McCormick & Company, Incorporated stock research
FY2023 Q3
McCormick & (MKC) Gross Margin — Quarter Ended Aug 31, 2023
Revenue was slightly higher compared to both the prior quarter and the same quarter last year. Gross profit increased year over year but was relatively stable sequentially, resulting in a gross margin that was higher than a year ago and marginally lower than the prior quarter.
Gross margin takeaway
Quarter ended Aug 31, 2023 · FY2023 Q3
Revenue was slightly higher compared to both the prior quarter and the same quarter last year. Gross profit increased year over year but was relatively stable sequentially, resulting in a gross margin that was higher than a year ago and marginally lower than the prior quarter.
- The strongest observable driver is the year-over-year improvement in gross margin, which rose as gross profit increased more than revenue compared to the same period last year. The sequential change, however, shows a slight decline, indicating that cost of revenue grew at a similar pace to revenue in the latest quarter.
- Compared to the prior quarter, gross margin was slightly lower, with revenue roughly flat and gross profit a little higher. Compared to the same quarter a year ago, gross margin was higher, supported by higher revenue and a larger gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.0%
Gross profit
$622.8M
Revenue
$1.7B
Cost of revenue
$1.1B
Quarter-over-quarter change
-0.1 pts
Year-over-year change
+1.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 28, 2023 | $1.6B | $562.9M | $1.0B | 36.0% |
| May 31, 2023 | $1.7B | $615.5M | $1.0B | 37.1% |
| Aug 31, 2023 | $1.7B | $622.8M | $1.1B | 37.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
May 31, 2023
-0.1 pts
Year-over-year change
Aug 31, 2022
+1.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the year-over-year improvement in gross margin, which rose as gross profit increased more than revenue compared to the same period last year. The sequential change, however, shows a slight decline, indicating that cost of revenue grew at a similar pace to revenue in the latest quarter.
Compared to the prior quarter, gross margin was slightly lower, with revenue roughly flat and gross profit a little higher. Compared to the same quarter a year ago, gross margin was higher, supported by higher revenue and a larger gross profit.
Monitor whether the gross margin can sustain its year-over-year improvement if cost of revenue continues to grow at a similar rate relative to revenue.