Lawry's Acquisition Helped Boost McCormick's Earnings

First quarter earnings increased as the company added the spice maker and consumers chose to eat at home more often.
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On March 24, 2009,

McCormick & Company

(MKC) - Get Report

, a manufacturer, marketer, and distributor of spices, seasonings, and flavors, reported that its Q1 FY09 earnings increased 12.3%, helped by eat-at-home trends and the acquisition of spice maker Lawry's. Net income rose to $57.70 million or $0.44 per share compared to $51.40 million or $0.39 per share in Q1 FY08. Excluding the impact of restructuring activity, the company's earnings were up 7.2% to $58.00 million or $0.44 per share, which was in line with the most recent consensus estimate.

Revenue edged down marginally to $718.50 million from $724.00 million in the prior year's quarter, hurt by unfavorable foreign currency translation. However, on a local currency basis, revenue increased 7.0%. Consumer business sales grew 2.5% to $420.60 million from $410.50 million, driven by an 11.0% rise in consumer sales in the Americas. In local currency terms, sales grew 9.0%, attributable to 5.0% growth from higher volume and improved product mix and 8.0% from acquisitions. Industrial segment sales dropped 5.0% to $297.90 million from $313.50 million as sales from the EMEA and Americas regions dropped 21.0% and 1.0%, respectively. However, industrial sales in terms of local currency were up 5.0%, largely due to a 5.0% contribution from increased pricing and 2.0% benefit from acquisitions.

During Q1 FY09, the company's board appointed President and CEO, Alan D. Wilson, as Chairman, effective March 25, 2009, to succeed retired Robert J. Lawless.

Looking forward to FY09, McCormick reaffirmed its earnings guidance for a range of $2.24 per share to $2.28 per share, with expected sales growth set at the lower end of 2.0% to 4.0% over FY08 levels.