McCormick Profits Helped by US Sales
03 Oct 2016 --- McCormick has reported that its income jumped 31 percent to $127.7m in the third quarter, helped by strong sales in the US. Income was up from $97.7m to $127.7m in the three months ending August 31 compared to the year previous, which beat the expectations of analysts.
In the US, sales were up eight percent, with strong growth from McCormick and Lawry's brand spices and seasonings, its Zatarain's brand and Kitchen Basics products.
Sales from Stub’s, the business it acquired 2015, and Gourmet Garden, which it acquired in 2016, also helped with boost revenues.
But sales in Europe, Middle East and Africa (EMEA) decreased two percent.
Sales growth in France, Poland and Russia was driven by brand marketing, product innovation, expanded distribution and pricing, however this was offset in part by sales weakness in a challenging UK retail environment.
Third quarter consumer sales in the Asia/Pacific region rose five percent, helped by a growth in sales in China.
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 engagementof employees throughout the company are driving this performance.”
"Consumer demand for healthy and high quality flavors continues to grow in markets around the world. In both our consumer and industrial segments, we are meeting this demand with a broad portfolio of on-trend products in our base business, innovative new products and through acquisitions.”
“All of these factors contributed to our third quarter sales increase of three percent which was six percent in constant currency, and we achieved particularly strong growth in our consumer business in the US and in China.”
“We are balancing these strategies to grow sales with our actions to improve productivity and lower costs. Led by our Comprehensive Continuous Improvement (CCI) program, we expect to achieve cost savings of $100 million to $110 million in 2016.”
“We are investing a portion of these savings in brand marketing and other growth initiatives and also driving greater profitability for our business, as demonstrated by the strong increase in third quarter operating income."
