McCormick & Co., Inc. (Sparks, Maryland) has reported second quarter sales of $ 984 million, a year-over-year gain of 11% driven by acquisitions, price increases, and increased volume and product mix.
Highlights from the results:
- The company reported cash flow from operations of $144 million for the first half of 2012.
- In local currency, acquisitions completed in 2011 added about half of this increase, while pricing actions taken in response to higher material costs and volume and product mix also contributed to the increase.
- Operating income rose 11% to $121 million from $109 million in the second quarter of 2011.
- The favorable impact of higher sales and cost savings offset increased material costs and a $4 million increase in brand marketing support.
"In a difficult economic environment, McCormick is delivering financial results that demonstrate the strength of our brands and our customer relationships in markets around the world," said Alan Wilson, chairman, president and CEO of the company. "Acquisitions, new products, marketing programs and expanded distribution are driving sales growth in each geographic region, with particular strength in emerging markets which accounted for 14% of second quarter sales.
"Across all of our businesses, we continue to face volatile material costs," Wilson continued. "As reflected in our gross profit margin, which was comparable with the second quarter of 2011, our pricing actions and cost savings ... are effectively offsetting the impact of higher material costs. [W]e increased our brand marketing support by 15%. This increase, along with product innovation and other initiatives to grow sales, have created momentum as we head into the second half of 2012."