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How Did McCormick & Company Perform in 3Q16?

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Price movement

McCormick & Company (MKC) has a market cap of $12.7 billion. It rose 2.6% to close at $99.92 per share on September 30, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.3%, -2.0%, and 17.8%, respectively, on the same day.

MKC is trading 2.0% above its 20-day moving average, 0.36% below its 50-day moving average, and 4.9% above its 200-day moving average.

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Related ETF and peers

The SPDR S&P 500 ETF (SPY) invests 0.06% of its holdings in McCormick. The ETF tracks a market-cap-weighted index of US large-cap and mid-cap stocks selected by the S&P Committee. The YTD price movement of SPY was 7.7% on September 30, 2016.

The market cap of McCormick’s competitors are as follows:

  • Kraft Heinz (KHC): $109.0 billion
  • Tyson Foods (TSN): $27.4 billion
  • ConAgra Foods (CAG): $20.7 billion

McCormick’s performance in fiscal 3Q16

McCormick reported fiscal 3Q16 net sales of $1.09 billion, a rise of 2.8% compared to $1.06 billion in fiscal 3Q15. Sales of its consumer segment rose 5.0%, and sales of its industrial segment fell 0.09% in fiscal 3Q16 compared to fiscal 3Q15. The company’s gross profit margin and operating income rose 4.5% and 21.0%, respectively, in fiscal 3Q16 compared to the prior year’s period.

Its net income and EPS (earnings per share) rose to $127.7 million and $1, respectively, in fiscal 3Q16 compared to $97.6 million and $0.76, respectively, in fiscal 3Q15. It reported adjusted EPS of $1.03 in fiscal 3Q16, a rise of 21.2% compared to fiscal 3Q15.

MKC’s cash and cash equivalents and inventories rose 23.8% and 4.6%, respectively, in fiscal 3Q16 compared to fiscal 3Q15. Its current ratio and debt-to-equity ratio rose to 1.1x and 1.7x, respectively, in fiscal 3Q16 compared to 1.0x and 1.5x, respectively, in fiscal 3Q15.

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Quarterly dividend

McCormick has declared a quarterly dividend of $0.43 per share on its common stock. The dividend will be paid on October 25, 2016, to shareholders of record on October 11, 2016.

Projections

The company has made the following projections for fiscal 2016:

  • sales growth of ~6%, excluding the impact of unfavorable currency rates, driven by the increase in base business sales, new products, pricing, and acquisitions
  • adjusted operating income rise of ~7%, which excludes the impact of special charges
  • adjusted EPS of $3.75–$3.79, which excludes $0.07 for the impact of special charges

For an ongoing analysis of the consumer discretionary sector, please visit Market Realist’s Consumer Discretionary page.

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