NYSE$MKC
McCormick & Co Inc · Q4 2019 earnings
Q4 2019 earnings · · Investor relations
Briefing
McCormick reported a sales increase driven by new products and base business growth, with solid performance in both consumer and flavor solutions segments.
McCormick reported a 1% sales increase in the fourth quarter of 2019. Earnings per share decreased to $1.59 from $1.60 in the year-ago period. Adjusted earnings per share decreased to $1.61 from $1.67, driven by a higher adjusted income tax rate. The company expects to increase sales year-on-year by 2% to 4% in fiscal year 2020.
- Sales rose 1% from the year-ago period, with 2% growth in constant currency.
- Earnings per share decreased to $1.59 from $1.60 in the year-ago period.
- Adjusted earnings per share decreased to $1.61 from $1.67, driven by a higher adjusted income tax rate.
- Cash flow from operations grew 15% to a record $947 million in 2019.
Headline financials
Revenue & EPS history
McCormick · Revenue · Quarterly
$1.49B
Revenue by segment
McCormick · $1.48B total across 2 segments · Q4 2019
- Consumer$967M—65.1%
- Flavor Solutions$518M—34.9%
Forward guidance
McCormick expects to grow sales compared to 2019 by 2% to 4%. Operating income in 2020 is expected to range from comparable to an increase of 2% from $958 million of operating income in 2019. McCormick projects 2020 earnings per share to be in the range of $5.15 to $5.25.
Tailwinds
- The company expects to drive sales growth with new products, brand marketing and expanded distribution.
- Sales growth is also expected to include the impact of pricing, which in conjunction with cost savings, is expected to offset anticipated mid-single digit inflationary pressures.
- The company has plans to achieve approximately $105 million of cost savings and intends to use these savings to improve margins, fund investments to drive continued growth, and as a further offset to increased costs.
- The company expects strong underlying business performance driven by sales growth will continue in 2020.
- For fiscal year 2020, the company projects another year of strong cash flow, with plans to return a significant portion to McCormick's shareholders through dividends and to pay down debt.
Headwinds
- Strong underlying business performance will be more than offset by a significant incremental investment associated with business transformation and a higher projected effective tax rate.
- The company projects that the incremental expenses in 2020 associated with its business transformation investment will reduce growth in operating income by approximately 6%.
- Approximately $8 million of special charges are currently projected for 2020 that relate to previously announced organization and streamlining actions.
- McCormick projects 2020 earnings per share to be in the range of $5.15 to $5.25, compared to $5.24 of earnings per share in 2019.
- The company’s projected earnings per share growth from its strong underlying business performance is more than offset by 2020 incremental business transformation expenses, estimated to be a 7% reduction in growth, and a 3% headwind from an expected increase in the projected effective tax rate to approximately 22%.
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 18 quarterly earnings reports · overlaid with Q4 2019
+0.1%
Avg return
Earnings day
+0.7%
Avg return
5 days after
+1.4%
Avg return
30 days after
47%
32 / 68 earnings
Positive
+9.6%
Q1 2023
Best reaction
-12.7%
Q4 2018
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q2 2026 | — | — | — | |
| Q1 2026 | +0.9% | -3.7% | — | |
| Q4 2025 | -7.1% | -4.7% | +2.9% | |
| Q3 2025 | -3.9% | -2.4% | -6.2% | |
| Q2 2025 | -1.7% | -0.8% | -2.5% | |
| Q1 2025 | -0.1% | +1.4% | -6.6% | |
| Q4 2024 | +2.1% | +4.7% | +9.4% | |
| Q3 2024 | -0.3% | -2.1% | -4.9% | |
| Q2 2024 | +4.8% | +3.8% | +12.0% | |
| Q1 2024 | +8.7% | +9.8% | +8.0% | |
| Q4 2023 | +5.0% | +5.3% | +3.5% | |
| Q3 2023 | -8.4% | -13.6% | -13.2% | |
| Q2 2023 | -5.0% | -4.0% | -2.2% | |
| Q1 2023 | +9.6% | +12.4% | +18.0% | |
| Q4 2022 | -4.5% | -3.7% | -3.8% | |
| Q3 2022 | +0.2% | +3.5% | +7.8% | |
| Q2 2022 | -4.1% | -4.8% | +0.6% | |
| Q1 2022 | -0.4% | +4.4% | +6.3% | |
| Q4 2021 | +6.8% | +9.3% | +4.6% | |
| Q3 2021 | -3.6% | -4.3% | -4.1% | |
| Q2 2021 | +0.3% | -0.3% | -4.7% | |
| Q1 2021 | -1.1% | -1.0% | +0.5% | |
| Q4 2020 | -4.8% | -4.9% | -10.4% | |
| Q3 2020 | -0.6% | -1.2% | -5.8% | |
| Q2 2020 | +2.3% | +4.1% | +12.3% | |
| Q1 2020 | -3.2% | +2.6% | +9.6% | |
| Q4 2019 | -3.1% | -5.4% | -13.0% | |
| Q3 2019 | +5.4% | +8.1% | +2.8% | |
| Q2 2019 | +2.9% | +4.9% | +7.9% | |
| Q1 2019 | +2.4% | +4.7% | +4.9% | |
| Q4 2018 | -12.7% | -12.8% | -2.3% | |
| Q3 2018 | +1.4% | +2.7% | +6.5% | |
| Q2 2018 | +9.6% | +8.9% | +11.1% | |
| Q1 2018 | -1.0% | -0.5% | -0.1% | |
| Q4 2017 | +7.4% | +7.9% | +6.1% | |
| Q3 2017 | +6.4% | +1.7% | +3.0% | |
| Q2 2017 | -1.5% | -1.7% | -3.5% | |
| Q1 2017 | -3.3% | -3.8% | -1.3% | |
| Q4 2016 | +1.6% | +1.5% | +5.6% | |
| Q3 2016 | -0.5% | -1.6% | -2.0% | |
| Q2 2016 | +3.1% | +4.2% | -0.4% | |
| Q1 2016 | +2.5% | — | — | |
| Q4 2015 | +7.0% | — | — | |
| Q3 2015 | -3.1% | — | — | |
| Q2 2015 | -1.2% | — | — | |
| Q1 2015 | +3.8% | — | — | |
| Q4 2014 | -0.4% | — | — | |
| Q3 2014 | +4.4% | — | — | |
| Q2 2014 | +0.5% | — | — | |
| Q1 2014 | +5.3% | — | — | |
| Q4 2013 | -7.0% | — | — | |
| Q3 2013 | -3.9% | — | — | |
| Q2 2013 | -2.3% | — | — | |
| Q1 2013 | -1.5% | — | — | |
| Q4 2012 | -7.1% | — | — | |
| Q3 2012 | -1.4% | — | — | |
| Q2 2012 | +2.9% | — | — | |
| Q1 2012 | +2.3% | — | — | |
| Q4 2010 | -0.9% | — | — | |
| Q4 2011 | -0.9% | — | — | |
| Q3 2011 | +1.1% | — | — | |
| Q2 2011 | +0.1% | — | — | |
| Q2 2010 | +0.1% | — | — | |
| Q1 2010 | +0.2% | — | — | |
| Q1 2011 | +0.2% | — | — | |
| Q4 2008 | -0.5% | — | — | |
| Q3 2010 | -1.1% | — | — | |
| Q4 2009 | -1.1% | — | — | |
| Q3 2009 | -1.1% | — | — |
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