McCormick sales rise 17.4% as special charges cut reported profit
McCormick’s third-quarter sales rose 17.4 percent, largely reflecting the consolidation of McCormick de Mexico. Growth excluding acquisitions and exchange rates was 1.9 percent. Special charges reduced reported earnings per share to $0.36, while adjusted earnings edged up to $0.86. The spice and flavor producer kept its annual guidance, with higher tax and interest expenses partly offsetting adjusted operating-income growth.
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Quarterly revenue reaches about $2.02bn
McCormick, the spice and flavor producer, reported revenue of about $2.02 billion for its fiscal third quarter ended in August, compared with $1.72 billion a year earlier. Adjusted earnings per share reached $0.86, against $0.85 in the earlier period. Adjusted earnings exclude non-recurring items. The results were released on 1 October and cover the company’s quarterly operations, with sales gains accompanied by a much smaller increase in adjusted per-share earnings.[1], [2]
Mexican consolidation supplies most sales growth
Sales increased 17.4 percent, with acquisition effects adding 14.6 percentage points and currency contributing 0.9 percent. In January, McCormick increased its stake in McCormick de Mexico from 50 percent to a controlling 75 percent and began including that business in consolidated results. Organic growth, excluding acquisitions and currency, was 1.9 percent. Pricing contributed 2.2 percent, while volume and product mix contributed negative 0.3 percent. Consumer-segment sales rose 24.9 percent.[1]
Special charges reduce reported earnings
Reported earnings per share fell from $0.84 to $0.36, with special charges reducing earnings by $0.50 per share. Operating income declined to $217 million from $289 million; excluding special charges, it increased to about $359 million from $294 million. Exiting a pepper-sourcing project in Malaysia involved about $43.1 million of noncash impairment and $1.8 million of exit costs. The company retained its fiscal-year sales-growth and adjusted-earnings guidance.[1]
