McCormick & Company, Incorporated (NYSE: MKC) stock rose over 0.4% in the pre-market session of March 31st, 2021 (Source: Google finance) after the company posted better than expected results for the first quarter of FY 21.
The Consumer segment sales grew 35% from the first quarter of 2020, with the Cholula acquisition contributing 3% to that growth. Consumer segment operating income rose 59% to $190 million for the first quarter of 2021. Flavor Solutions segment sales rose 4%, or 3% in constant currency, with the FONA and Cholula acquisitions contributing 5% to that increase. Flavor solutions segment operating income, declined 4% to $73 million for the first quarter of 2021. The Company generated net cash used for operating activities in the first quarter of 2021 of $32 million compared to net cash provided by operating activities of $45 million in the first quarter of 2020. The decrease was mainly due to the timing associated with working capital payments.
MKC in the first quarter of FY 21 has reported the adjusted earnings per share of 72 cents, beating the analysts’ estimates for the adjusted earnings per share of 57 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 22 percent to $1.48 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue by 6.98%.
In fiscal 2021, the Company expects to grow sales in the range of 8% to 10% compared to 2020, which in constant currency is 6% to 8% and includes the incremental impact of the Cholula and FONA acquisitions. This represents an increase from the Company’s previous projection of 7% to 9%, or 5% to 7% in constant currency. McCormick anticipates to drive organic sales growth in both its Consumer and Flavor Solutions segments in 2021 on the back of brand marketing, new products, category management and differentiated customer engagement. The adjusted operating income is expected to grow in the range of 9% to 11%, which in constant currency is 7% to 9%. This represents an increase from the Company’s previous forecasts of 8% to 10%, or 6% to 8% in constant currency. The company has also increased its projected 2021 earnings per share to be in the range of $2.91 to $2.96 and, as compared to $2.83 of adjusted earnings per share in 2020, representing an expected increase of 5% to 7%, which includes a favorable impact from currency.