US spice maker McCormick & Co has reported higher quarterly earnings, boosted by strong sales growth and higher profit margins.
The company posted net income of US$38.1m, or 27 cents per share, for the first quarter to 29 February, compared to $35.1m, or 25 cents per share, in the year-ago period.
Sales for the quarter were $572m, an increase of 18% from the first quarter of 2003. Sales were boosted by higher volumes, pricing and product mix, favourable foreign exchange rates and the 2003 acquisition of Zatarain’s.
Strong sales growth and higher gross profit margin were the main drivers of the first quarter increase in net income and earnings per share, the company said.
“This strong start to our year is encouraging. We are benefiting from our 2003 acquisition activity and distribution gains along with recent new product success,” said CEO Robert Lawless.
“With this momentum and the favourable foreign exchange environment, we expect to exceed our initial objective to increase sales 7-9%. Sales growth is more likely to increase at a low double-digit rate. Our earnings per share objective for 2004 remains $1.51 to $1.54 as we continue to invest in growth initiatives and offset additional cost increases,” he added.
