McCormick Earnings: Even as Consumer Spending Wanes, McCormick Cooks Up Solid Gains

The market found favor with wide-moat McCormick’s second-quarter marks of 20 basis points of adjusted operating margin expansion to 14.4% despite a 1% downdraft in organic sales, sending shares up by a mid-single-digit percentage. However, we don’t see much to warrant a material change to our $67 per share fair value estimate (as results through the first six months of the year are tracking our projections) or long-term outlook (3%-4% annual sales growth and high-teens operating margins), rendering shares a touch heated after the recent climb.