US spice maker McCormick & Co. has booked lower first-half profits as margin softness offset sales gains.
Operating profit slipped to $228m, down from $233.9m in the first half of 2012. Margins dipped from 39.3% to 33%, McCormick revealed. Lower income taxes meant net income for the period came in only marginally below last year, at $154.6m compared to $154.9m.
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Net sales in the six months to the end of May totalled US$1.93bn, up from $1.89bn in the corresponding period of last year. The company said top-line growth was driven by higher volumes and product mix adjustments in the consumer business.
During the period, the company emphasised it followed a number of strategic objectives, including the acquisition of Chinese spice maker Wuhan Asia-Pacific Condiments (WAPC), the group emphasised. As a consequence, McCormick raised its full-year sales growth forecast by a percentage point to a 4-6% range.
However, the company lowered its operating income outlook to reflect the $4m in transaction costs associated with the deal. McCormick now expects operating income to grow by 5-7%.
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