McCormick & Co., the US spices and seasonings group, today (30 September) raised its forecast for its annual earnings after a “strong” third quarter, with sales up on both sides of the business.
The company has projected its 2016 earnings per share will fall in a range of $3.68 to $3.72, compared its May forecast of $3.63 to $3.70.
The owner of the Lawry’s and Schwartz brands also gave more precision to its guidance for its sales and operating income after publishing its results for the third quarter and nine months to the end of August.
McCormick now expects to see its sales grow by around 3%. In May, the company forecast growth of 1-3%. Excluding the impact of exchange rates, McCormick sees sales rising by around 6%.
The business, which also counts US sauce brand Stubb’s and French herbs brand Ducros among its products, said it sees its operating income growing around 17% to US$548m. In August, the company gave a guidance range of growth of 16-19%.
In the third quarter of McCormick’s financial year, the company’s net sales grew 3% to $1.09bn. Exchange rates trimmed three points of growth off McCormick’s top line. Last year’s acquisition of Stubb’s and the April purchase of Gourmet Garden contributed a combined two points to the sales growth.
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Operating income was $168m, compared to $139m in the year-ago period. The company recorded $4m of special charges in the third quarter of 2016 compared to $15m a year ago.
McCormick’s third-quarter net income stood at $127.7m versus $97.6m in the third quarter of 2015.
“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,” president and CEO Lawrence Kurzius said.