Dive Brief:
- McCormick reported a 3% increase in sales for the third quarter in its latest earnings report, and a 6% sales increase in constant currency, according to a company statement.
- Quarterly earnings per share rose to $1.00 from $0.76 in last year's third quarter. The company attributed the increase to a boost in operating income and a favorable tax rate.
- McCormick expanded its gross profit margin to 41.6% from 39.8%. Operating income also rose to $168 million compared to $139 million in the year-ago quarter.
Dive Insight:
McCormick investors are sure to be pleased, as these positive earnings results are somewhat unheard of these days in processed food companies. But McCormick also holds onto a corner of the processed foods market that most other companies haven't been able to successfully penetrate: seasonings and spices.
But even McCormick recognizes the importance of fresh foods and itself has expanded from the center store into retailers' perimeters with fresh but still packaged herbs. The company acquired the parent company of the Garden Gourmet brand of chilled herbs earlier this year, which enables McCormick to provide both freshness and convenience to consumers.
President and CEO Lawrence Kurzius expects this to be a record year for the company, he said in a statement. The company is aligning itself with consumers' demands for fresh and natural sources of flavors, from its recent acquisition to the announcement that the company would transition the majority of its products to non-GMO and organic by this year.