Dive Brief:
- McCormick & Company, Inc. posted a 1% increase in sales for its 2017 fiscal first quarter, and reported constant currency sales of 4%, according to its most recent earnings report.
- The company’s income increased to $93.5 million, or 74 cents per share, compared with $93.4 million, or 73 cents per share for the same period last year. Operating income for the first quarter was $134 million, compared to $129 million in the year-ago period.
- "Taste continues to rank #1 in deciding what consumers choose to eat," said Lawrence Kurzius, McCormick's president and CEO. "We are aligned with today's move toward more flavorful, healthy food and are confident in our plans to drive growth through brand marketing, innovation across both our consumer and industrial segments, and opportunities to expand distribution."
Dive Insight:
Coming off a record earnings report to end 2016, McCormick’s didn't miss a beat in its first quarter. Kurzius said strong momentum in China and growth in the company’s consumer segment helped offset a challenging retail environment in the United Kingdom. “Our industrial business delivered solid sales growth driven by our foodservice brands and customized flavors in the Americas and demand from quick service restaurants in the Asia/Pacific region,” he said.
The spice and flavor maker is ideally positioned to capture the public's growing interest in eating healthier while at the same time not sacrificing flavor in many of their favorite foods. It's also been expanding its line of gluten-free, non-GMO and other organic items to take advantage of consumer demand for those products. McCormick has added to its existing business line with acquisitions, Gourmet Garden in April 2016, Cajun Injector last September and Italy's Enrico Giotti announced in November. The deals appear to be sound moves for the company by expanding its reach into other regions and flavors.
In 2017, McCormick is working to achieve nearly $100 million in cost savings as part of its Comprehensive Continuous Improvement program, which is designed to drive sales and lower costs. With the company expecting sales to increase between 3% and 5% in its current fiscal year, it looks like the spice giant is on track to continue its recent strong performance.