Lizzy McLellan//October 2, 2014
//October 2, 2014
McCormick & Co. Inc. reported favorable third-quarter results Thursday, showing sales growth and a wider profit margin.
The company reported 3 percent growth in sales in the quarter, which ended Aug. 31. Operating income was up 6 percent.
Thanks to these results and a lower tax rate, the company reported earnings per share of 94 cents, which is 21 percent higher than in the third quarter 2013.
Consumer sales showed 2 percent growth thanks to international markets, despite a slight decrease in the Americas. In the Asia/Pacific region, consumer sales grew 10 percent. Specifically in China, they grew 15 percent.
Industrial sales were up 4 percent, with growth in the Americas and Europe, the Middle East and Africa.
“The pace of growth is more rapid in international markets,” said President and CEO Alan D. Wilson. “This change in business mix has led us to moderate our outlook for operating income in 2014, but is also driving a lower tax rate.”
In the fourth quarter, the company plans to increase it marketing support spending by $11 million, said Wilson on a conference call with investors, particularly related to the upcoming holiday season. While holiday display sales on the consumer side were strong in the third quarter last year due to an expected price increase, the company is expecting that rush to take place in the fourth quarter this year.
Wilson said that McCormick’s balance sheet is currently set up well for acquisitions.
The company is considering some transactions, he said, and has typically seen more success by acquiring a smaller business in an emerging market. However, he said, McCormick would also consider products in the U.S. market in adjacent categories but not in spices and seasonings.t