McCormick & Co. booked a rise in first-quarter sales and earnings as increased revenues from the group’s operations in Asia Pacific boosted the top line.
The company said today (25 March) sales rose 6% in the quarter ended 28 February, climbing to US$993.4m.
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The acquisition of Chinese spice maker WAPC, completed in May last year, contributed four points of the sales growth. The deal also resulted in a 66% increase in sales generated in the Asia Pacific region. In contrast, consumer sales in the US dipped 1%, offset by a 2% increase in industrial sales in the region.
McCormick said profitability also benefited from a number of cost-saving initiatives and product mix improvement. Operating profit rose to $124.6m in the quarter, up from $112m, while net profit rose to $82.5m, up from $76m in the year-ago period.
Janney Montgomery Scott analyst Jonathan Feeney said McCormick’s first-quarter performance came in ahead of expectations, with earnings per share of $0.62 beating consensus forecasts of $0.58.
“Through its profitable developed market stronghold, bolt-on M&A, and rising mix towards macro sensitive foodservice and emerging markets, McCormick has delivered returns slightly ahead of peers over the past five and ten years… The market appears to be anticipating outsized volume and profit growth, where instead we see a more steady performance tempered by some developed market volume risk,” he wrote in a note to investors.
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By GlobalDataLooking to the full year, McCormick said it anticipates sales growth of 3-5%.
