Advertisement
Canada markets close in 1 hour 20 minutes

  • S&P/TSX

    21,751.30
    +42.86 (+0.20%)
     

  • S&P 500

    4,960.85
    -50.27 (-1.00%)
     

  • DOW

    37,881.60
    +106.22 (+0.28%)
     

  • CAD/USD

    0.7269
    +0.0006 (+0.08%)
     

  • CRUDE OIL

    83.00
    +0.27 (+0.33%)
     

  • Bitcoin CAD

    88,451.58
    +1,902.09 (+2.20%)
     

  • CMC Crypto 200

    1,383.86
    +71.24 (+5.43%)
     

  • GOLD FUTURES

    2,409.50
    +11.50 (+0.48%)
     

  • RUSSELL 2000

    1,940.92
    -2.04 (-0.11%)
     

  • 10-Yr Bond

    4.6190
    -0.0280 (-0.60%)
     

  • NASDAQ

    15,272.34
    -329.16 (-2.11%)
     

  • VOLATILITY

    18.61
    +0.61 (+3.39%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • CAD/EUR

    0.6825
    +0.0004 (+0.06%)
     
MARKETS LIVE BLOG:

S&P 500 SLIPS BELOW 5,000; NASDAQ SINKS ON NETFLIX DRAG

Fed's Goolsbee says 'It makes sense to wait' before cutting rates

McCormick Up 6% in 3 Months, Cost-Saving Efforts Add Sheen

Zacks Equity Research

McCormick & Company, Incorporated MKC, a renowned spices and condiments company, is in investors’ good books. This Zacks Rank #3 (Hold) company has gained 6.4% in the past three months compared with the industry’s rise of 1.1%. Prudent saving efforts and initiatives to strengthen brands have been favoring the company. However, adverse currency movements are a threat. Let’s take a look.



CCI Plan & Other Growth Moves

McCormick focuses on saving costs and enhancing productivity through the Comprehensive Continuous Improvement (CCI) program. The company is utilizing CCI savings to increase investments, which is driving sales and profits. Notably, cost savings from CCI boosted adjusted operating income in the first, the second and the third quarter of fiscal 2019. Going ahead, McCormick continues to expect gaining from its saving efforts. In fact, the company projects cost savings worth $110 million in fiscal 2019, which will be utilized for enhancing margins, sponsoring growth-oriented investments and offsetting high costs.

Additionally, strong brands are a key catalyst to McCormick’s growth. The company has undertaken prudent acquisitions to widen the portfolio.  The buyout of the food division of RB Foods has added iconic brands like Frank's and French's to its portfolio. These brands have positioned the company in the leading U.S. condiments category and placed it well for international expansion. Some of the other noteworthy acquisitions are Enrico Giotti SpA and Botanical Food Company. Going forward, management expects to continue exploring acquisition opportunities as such moves are integral to the company’s long-term growth strategies.

McCormick regularly enhances products through innovation to stay competitive and tap into evolving demand for new flavors, spices and herbs. Notably, the company’s performance in the first, the second and the third quarter of fiscal 2019 gained from new products along with advancement in the base business. In fact, new products are boosting the company’s performance across some key market locations, such as the Americas and Asia-Pacific regions. The company is also on track to boost marketing support for existing and new brands.

Can Upsides Cushion Currency Woes?

Adverse currency movements were a drag on McCormick’s top and the bottom line in the first, the second and the third quarter of fiscal 2019. Earlier, management had predicted that such headwinds will affect net sales, adjusted operating income and the bottom line in fiscal 2019.

Nevertheless, we expect the company’s prudent efforts to boost savings and brand offerings to provide sufficient cushion to adversities stemming from currency volatility. Wrapping up, we believe these upsides to continue aiding the company in maintaining strong footing in the food space.

Check These Solid Consumer Staple Stocks

TreeHouse Foods THS has long-term earnings per share (EPS) growth rate of 13.8% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hershey HSY has a Zacks Rank #2 and long-term EPS growth rate of 7.3%.

The Estee Lauder Companies EL has long-term EPS growth rate of 21.7% and a Zacks Rank of 2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
 
Hershey Company (The) (HSY) : Free Stock Analysis Report
 
McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report
 
TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research