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McCormick Posts Q1 2011 Financial Results
Posted: March 29, 2011
McCormick & Company (Sparks, Maryland) reported its first quarter financial results for fiscal year 2011, noting increased earnings per share of 12%, with its comprehensive continuous improvement program’s (CCI) cost savings set to exceed $40 million this year and earnings per share expected to be $2.80–2.85.
McCormick & Company’s chairman, president and CEO Alan D. Wilson commented, "We are operating effectively in a tough environment as demonstrated by our first quarter results. In response to a significant increase in raw and packaging material costs, we now have pricing actions in place on a majority of our products. As an additional offset to these cost increases, employees throughout McCormick are engaged in our Comprehensive Continuous Improvement program. While conditions in Europe continue to challenge our consumer business in that region, we are growing sales in our other regions with product innovation, new distribution and brand marketing support. Product innovation and new distribution are also driving sales for our industrial business. Across both businesses, we have a growing presence in emerging markets and had particularly strong results in Mexico and China this quarter. Through our joint ventures we are gaining further access to emerging markets and reported a significant increase in profit from these businesses early in 2011."
McCormick & Company's first quarter sales rose 2% and increased 3% in local currency, largely as a result of pricing actions taken in response to increased raw and packaging material costs. Volume and product mix was comparable to the prior year period. For consumer business, volume and product mix declined 2% as increases from product introductions, brand marketing support and new distribution in the Americas and Asia/Pacific region were more than offset by weakness in the Europe, Middle East and Africa region (EMEA) and the estimated impact of a shift in sales from the first quarter of 2011 to the fourth quarter of 2010. As indicated in the announcement of fourth quarter 2010 results, this shift in sales was estimated to be $10 million and was largely the result of U.S. customer purchases in advance of a late 2010 price increase. For the industrial business, increased customer demand in the Americas and EMEA regions included new products and drove a 3% increase in volume and product mix.