Oct 1 (Reuters) – McCormick topped Wall Street estimates for third-quarter profit and sales on Thursday, as stronger pricing for seasonings and sauces helped cushion the impact of rising raw materials and freight costs.
Shares of the company, which have fallen nearly 32% so far this year, were up about 6% in premarket trading.
Packaged goods makers such as McCormick, Conagra Brands and General Mills have leaned on price hikes to shield margins as they counter challenges from uncertainty over US tariffs and surging input costs tied to the Middle East conflict.
For the quarter ended August 31, McCormick’s prices were up 2.2% from a year ago, while organic volumes dipped 0.3%. Its volumes fell 0.5% in the previous quarter.
Persistent pressure on household spending has dampened consumers’ appetite for dining out, improving demand for flavor-boosting condiments like McCormick’s Cholula and Frank’s RedHot sauces — affordable pantry staples that can turn home-cooked meals into something special.
Flavor-focused brands like McCormick are also gaining popularity as GLP-1 weight-loss drugs reshape eating habits, with consumers seeking bolder tastes and smaller-but-more-satisfying meals.
However, the company maintained its annual forecasts for the third time this fiscal year as it navigates an uncertain consumer spending environment.
McCormick said integration planning for the proposed $65-billion merger with Unilever’s foods business was on track and it remains confident that the deal will deliver significant earnings-per-share accretion after closing.
The company reported third-quarter sales of $2.02 billion, compared with analysts’ estimates of $1.98 billion, according to data compiled by LSEG.
Its quarterly adjusted profit came in at 86 cents per share, beating estimates of 76 cents.
(Reporting by Shania S Thomas and Anuja Bharat Mistry in Bengaluru; Edited by Diti Pujara)
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