McCormick & Company Inc. (MKC) filed Quarterly Report for the period ended 2009-08-31.
McCormick & Company a diversified specialty food company is a globalleader in the manufacture marketing and distribution of spices herbsseasonings flavorings and other specialty food products to the entire foodindustry. The company also through subsidiary corporations manufactures and markets specialty plastic bottles and tubes for food personal care and other industries. The company operates in three business segments: consumer; industrial; and packaging. Mccormick & Company Inc. has a market cap of $4.38 billion; its shares were traded at around $33.54 with a P/E ratio of 14.8 and P/S ratio of 1.4. The dividend yield of Mccormick & Company Inc. stocks is 2.9%. Mccormick & Company Inc. had an annual average earning growth of 10.1% over the past 10 years. GuruFocus rated Mccormick & Company Inc. the business predictability rank of 5-star.
Highlight of Business Operations:
For the nine months ended August 31, 2009, the sales decrease of 0.1% versus the same period last year includes 7.1% from the unfavorable impact of foreign currency. The 7.0% increase excluding the foreign currency impact was due to pricing actions, along with favorable product mix and higher volumes, including a 4.7% increase from acquisitions.
In the Americas, sales increased 7.8% in the third quarter of 2009, compared to the third quarter of 2008, including a 1.0% decrease due to unfavorable foreign exchange rates. Excluding the foreign exchange impact, we grew sales 8.8%. Volume and product mix added 5.9%, while pricing contributed 2.9% to sales growth. Pricing this quarter reflected a general increase taken early in 2009 which was partially offset by an increase in our coupon activity in the third quarter.
Third quarter 2009 sales in EMEA decreased 12.6% compared to the third quarter of 2008. Excluding the impact of unfavorable foreign exchange rates, sales decreased 2.6%. Pricing actions taken in the fourth quarter of 2008 added 1.3% to third quarter sales while volume and product mix declined 3.9%.
In the Asia/Pacific region, sales decreased 3.9% in the third quarter of 2009, compared to the third quarter of 2008, with an 8.5% decrease coming from unfavorable foreign exchange rates. Excluding the foreign currency impact, we grew sales 4.6% with pricing adding 2.3% and an increase of 2.3% coming from higher volume and product mix. As noted in the second quarter, in China
For the nine months ended August 31, 2009, sales from McCormick’s consumer business increased 2.8% compared to the same period last year. Higher volume (including acquisitions), price and product mix added 8.7%, while unfavorable foreign exchange rates decreased sales by 5.9%.
Third quarter 2009 operating income excluding restructuring charges for our consumer business increased $13.9 million, or 18.5%. This was well above the 1.7% increase in sales due to improved margins from cost reductions, the integration of Lawry’s with minimal incremental expense and reductions in benefits expense. These improvements have raised our operating income margin to 19.8%.
MKC is in the portfolios of Mark Hillman of Hillman Capital Management, Brian Rogers of T Rowe Price Equity Income Fund.
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