What Happened?
Shares of food flavoring company McCormick (NYSE: MKC) fell 7% in the afternoon session after the company issued a weak profit forecast for the upcoming fiscal year and reported fourth-quarter results that missed expectations.
The spice and condiment maker's adjusted profit for the fourth quarter came in at $0.86 per share, slightly below Wall Street's estimate of $0.88. More concerning for investors, however, was the company's outlook. McCormick projected full-year adjusted earnings with a midpoint of $3.09 per share, missing analysts' expectations by 3.5%. This disappointing guidance overshadowed a quarter where revenue of $1.85 billion actually beat estimates, signaling that investor concern was focused on future profitability.
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What Is The Market Telling Us
McCormick’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 5.6% on the news that after the company reported second-quarter 2025 earnings that beat analyst expectations and reaffirmed its full-year financial outlook.
The company posted an adjusted earnings per share of $0.69, surpassing the consensus estimate of $0.65. This positive result was driven by a 10% increase in adjusted operating income, which reached $259 million. Sales saw a modest 1% increase, but importantly, this was led by a 2% rise in organic sales volume, indicating that consumers are buying more of its products. The performance of the Consumer segment was a particular bright spot, with net sales growing by 3%. Management expressed confidence in their strategy, reaffirming their fiscal 2025 guidance for sales and adjusted earnings per share, signaling stability despite what they termed a "dynamic environment.".
McCormick is down 9.5% since the beginning of the year, and at $60.90 per share, it is trading 28.1% below its 52-week high of $84.73 from March 2025. Investors who bought $1,000 worth of McCormick’s shares 5 years ago would now be looking at an investment worth $662.89.
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