McCormick to underperform in 2022 as supply chain challenges, inflation hurt sales

USA- McCormick & Co. has reported that its business is being negatively impacted by supply chain issues that are taking longer to resolve and inflation that is changing consumer purchasing patterns.

This has resulted in the company lowering its financial projection for 2022 for the second time.

In a statement, CEO Lawrence Kurzius said the “normalization of our supply chain costs is taking longer than expected, pressuring gross margin.”

He said the 133-year-old manufacturer of spices, seasoning mixes, flavorings, and condiments “will be aggressively driving the elimination of supply chain inefficiencies.”

McCormick lowered its projection less than three months ago, citing strong cost inflation and supply chain concerns, and is currently decreasing once again.

The company said adjusted third-quarter earnings would be 65 cents a share, trailing analysts’ estimates, while it expects adjusted earnings for the fiscal year 2022 to be between US$2.63 to US$2.68 a share, a drop from its previous guidance of US$3.03 to US$3.08 was estimated in June.

“Supply chain challenges, heightened costs, and tepid consumption is taking a more pronounced toll on McCormick than foreseen two months ago,” Erin Lash, a director of the consumer sector equity research at Morningstar, said.

According to Kurzius at the Barclays conference, McCormick is also dealing with a deceleration in some trends, such as home baking, which, while elevated, have subsided both faster and earlier than they planned.

The CEO observed that consumers are now less willing to accept price rises due to inflation.

According to Kurzius, McCormick is stepping up its brand marketing efforts and emphasizing the value of its products to promote growth.

As part of a broader brand commitment to food innovation and consumer-centricity, the launch of OLD BAY Seasoned Goldfish marks the second time Goldfish and McCormick & Company have collaborated.

Earlier, McCormick’s seasoning brand Old Bay partnered with leading snack brand Goldfish crackers to release Seasoned Goldfish, a limited-time flavor that brings the bold seafood seasoning staple to everyone’s favorite fish-shaped cracker.

Old Bay lovers are wildly passionate about their favorite seasoning, and Goldfish found that fans have long-been sprinkling Old Bay’s magical blend of 18 herbs and spices on each handful of Goldfish.

As a result, the Old Bay and Goldfish joined forces to deliver a delicious, one-of-a-kind snacking experience for fans and foodies.

New OLD BAY Seasoned Goldfish crackers are made with OLD BAY’s popular spice blend including black pepper, paprika, celery salt, and red pepper flakes.

This blend creates a big, bold flavor combination that complements the classic, premium quality taste of Goldfish.

As part of a broader brand commitment to food innovation and consumer-centricity, the launch of OLD BAY Seasoned Goldfish marks the second time Goldfish and McCormick & Company have collaborated.

The two partnered in April 2021 to debut Frank’s RedHot limited-edition flavored crackers.

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