US spice and seasonings group McCormick & Co yesterday [Wednesday] reported net profits of US$35.2m, or 25 cents per share, in its fiscal third quarter ended 31 August.
This represents a slight upturn from the $34.3m or 24 cents per share reported in the year-ago period. Sales growth and advantageous foreign exchange rates boosted the bottom line, compensating for shrinking profit margins and softness in the group’s UK brokerage business.
These results are smack in line with analysts’ forecasts of 24-6 cents per share, with an average estimate at 25 cents per share. However, McCormick has a recent history of surprising shareholders with earnings slightly above expectations, so these results may disappoint some.
Sales rose 2% to $545m. However, before the favourable impact of foreign currency, sales fell 1%. McCormick said the timing of consumer purchases reduced sales to retail and food service customers in the US, pushing gross profit margins down to 34.8% from 35.3% last year.
McCormick reiterated its earlier full-year forecast of sales growth at 4-6%, and said it expected to hit the “lower end” of previous estimated earnings growth of 9-11%.
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