WASHINGTON (dpa-AFX) - While reporting third-quarter results on Thursday, McCormick & Company, Incorporated (MKC) said the company is narrowing its full year sales outlook to the high-end of previous range. Also, the company has lowered its adjusted operating income outlook as there remains a degree of uncertainty in the cost environment.
Excluding the impact of transaction and integration expenses as well as special charges, fiscal 2021 adjusted operating income is expected to grow by 6% to 8%, which in constant currency is 4% to 6%. This is compared to the previous projection of 10% to 12%, or 8% to 10% in constant currency and primarily reflects higher inflation and industry-wide logistics challenges. The company now projects 2021 adjusted earnings per share to be in the range of $2.97 to $3.02, revised from previous guidance of $3.00 to $3.05. Analysts polled by Thomson Reuters expect the company to report profit per share of $3.02. Analysts' estimates typically exclude special items. McCormick increased its projected 2021 earnings per share to be in the range of $2.80 to $2.85.
For 2021, the company now expects to grow sales by 12% to 13%, which in constant currency is 9% to 10% and includes the incremental impact of the Cholula and FONA acquisitions. This is at the high-end of the prior guidance of 11% to 13%, or 8% to 10% in constant currency.
Third quarter adjusted operating income was $272 million compared to $273 million, last year. In constant currency, adjusted operating income declined 3%. The company said the favorable impact of higher sales and CCI-led cost savings was more than offset by gross margin compression and higher brand marketing investments.
Third quarter adjusted earnings per share was $0.80 compared to $0.76, last year. On average, ten analysts polled by Thomson Reuters expected the company to report profit per share of $0.72, for the quarter. Adjusted earnings per share was up 5% driven by higher sales and a lower adjusted income tax rate, partially offset by higher cost inflation.
Reported earnings per share was $0.79 compared to $0.76. Net income increased to $212.4 million from $206.1 million.
Net sales increased to $1.55 billion from $1.43 billion, previous year. Analysts expected revenue of $1.54 billion, for the quarter. The 8% sales increase included a 3% favorable impact from currency. In constant currency, sales were up 5%.
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