US spice maker McCormick & Co yesterday (25 November) lowered its profit guidance for the year to reflect the reduced value of its Silvo division.
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McCormick said it will record a non-cash impairment charge of US$28m to $32m in the fourth quarter, or $0.16 to $0.18 per diluted share after-tax.
As a result, earnings per share are expected to reach $1.86 to $1.92 in 2008, compared to $1.73 in 2007. This includes $0.16 to $0.18 of impairment charges, around $0.10 of restructuring charges, and related to the Lawry’s acquisition, a $0.07 gain on the sale of the Season-All business.
Excluding the adjustment, the company affirmed its previous guidance on earnings per share for fiscal 2008.
The company affirmed its previous outlook for a 9% to 11% growth rate in 2008 earnings per share.
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By GlobalData“Our team in Europe has worked hard to grow our Silvo brand, but our progress to date has been disappointing and we must reduce the value of this brand on our balance sheet,” said Alan Wilson, president and CEO. “Silvo continues to be the brand preferred by consumers in The Netherlands, and we, therefore, remain committed to expanding our distribution in this market.”
