slashed second-half earnings guidance, citing weak industrial seasoning sales and the effects of Hurricane Katrina.
The Sparks, Md., spice company said it will undertake a cost-cutting plan aimed at improving its supply chain operations. The company said the moves will include plant closings and "administrative redundancies," though it didn't specify how many facilities will close or how many workers might be affected.
McCormick said it would take pretax charges of roughly $115 million to cover the moves, which should lead to annual pretax savings of around $30 million to $45 million. McCormick said it would announce substantive plans at year-end.
In the meantime, the company expects to make around 34 cents a share for the third quarter and $1.60 for the year, which is below the $1.68-a-share guidance the company has previously offered.
"I am not satisfied with this year's financial performance," CEO Robert Lawless said. "In the past we have been able to overcome obstacles and drive growth with the strength of our new products and marketing programs as well as cost reductions and expense controls. Although we continue to experience success in these areas, our growth in 2005 has been limited by issues including vanilla, sales to industrial customers and hurricane Katrina."
Late Tuesday, McCormick shares fell 86 cents to $32.35.