McCormick: Visible Neat-Term Headwinds Prevent Me From Upgrading To Buy
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McCormick & Co. faces near-term headwinds despite volume growth and recovering gross margins. The company's 4Q24 results showed net sales of $1.8 billion, but adjusted EPS declined due to higher tax rates and operating expenses. Geographic pressures in Asia Pacific and flat volumes in the Flavor Solutions segment limit revenue growth.
January 25, 2025 | 10:45 am
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McCormick & Co. reported $1.8 billion in net sales for 4Q24, driven by volume gains. However, adjusted EPS declined due to higher tax rates and operating expenses. Geographic pressures in Asia Pacific and flat volumes in the Flavor Solutions segment are significant headwinds.
The decline in adjusted EPS despite volume growth indicates financial challenges. Higher tax rates and operating expenses are impacting profitability. Geographic pressures in Asia Pacific and flat volumes in the Flavor Solutions segment suggest limited revenue growth potential in the near term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100