McCormick (MKC) on Tuesday narrowed its sales guidance for the full year while raising its earnings outlook after posting better-than-expected earnings for its fiscal third quarter.
The Hunt Valley, Md.-based spice company said it now expects sales to grow this year 1% to 2%, down from its June guidance for 1% to 3% growth. It expects per-share earnings between $5.20 and $5.25, up from $5.09 to $5.19 previously. The consensus compiled by Capital IQ is for EPS of $5.31.
McCormick said adjusted EPS rose to $1.46 in the quarter ended Aug. 31 from $1.28 in the prior-year period and ahead of the Street’s view for $1.29. Sales rose to $1.33 billion from $1.32 billion last year, below the Street’s consensus for $1.34 billion.
“Our strong third quarter and year to date reflect the successful execution of our strategies,” said Chief Executive Lawrence Kurzius. “We delivered strong sales and operating growth while also making investments for the future.”
Sales in the company’s consumer segment rose to $794.2 million in the just-ended quarter from $772.4 million last year. Sales in the Americas region rose 4% on higher volume and product mix. Asia Pacific sales surged 11% on pricing increases as well as higher volume and product mix. The earlier timing of a national holiday in China also contributed to the gain, McCormick said.
Europe, Middle East and Africa sales fell 6%, pressured by hot weather across Europe, lower private-label sales and unfavorable pricing.
Sales in McCormick’s flavor segment slid to $535 million from $545.8 million. The company said sales in the Americas slid 2% as growth was hurt by warehouse transition movies and promotions. EMEA sales also fell 2% and Asia Pacific ended 4% lower.
Cost of sales slid to $789.3 million from $795.7 million while selling, general and administrative expenses edged lower to $278.7 million from $283.7 million.