The 10-second takeaway
For the quarter ended Nov. 30 (Q4), McCormick beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and GAAP earnings per share dropped significantly.
Margins contracted across the board.
McCormick booked revenue of $1.11 billion. The 11 analysts polled by S&P Capital IQ wanted to see revenue of $1.09 billion. Sales were 13% higher than the prior-year quarter's $979.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.98. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.98 per share on the same basis. GAAP EPS of $0.69 for Q4 were 1.3% lower than the prior-year quarter's $0.99 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 43.1%, 200 basis points worse than the prior-year quarter. Operating margin was 17.3%, 120 basis points worse than the prior-year quarter. Net margin was 11.9%, 180 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $868.1 million. On the bottom line, the average EPS estimate is $0.53.
Next year's average estimate for revenue is $3.96 billion. The average EPS estimate is $3.04.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 369 members out of 384 rating the stock outperform, and 15 members rating it underperform. Among 154 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 151 give McCormick a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McCormick is outperform, with an average price target of $53.58.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.