McCormick (MKC) - Get Report had the recipe to beat Wall Street's second-quarter earnings expectations as increased cooking at home due to the coronavirus-pandemic quarantine boosted the spice and condiment maker's sales.
Shares of the Hunt Valley, Md., company at last check were up nearly 5% at $180.75.
For the second quarter ended May 31 McCormick reported net income of $195.9 million, or $1.46 a share, up from $149.4 million, or $1.12, in the year-earlier quarter. Adjusted earnings came to $1.47, beating FactSet's consensus estimate of $1.16.
Sales grew 7.6% to $1.4 billion, ahead of FactSet's call for $1.38 billion.
Consumer segment sales rose 26% to $962.6 million, while flavor solutions sales slipped 19% to $438.5 million.
"Our exceptional consumer-segment growth was driven by the substantial increase in demand as consumers were cooking more at home," Lawrence Kurzius, chairman, president and CEO, said in a statement.
"In our flavor-solutions segment, our results were significantly impacted by sharp declines in demand from restaurant and other food-service customers as away-from-home dining was significantly curtailed."
The company said consumer segment sales growth was driven by higher volume and product mix in the Americas and Europe, Middle East and Africa regions.
These results were offset partly by a decline in the Asia/Pacific region driven by the extended covid-19 lockdown in Hubei Province, China, one of the company's most highly developed markets.
The decline in the flavor solutions segment sales included a 2% unfavorable impact from currency, across all regions, attributable to the restaurant and foodservice disruption.
McCormick, which withdrew its fiscal 2020 guidance on March 31, said it would not provide any new fiscal guidance as "there remains a high degree of uncertainty about the pace and shape of the covid-19 recovery."