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McCormick Says It Is Splitting Its Stock After Another Strong Sales Performance

By Demitri Kalogeropoulos – Sep 29, 2020 at 12:20PM

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Sales should grow by at least 6% this fiscal year, management announced.

The spicing and flavorings business is still booming. On Tuesday McCormick (MKC 1.60%) announced strong sales and profit results as part of its fiscal third-quarter announcement. Management also said it is conducting its first stock split since 2002 thanks to an improving demand outlook.

Revenue rose 9% in the three months ended on Aug. 31, which represented just a modest slowdown from the spike in the prior quarter that was influenced by pandemic-related restaurant shutdowns. McCormick continued to see elevated demand for its spices and condiments at supermarkets, but executives noted a solid rebound in its restaurant segment, too.

A home chef sprinkles seasoning on a steak.

Image source: Getty Images.

The growth through August has CEO Lawrence Kurzius and his team feeling confident enough to issue a short-term outlook for the first time since executives pulled their forecast in March. McCormick believes sales will rise by about 6% in fiscal 2020, compared to their pre-COVID-19 outlook of roughly 2% gains.

Elevated demand for at-home cooking products may continue to lift results at least into early 2021, and that trend factored into management's 2-for-1 stock split announcement. McCormick plans to distribute the new shares in late November, with the stock trading under the split-adjusted price starting on Dec. 1.

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

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