McCormick & Company (NYSE:MKC) shares dropped more than 10% Tuesday afternoon after the company reported third-quarter earnings that met expectations but revenue that missed the mark.
The spices and seasonings company said its consumer segment benefitted from sales growth in the Americas and EMEA regions. However, this was partly offset by a weaker outcome in China due to the slower-than-expected recovery from COVID-19 disruptions.
For the quarter ended August 31, 2023, group sales rose 6% to $1.68 billion, below the $1.69 billion expected by Zacks Investment Research. Underlying earnings per share (EPS) of $0.65 were in line with expectations.
“Our results reflect strong underlying business trends that were in line with our expectations across our business, notwithstanding our Consumer segment in APAC, where the pace of China's economic recovery has been slower than anticipated,” president and CEO Brendan Foley commented in a statement.
“We remain confident in our ability to deliver on our outlook and in the sustained trajectory of our business.”
The company has reaffirmed its full-year sales and operating income outlook despite the setback in China, with sales expected to grow by 5-7% and operating income by 11-13%.
It increased its adjusted EPS outlook to between $2.62 and $2.67, driven by the strong year-to-date and projected performance of its joint venture, McCormick de Mexico.
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