WASHINGTON (dpa-AFX) - McCormick & Company Inc. (MKC) said it expects to grow sales 4% to 6% in constant currency in 2016, driven by base business increases, new products, pricing and acquisitions completed in 2015 that should add 1% to 2% of sales growth. Including the estimated impact of unfavorable currency rates, projected sales growth is 0% to 2%.
It projects 2016 earnings per share to be in the range of $3.62 to $3.69. Excluding the impact of an estimated $7 million of special charges, adjusted earnings per share is expected to be in the range of $3.65 to $3.72. From adjusted earnings per share of $3.48 in 2015, this is an increase of 5% to 7%. Excluding the estimated impact of currency rates, the projected growth rate in adjusted earnings per share is 9% to 11%. Analysts polled by Thomson Reuters expect the company to report earnings of $3.73 per share for fiscal year 2016. Analysts' estimates typically exclude special items.
The company plans to achieve at least $95 million of cost savings to improve margins and fuel an increase in brand marketing of approximately $20 million. Operating income for 2016 is expected to grow 16% to 19% from $548 million of operating income in 2015. Excluding the impact of foreign currency, the projected year to year increase in adjusted operating income is 9% to 11%.
Earnings per share in the first quarter of 2016 are expected to be down slightly from $0.70 of adjusted earnings per share in the first quarter of 2016, mainly as the result of unfavorable currency exchange rates, a planned increase in brand marketing and a higher tax rate.
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