McCormick Q2 Results Smashes Estimates; Raises FY21 Outlook - McCormick & Co (NYSE:MKC)

McCormick & Company Inc MKC reported second-quarter FY21 sales of $1.56 billion, up 11% year-on-year, beating the consensus estimate of $1.47 billion.
Flavor solutions segment sales increased 39%, driven by higher sales of away-from-home products, incremental sales from acquisitions, and growth with packaged food and beverage companies.
Gross profit was $614.6 million, with the profit margin declining 190 basis points Y/Y to 39.5%.
The operating margin contracted 312 basis points Y/Y to 15.25%.
The company generated an operating cash flow of $229 million year-to-date and ended Q2 with $291.8 million in cash and equivalents.
Q2 adjusted net income of $186.1 million declined 6% Y/Y.
Adjusted EPS of $0.69 beat the consensus estimate of $0.61.
Outlook: McCormick raised FY21 sales growth guidance to 11% - 13% from 8% - 10% earlier.
Adjusted EPS outlook raised to $3-$3.05 from the previous $2.97 - $3.02, versus the consensus estimate of $3.00.
For FY21, the company projects another year of strong cash flow, with plans to return a significant portion to McCormick's shareholders through dividends and to pay down debt.
Price action: MKC shares are trading lower by 0.72% at $87.68 on the last check Thursday.