McCormick income down 3% in quarter

by Staff
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SPARKS, MD. — Despite improved sales, higher material costs and an increase in brand marketing support led to a 3% decrease in income for McCormick & Co., Inc. during the first quarter.

For the quarter ended Feb. 29, the company had income of $74.5 million, equal to 56c per share on the common stock, which compared with $76.8 million, or 58c per share, during the same quarter of the previous year. Sales for the quarter were $906.7 million, up 16% from $782.8 million.

“Our financial results for the first quarter of 2012 demonstrated the effectiveness of our strategy and growth initiatives,” said Alan D. Wilson, president and chief executive officer. “We grew net sales 16%, with double-digit increases in both our consumer and industrial businesses. More than a third of our sales growth was driven by acquisitions in emerging markets that we completed in 2011. We have pricing actions in place as a response to higher material costs, which also led to higher sales. In an environment where consumers in many markets are confronted with a tough economy and higher prices, we were pleased to achieve increased volume and product mix.

“Product innovation, expanded distribution and a 22% increase in brand marketing support helped maintain the positive momentum for our business, and we continue to benefit from our Comprehensive Continuous Improvement program. As anticipated, profit margins in the first quarter were adversely affected by year-over-year material cost inflation, although this situation is expected to gradually improve in the remainder of 2012. As a result of lower profit margins, we projected a reduction in net income and earnings per share when compared to the first quarter of 2011.”

For the fiscal year 2012, the company expects earnings per share to be in the range of $3.01 to $3.06.

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