The spice maker still reported a 17% increase in sales during the latest quarter, largely due to its acquisition of a controlling interest in Mc Cormick de Mexico earlier this year. On an organic basis, sales ticked up 1.9%. Profit fell as Mc Cormick faced higher input and freight costs, though productivity initiatives helped offset the pain and boost margins. Overall, the quarterly results were better than many feared they would be, JPMorgan analysts said in a research note.
Currently, consumers are incredibly conscious of value, Foley said on a call with analysts. And in many cases shoppers are buying fewer spices and seasonings when forced to pay higher prices for foods such as seafood and beef. Mc Cormick is addressing these behaviors by optimizing its portfolio to better serve its customers' needs, and by selectively implementing pricing and promotional actions to drive sales, Foley said. The company is also stepping up its marketing efforts and scaling its high-growth platforms, such as finishing salts and sugars, aiming to create new usage occasions and drive growth ahead of the holiday season.
"We have navigated similar consumer and competitive dynamics successfully in the past," Foley said. "With these actions under way, we expect consumption trends to continue improving."
Mc Cormick reported third-quarter sales of $2.02 billion, ahead of Wall Street estimates for $1.98 billion. Sales across the company's consumer segment were up 25%, or 1% on an organic basis, while sales across its flavor solutions segment were up 8%, or 3% on an organic basis. For its three months ended Aug. 31, the company notched net income of $97.6 million, or 36 cents a share, compared with $225.5 million, or 84 cents a share, a year earlier. On an adjusted basis, earnings came in at 86 cents a share, ahead of the 76 cents a share that analysts polled by Fact Set expected. Mc Cormick reaffirmed its outlook for the year and said it is continuing to work to combine with Unilever's food business, having made substantial progress on integration planning.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing