McCormick Delivers ‘Spicy’ Q3, Shares Inch Higher
McCormick & Company (NYSE: MKC), a maker and distributor of spices, seasoning mixes, condiments and other products to the food industry, reported its third quarter results on Friday which helped boost shares higher by nearly 3 percent.
McCormick’s stock has been performing well this year and is higher by more than 15 percent since the start of 2016. Over the past year shares have gained more than 20 percent and Friday’s earnings announcement provided investors with enough evidence it is on the right track to continue growing.
McCormick said that it earned $1.03 per share in the third quarter on revenue of $1.09 billion. Wall Street analysts were expecting the company to earn $0.94 per share on revenue of $1.09 billion.
Net income for the quarter rose to $127.7 million from $97.6 million in the same quarter a year ago as sales rose three percent over the same time period or six percent on a constant currency basis.
Of note, sales in the Americas region rose eight percent with strength seen in the McCormick and Lawry’s brand spices and seasonings, Zatarain’s brand items and Kitchen Basics products. Stubb’s, best known for its line of BBQ sauces, added three percentage points of the increase.
Sales across Europe, Middle East and Africa (EMEA) fell two percent but rose one percent on a constant currency basis. The United Kingdom was highlighted as experiencing some weakness.
Sales in the Asia/Pacific region rose five percent or 11 percent on a constant currency basis. Sales of Gourmet Garden added seven percentage points of the increase. China and India were both highlighted as strong performers.
Looking forward to the full fiscal year, the company expects to earn $3.75 to $3.79 per share after previously guiding its full year earnings to be on the higher end of a $3.68 to $3.75 per share range. By comparison, the company earned $3.11 per share in the full year fiscal 2015.
McCormick also expects to deliver cost savings of $100 million to $110 million in 2016 and part of the savings will be invested in brand marketing and other growth initiatives.
Lawrence E. Kurzius, President and CEO, stated, “Our strong third quarter financial results demonstrate the effective execution of our strategy. We are driving both sales growth and significant productivity improvements, and expect 2016 to be a record year for McCormick. The efforts and engagement of employees throughout the company are driving this performance.”