McCormick & Co. has reduced its full-year earnings per share forecast despite posting sales and profit growth in the second quarter of its financial year.
The US spice manufacturer is cutting its EPS forecast for the full-year by US$0.06 a share to between $2.74 to $2.79 a share due to $9m in costs related to its acquisition of Polish spice firm Kamis and the joint venture it has formed with Indian company Kohinoor Foods.
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For the quarter ended 31 May, net profit rose 11.2% to reach US$73.6m, while sales increased 11% to $883.7m. The company said that pricing action, taken in response to increased raw and packaging material costs added 5% to sales, while favourable volume and product mix also drove a 3% increase.
The company said that it grew volume and product mix of its consumer business through new product introductions, brand marketing support and new distribution in a number of countries including the US, Canada, France and China.
McCormick expects that pricing actions and cost savings are expect to offset increased material costs, despite increasing beyond its initial projection. It also now expects to achieve at least $45m in cost savings from its Comprehensive Continuous Improvement programme, up on the initially forecast $40m.
Shares in the manufacturer were up 0.43% to $51 a share at 9:52 ET today.
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