(Reuters) - Hot sauce maker McCormick (NYSE:MKC) raised its annual earnings forecast on Tuesday after posting better-than-expected third-quarter results, banking on consumers choosing to make meals at home to curb discretionary spending amid sticky inflation.
Shares of the company were up about 2% in premarket trading.
McCormick saw uptick in demand for its products like spices and seasonings as consumers have opted to purchase staples to reduce expenses such as eating out in restaurants.
The Cholula hot sauce maker's sales volume rose 1% for the quarter ended Aug. 31, after dipping 2% a year earlier.
Benefits from cost savings measures to streamline business as well as price hikes taken in the past quarters helped expand its quarterly gross profit margin by 170 basis points to 38.7%.
While McCormick and its peer International Flavors & Fragrances (NYSE:IFF) saw steady demand and volume improvement in their latest quarter, larger peer Kraft Heinz (NASDAQ:KHC) reported dour quarterly sales after taking a hit on volumes.
For the full year, the company expects sales to be in the range of down 1% to up 1%, compared with its prior forecast range of down 2% to flat.
It projects annual adjusted profit to be in the range of $2.85 to $2.90 per share, compared with its prior forecast of $2.80 to $2.85.
The company posted third-quarter net sales of $1.68 billion, compared with analysts' estimates of $1.67 billion, according to data compiled by LSEG.
It reported adjusted profit of 83 cents per share, beating estimates of 67 cents.