(Bloomberg) -- McCormick & Co. slumped the most since the start of the Covid pandemic after the maker of spices and seasonings reported sales that trailed expectations — in part due to a slower-than-expected economic rebound in China.
The company’s net sales missed analysts’ expectations, while the volume of goods shipped to retailers fell 2%, which was a bigger-than-expected decline. McCormick’s consumer business posted much slower growth than its company-focused unit, called Flavor Solutions, in the quarter ended Aug. 31, according to a statement. Operating income also missed estimates.
McCormick shares fell as much as 11% on Tuesday. The stock had already dropped 10% this year through Monday’s close, versus the 12% gain of the S&P 500 Index.
“In our consumer segment, sales growth in the Americas and EMEA regions was partially offset by an unfavorable China impact,” Chief Executive Officer Brendan Foley said, using an abbreviation for Europe, the Middle East and Africa.
China’s economic recovery has taken longer than anticipated, McCormick said, and comparisons to strong demand a year earlier also hurt results.
McCormick reiterated it sees sales of growth of 5% to 7% in fiscal 2023, mostly driven by higher prices. It boosted guidance for annual earnings per share.
The company, which makes Cholula hot sauce and French’s mustard, has reported declines in volume for seven consecutive quarters.
©2023 Bloomberg L.P.