WASHINGTON (dpa-AFX) - Spices and seasonings maker McCormick & Co., Inc. (MKC) reported Thursday a profit for the third quarter that declined 21 percent from last year, reflecting lower gross margins and a sales decline.
Adjusted earnings per share missed analysts' expectations, while quarterly sales matched their estimates. The company also reaffirmed its adjusted earnings and revenue growth guidance range for the full-year 2015.
'McCormick's third quarter and year-to-date 2015 financial results reflect the effectiveness of our growth strategies and engagement of our employees. Through the third quarter we have grown sales 6% in constant currency,' Chairman, President and CEO Alan Wilson said.
The Sparks, Maryland-based company reported net income of $97.6 million or $0.76 per share for the third quarter, lower than $122.9 million or $0.94 per share in the prior-year quarter.
Excluding special charges, adjusted net income for the quarter was $109.7 million or $0.85 per share, compared to $124.5 million or $0.95 per share in the year-ago quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.87 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 1.6 percent to $1.06 billion from $1.04 billion in the same quarter last year, and matched seven Wall Street analysts' consensus estimate of $1.06 billion.
Sales rose 7.3 percent in local currency with strong increases in both business segments.
'Both our consumer and industrial businesses are delivering mid-single digit constant currency sales increases, driven by innovation, effective brand marketing support, expanded distribution and customer intimacy,' Wilson stated.
McCormick's consumer business sales increased 1.4 percent or 6.9 percent in constant currency, to $630.5 million, and industrial business sales grew 2.0 percent or 8.0 percent in constant currency, to $429.4 million from last year.
'In addition to this strong growth in our base business, we have completed three acquisitions that are excellent additions to our global portfolio of flavors,' Wilson added.
Gross profit for the quarter was $421.9 million, up from $420.1 million in the year-ago quarter, while gross margin percentage contracted 50 basis points to 39.8 percent from last year's 40.3 percent.
Looking ahead to fiscal 2015, McCormick continues to expect adjusted earnings in a range of $3.47 to $3.54 per share, but at the lower end, and constant currency sales growth of 4 to 6 percent, but at the higher end. Street is currently looking for full-year 2015 earnings of $3.52 per share on annual sales growth of 0.9 percent to $4.28 billion.
MKC closed Wednesday's regular trading session at $82.18, up $0.35 on a volume of 1.28 million shares. In the past 52-week period, the stock has been trading in a range of $65.44 to $85.30.
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