $59.50.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On March 28, 2012, Longbow reiterated Buy rating for the company.

Latest Developments

  • On April 17, 2012, McCormick & Company, Inc. announced that on long term, the Company expects to achieve annual growth of 4%-6% in sales, 7%-9% operating income and 9%-11% earnings per share.
  • On March 28, 2012, McCormick & Company, Inc. announced that its Board of Directors declared a quarterly dividend of $0.31 per share on its common stocks payable April 23, 2012, to shareholders of record on April 9, 2012.
  • On March 27, 2012, McCormick & Company, Inc. reaffirmed guidance for fiscal 2012 and expects sales are projected to grow 9% to 11% in local currency. Based on current rates, the Company estimates a 2% reduction in sales from the impact of foreign currency exchange rates.
  • On January 26, 2012, McCormick & Company, Inc. announced that for fiscal 2012, it expects sales to grow 9%-11% in local currency. Earnings per share (NYSEARCA:EPS) are expected to be in the range of $3.01-$3.06.


McCormick & Co. Inc. operates in Processed & Packaged Goods industry. The company could be compared to ConAgra Foods, Inc. (NYSE:CAG), Campbell Soup Co. (NYSE:CPB), Flowers Foods, Inc. (NYSE:FLO), and The J. M. Smucker Company (NYSE:SJM). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

MKC Chart

MKC data by YCharts

Competitors' Latest Development

  • On June 11, 2012, Campbell Soup Company announced it has purchased 1300 Admiral Wilson Boulevard in Camden, from Camden Gateway Properties, I, LLC. The 4-acre property includes the vacant Sears building.
  • On June 7, 2012, The J.M. Smucker Company announced that for fiscal 2013, it expects net sales to increase approximately 7%, compared to 2012, including an incremental eight-month contribution from the Sara Lee foodservice business, non-GAAP income per diluted share to range from $5.00 to $5.10, excluding special project costs of approximately $0.50 per diluted share.
  • On June 1, 2012, Flowers Foods, Inc. announced that the Board of Directors announced a quarterly dividend of $.16 per share, or $.64 per share on an annualized basis. This represents an increase of 6.7% over the dividend paid previously.
  • On May 31, 2012, Flowers Foods, Inc. announced that it has entered into a definitive agreement to acquire Lepage Bakeries, Inc., of Auburn, Maine for $370 million in cash and stock.
  • On May 24, 2012, Flowers Foods, Inc. announced that for fiscal 2012, it expects sales growth breakdown of 7% to 9% and earnings per share to increase roughly 3.5% to 8% over the fiscal 2011 adjusted earnings per share of $0.96.
  • On May 22, 2012, ConAgra Foods, Inc. announced that it has acquired Kangaroo Brands` pita chip business. Based in Milwaukee, WI, Kangaroo Brands is in private label pita chips and generates approximately $20 million in annual revenue.
  • On May 15, 2012, ConAgra Foods, Inc. announced that it has closed its acquisition of Odom's Tennessee Pride, a producer of frozen and refrigerated breakfast sandwiches and sausage.
  • On March 30, 2012, Flowers Foods, Inc. announced the pricing of the public offering of $400 million aggregate principal amount of 4.375% senior notes due 2022. The senior notes will bear interest at a rate of 4.375% per annum and will mature on April 1, 2022.
  • On March 26, 2012, The J.M. Smucker Company announced that it has acquired a non-controlling minority interest in Guilin Seamild Biologic Technology Development Co., Ltd., a privately owned manufacturer and marketer of oats products headquartered in Guilin in the Guangxi province of China, for approximately $35 million.
  • On March 6, 2012, ConAgra Foods, Inc. announced that it has completed its acquisition of Del Monte Canada, based in Toronto, Canada, from an affiliate of Sun Capital Partners.
  • On February 16, 2012, The J.M. Smucker Company announced that due to the impact of the third quarter results and an expected continuation of volume softness in the fourth quarter, as compared to the prior year, the Company is lowering its net sales and earnings guidance for fiscal 2012.
  • On February 10, 2012, Flowers Foods, Inc. announced that for fiscal 2012, the Company expects sales growth of 7.0% to 9.0% and earnings per share growth of 7.0% to 12.0% from adjusted 2011 EPS of $.96.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.