McCormick (NYSE:MKC) will release its quarterly report on Thursday, and investors have backed away somewhat from the stock lately. With projections showing McCormick earnings could be stagnant this quarter, the main question facing investors is whether the spice giant can translate sales gains into more profit.

McCormick dominates the spice space, with a powerful name brand as well as a private-label business that serves a wide variety of customers. It also meets the spicing needs of food giants including PepsiCo (NYSE:PEP) and General Mills (NYSE:GIS). Yet the company has faced some challenges lately, as uninspiring demand for its products has weighed on its bottom-line results. Can McCormick leave investors with a better taste in their mouth this time around? Let's take an early look at what's been happening with McCormick over the past quarter and what we're likely to see in its report.

Stats on McCormick

Analyst EPS Estimate

$0.78

Change From Year-Ago EPS

0%

Revenue Estimate

$1.03 billion

Change From Year-Ago Revenue

5.7%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will McCormick earnings look spicier this quarter?
Analysts have become less optimistic in recent months in their views on McCormick earnings, cutting $0.04 per share from their estimates for both the quarter that ended in August and their full fiscal-year projections. The stock has had similarly bland results, falling 3% since late June.

McCormick started the quarter on a somewhat sluggish note, with disappointing results that left shareholders concerned. Weakness centered on the company's industrial segment, which brings in about 40% of its overall revenue and serves PepsiCo, General Mills, and other restaurant and food-company clients with the spices they need to prepare their own products for consumers. McCormick specifically noted weakness among its quick-service restaurant clients, as major customer Yum! Brands (NYSE:YUM) has had to deal with fallout from avian flu in China and the consequent reduction in traffic at its popular KFC restaurant locations in the emerging-market nation.

However, McCormick continues to have a dominant presence on the consumer side of the business. The company still expects solid results from the segment, which boasts higher margins and more predictable revenue than the more economically sensitive industrial segment. With two-thirds of its brands having top market share, McCormick has been able to capitalize on greater spice demand in home kitchens.

One constant remains -- McCormick's high valuation. Even with the stock having fallen slightly, shares still fetch an earnings multiple of roughly 20 times forward earnings for fiscal 2014. That leaves little margin for error if the company fails to deliver on its growth prospects.

In the McCormick earnings report, watch to see how the company's recent acquisition of Wuhan Asia-Pacific Condiments has fared. With hopes that the move would bolster McCormick's prospects in China, positive results would prove the strength of the company's strategic vision.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends PepsiCo. The Motley Fool owns shares of PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.