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McCormick & Company Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 1, 2010 06:08AM
McCormick & Company Inc. (MKC) filed Quarterly Report for the period ended 2010-08-31.
Highlight of Business Operations:
Increasing Sales and Profits With the investments in our business, our long-term goals are to grow sales 4 to 6% and increase earnings per share 9 to 11% on an annual basis. In 2010, earnings per share are expected to grow 9 to 11% on a comparable basis. In 2010, because there are no incremental sales from acquisitions, net sales are expected to grow 2 to 4% in local currency. In addition to increased sales and profit, our business generates strong cash flow. We are building shareholder return with consistent dividend payments and a resumption of our share repurchase program. We have paid dividends every year since 1925 and increased the dividend in each of the past 24 years.
For the nine months ended August 31, 2010, the sales increase of 4.0% versus the same period last year includes 2.3% from the favorable impact of foreign currency. The 1.7% increase excluding the foreign currency impact was due to favorable volumes and product mix of 2.0%, partially offset by lower pricing of 0.3%.
In the Americas, sales increased 3.7% in the third quarter of 2010, compared to the third quarter of 2009, including a 0.6% increase due to favorable foreign exchange rates. Excluding the foreign exchange impact, we grew sales 3.1%, with 1.7% through higher volume and product mix and 1.4% due to pricing.
Third quarter 2010 sales in EMEA (Europe, Middle East and Africa region) decreased 10.2% compared to the third quarter of 2009, with unfavorable foreign currency rates accounting for 9.1%. Excluding the impact from favorable foreign exchange rates, sales decreased 1.1%, with 1.7% due to lower volume and unfavorable product mix, partially offset by an increase of 0.6% from pricing actions.
In the Asia/Pacific region, sales increased 10.7% in the third quarter of 2010, compared to the third quarter of 2009, with a 3.6% increase coming from favorable foreign exchange rates. Excluding the foreign currency impact, we grew sales 7.1% with 1.7% coming from higher volume and product mix and pricing adding 5.4%. We grew volume and product mix in China through new products like Thai chili sauce, as well as better market penetration and increased consumer demand. Sales in this market were up 15%.
For the nine months ended August 31, 2010, the total consumer business sales increase of 4.1% includes 1.8% from favorable foreign exchange rates. The remaining 2.3% was mainly driven by favorable volume and product mix of 1.6%. Pricing actions added 0.7% to sales.
Stocks Discussed: MKC,