McCormick CEO says supply chain issues are limiting the spice maker as it sees demand surge
- "Across our business right now, the supply chain is really our limiting factor," McCormick & Company CEO Lawrence Kurzius told CNBC on Monday.
- "It's not demand. Demand is incredible," he said on "Mad Money."
- The spice maker also is grappling with "unprecedented" inflation, Kurzius told Jim Cramer.
McCormick & Company CEO Lawrence Kurzius told CNBC on Monday that pandemic-fueled logistics complications are challenging the spice maker's ability to respond to "incredible" demand for its products.
"Across our business right now, the supply chain is really our limiting factor. Demand is extraordinarily high for all of our products both on the consumer side ... but also for our flavor solutions and flavor systems business," Kurzius said in an interview on "Mad Money."
In addition to its well-known spice jars, McCormick also makes Old Bay Seasoning, French's mustard and hot sauces such as Cholula and Frank's Red Hot.
"Transportation and logistics issues, just getting the product from point A to point B, is our single limiting factor," Kurzius said. "It's not demand. Demand is incredible."
Kurzius' comments come a few days after McCormick reported third-quarter results that topped Wall Street estimates on both earnings per share and revenue. However, the company lowered its full-year forecast for adjusted earnings per share as it grapples with supply-chain challenges and price pressures.
"We're looking at unprecedented inflation, as all of industry is right now," Kurzius told host Jim Cramer on Monday. "We're going to have to manage our way through this time of cost inflation, just as we have in the past. It's going to be a mix of price increases, unfortunately, and also cost-effectiveness through our [comprehensive continuous improvement] program."
Shares of McCormick closed flat Monday at $80.69 in what was an otherwise down day for Wall Street. The company's stock is down more than 15% year to date.
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