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Will McCormick’s 1Q Results Boost Its Stock?

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Analysts expect double-digit growth

McCormick (MKC) is slated to announce its fiscal 1Q18 results on March 27, 2018. Analysts remain upbeat and expect McCormick to post strong double-digit growth in its sales and EPS (earnings per share). McCormick’s top line is projected to benefit from improved volumes, higher pricing, and expanded distribution. Plus, strength across North America and China should support its sales growth rate.

Also, incremental sales from the recently acquired RB Foods and higher demand for Giotti and Gourmet Garden products are expected to support its top line. Moreover, the company’s bottom line is also projected to see stellar growth due to higher sales and increased cost-savings from its restructuring program. However, investments in marketing, inflation in commodity prices, higher interest expenses owing to the increased level of debt, and reduction in shelf space at a large retailer in the UK could remain a drag.

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YTD stock performance

McCormick stock is up about 5.7% on a YTD (year-to-date) basis as of March 20, 2018, and has outperformed the S&P 500 Index (SPX-INDEX) and other major packaged food manufacturers in the US.

On a YTD basis, the S&P 500 Index has registered a gain of 1.6%. Meanwhile, stocks of the majority of packaged food manufacturers are trading in the red. Kraft Heinz (KHC), General Mills (GIS), Hershey (HSY), and Campbell Soup (CPB) have seen double-digit declines on a YTD basis. The stock prices of Kellogg (K), Conagra Brands (CAG), and Mondelēz (MDLZ) registered low-single-digit declines.

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