Dive Brief:
- Q1 2015 sales for McCormick & Company, Incorporated rose 2% over the first quarter of 2015, and disregarding unfavorable currency conditions, sales grew 6% with constant currency.
- While sales grew, operating income took a hit due to special charges, unfavorable currency rates, and higher material costs. Additionally, profit fell 15%.
- In terms of its 2015 outlook, McCormick maintains confidence in constant currency growth in sales, at an estimated 4% to 6% and adjusted operating income, at 6% to 7%. The company also increased its outlook for special charges from $20 million to $30 million for the year, though it cut its earnings per share and adjusted earnings per share outlook.
Dive Insight:
The Wall Street Journal reported, "For the year ending in November, McCormick expects currency fluctuations will take a bigger bite from its overall sales outlook than previously anticipated and now predicts a negative effect of five percentage points, compared with previous estimate of three percentage points."
Part of McCormick's strategy in the past few months has been two acquisitions: natural, savory flavorings company Brand Aromatics and the announced agreement to purchase Italian spice company Drogheria & Alimentari. McCormick chairman and CEO Alan D. Wilson said in a press release that Brand Aromatics "adds great capabilities to our industrial business" and D&A "complements McCormick's strong brands across Europe."