Please ensure Javascript is enabled for purposes of website accessibility

Why McCormick Stock Rose 12% in May

By Demitri Kalogeropoulos – Updated Jun 4, 2020 at 8:53AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are betting on a sustained uptick in demand for spice and flavoring products as consumers spend more time at home.

What happened

McCormick (MKC -0.83%) shareholders outperformed a rallying stock market last month. Shares rose 12% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The boost put the spice and flavorings specialist back in positive territory so far in 2020, with shares modestly ahead of the market through early June.

A persons adds spice to a piece of meat on a cutting board

Image source: Getty Images.

So what

McCormick didn't announce any operating news last month, but investors still found a few reasons to feel more optimistic about its global spice business. The chain said in early April that sales volumes in its consumer-focused division nearly doubled as people hunkered down in their homes during the start of social distancing efforts. Executives said they saw those trends continuing at least through the short term, too.

The company also announced in late May that it was busy hiring more employees and had just issued premium pay incentives to much of its workforce. These moves suggest the chain is still seeing elevated demand for its consumer staples products even as the restaurant industry operates at a fraction of its total capacity. 

Now what

McCormick will announce fiscal second-quarter results on June 25 in a report that will show exactly how its demand trends shifted through the COVID-19 outbreak. Investors will be focused on management's comments about where sales volumes are settling, though, now that the threat of the virus is fading and people are relaxing their social distancing efforts.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

McCormick & Company, Incorporated Stock Quote
McCormick & Company, Incorporated
MKC
$76.03 (-0.83%) $0.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.