McCormick fiscal year earnings, sales increase
January 23, 2008
by Jeff Gelski
SPARKS, MD. — Sales for McCormick & Co., Inc. increased 7% to $2,916,169,000 in the fiscal year ended Nov. 30, 2007, thanks to favorable foreign exchange rates, higher prices, new product success, revitalization efforts, marketing programs and an acquisition strategy. Earnings were $1.78 per share, which compared with $1.53 per share in the previous fiscal year.
Sales in the industrial business increased by double-digit percentages in both Europe and the Asia/Pacific region. Incremental sales from the Simply Asia Foods business acquired in June of 2006 drove higher sales volume in the U.S. consumer business. Strong growth of Hispanic items, gourmet products and grinders also drove growth.
Cost reductions that were part of a restructuring program and pricing actions partially offset cost increases in raw materials such as pepper, wheat, soy, oil and cheese. The restructuring program has realized $45 million in annual savings and is on track to reach $55 million by the end of the program in 2008, said Alan D. Wilson, president and chief executive officer.
McCormick & Co. expects earnings per share to increase 8% to 10% in 2008 with sales growing 4% to 6% thanks to new product introductions, revitalization of core brands and price increases. A favorable foreign exchange rate should play a role in the first part of 2008.
"Looking ahead to 2008, we expect another year of solid sales and profit growth," Mr. Wilson said. "Our new product line-up includes innovative products like flavored pepper and ‘Crusting Blends’ in the U.S. and in Europe, the expansion of our successful ‘Toppers’ range into additional markets as well as the introduction of premium products in new packaging formats.
"For industrial customers we are working on a number of new products with particular interest in products that promote health and wellness."
McCormick and Co. also reported increases in the fiscal year’s fourth quarter. Sales increased 7% to $860,088,000. Earnings rose to 69c per share from 64c per share.