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McCormick Slashes FY22 Earnings Outlook - Update

While reporting financial results for the second quarter on Wednesday, flavor maker McCormick & Co., Inc. (MKC) trimmed its earnings and adjusted earnings guidance for the full year 2022, while maintaining annual sales growth outlook.

The company said the updated guidance reflects a more unfavorable impact of foreign currency rates, the impact of higher cost pressures and the related pricing actions, the unfavorable impact of significant disruption in China from COVID-related lockdowns, the conflict in Ukraine and the Company's growth momentum. In addition, the company now expects a favorable impact from the optimization of its debt portfolio.

For fiscal 2022, the company continues to project earnings in a range of $2.89 to $2.94 per share and adjusted earnings in a range of $3.03 to $3.08 per share on sales growth of 3 to 5 percent, which in constant currency is 5 to 7 percent.

Previously, the company expected earnings in a range of $3.07 to $3.12 per share and adjusted earnings in a range of $3.17 to $3.22 per share on sales growth of 3 to 5 percent, which in constant currency is 4 to 6 percent.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $3.17 per share on sales growth of 4.30 percent to $6.59 billion for the year. Analysts' estimates typically exclude special items.

McCormick said it expects sales growth to be driven by pricing actions, which, in conjunction with cost savings, are expected to offset inflationary pressures over time. McCormick also plans to drive continued growth through the strength of its brands, as well as brand marketing, new products, category management, and differentiated customer engagement.

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