International Flavors & Fragrances Inc. (IFF) has revealed adjusted earnings of 72 cents per share in the last quarter of 2023, falling behind the Zacks Consensus Estimate of 75 cents – marking a 13% decrease from the same period in the previous year.

The company registered net sales of $2.70 billion in the final quarter of 2023, reflecting a 5% drop from the year before, failing to meet the Zacks Consensus Estimate. On the upside, currency-neutral sales grew by 1% aided by the Scent, Health & Biosciences segments.

Operational Performance

Cost of goods sold for the last quarter dropped by 6.7% year over year to $1.8 billion, while the gross profit saw a 1% decline to $860 million. Research and development expenses increased by 10% to $157 million compared to the prior year.

Adjusted operating EBITDA rose to $461 million, marking a 4.5% increase from the previous year. Notably, the currency-neutral adjusted operating EBITDA was 22% higher than the previous year.

Segment Performances

Revenues in the Nourish segment dropped 11.6% to $1.39 billion in the last quarter of 2023. On a comparable basis, the currency-neutral adjusted operating EBITDA increased by 3% due to gains from price increases and productivity improvements.

Revenues generated in the Health & Bioscience segment reached $528 million, showing a 5% rise on a comparable basis. Adjusted operating EBITDA for the segment escalated to $162 million from $121 million in the prior year.

The Scent segment’s revenues were $578 million, indicating an 11% increase led by growth in both Consumer Fragrance and Fine Fragrance. On a comparable basis, the currency-neutral adjusted operating EBITDA improved by 34%.

Financial Insights

The company had cash and cash equivalents of $703 million at the end of 2023, observing an increase from the prior year. However, long-term debt decreased to $9.2 billion from $10.4 billion in 2022.

2023 Performance & 2024 Guidance

In 2023, International Flavors recorded adjusted earnings of $3.34 per share, in line with the Zacks Consensus Estimate but marking a decrease of 38% from 2022. The company reported net sales of $11.48 billion in 2023, down 7.7% from the previous year.

In fiscal 2024, the company anticipates sales between $10.8 billion and $11.1 billion, with a flat to 3% volume increase and an expected 2.5% decline in pricing.

Price Performance & Rank

Over the past year, International Flavors’ shares have observed a 10.3% decline compared to the industry’s decrease of 23.3%. The company currently holds a Zacks Rank #3 (Hold).

Conversely, some better-ranked stocks in the Consumer Staples sector are Fomento Económico Mexicano, S.A.B. de C.V. (FMX), e.l.f. Beauty, Inc. (ELF) and Inter Parfums, Inc. (IPAR).