Posting a record first quarter that reaped the benefits of last year’s acquisitions and ongoing restructuring efforts, spice maker McCormick has said that it expects to hit the higher end of its earnings forecast for the full year.
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For the quarter, earnings tripled to US$44.2 m, or 33 cents a share, from $14.4m, or 11 cents a share, for the quarter a year earlier. Sales were boosted by the acquisition of Simply Asia Foods, increasing 7% to $652.6m from $609.7m for the year-ago quarter.
The company said that its three-year restructuring plan, due to be completed next year, has increased profitability. The programme, which has included 1,000 job cuts and the consolidation of a number of manufacturing facilities, is expected to generate annual savings of $50m. The cost of implementation has been placed at between $110m and $130m.
Speaking at on a conference call to investors, chairman an CEO Robert J Lawless suggested that the company was actively seeking further acquisitions. “We are actively pursuing a number of brands and businesses that would be a great fit for McCormick,” he said.
With the first quarter typically McCormick’s slowest, Lawless reaffirmed earnings guidance for the year of $1.67 to $1.71 a share. “Based on the outstanding first quarter results, the company has indicated that it is likely to achieve earnings per share at the upper end of this range,” McCormick said. The company predicted sales growth of between 4% and 6%.
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