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McCormick & Company Inc. Reports Operating Results (10-Q)

July 02, 2012 | About:
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10qk

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McCormick & Company Inc. (MKC) filed Quarterly Report for the period ended 2012-05-31.

Mccormick & Company, Incorporated has a market cap of $8.04 billion; its shares were traded at around $60.82 with a P/E ratio of 21.1 and P/S ratio of 2.2. The dividend yield of Mccormick & Company, Incorporated stocks is 2%. Mccormick & Company, Incorporated had an annual average earning growth of 7.4% over the past 10 years. GuruFocus rated Mccormick & Company, Incorporated the business predictability rank of 5-star.

Highlight of Business Operations:

The sales increase of 11.3% for the second quarter of 2012 included a 5.7% increase due to acquisitions and a 1.5% unfavorable impact from foreign currency exchange rates. Excluding acquisitions and the foreign currency impact, we grew sales 7.1%. This was the result of pricing actions, which added 5.0% to net sales, taken in response to increased raw and packaging material costs and higher volume and product mix of 2.1%, when compared to the prior year period. For the consumer business, sales rose 14.0%, which included a 1.3% unfavorable impact from foreign exchange rates. Acquisitions completed in 2011 accounted for 10.1% of the increase and the remaining increase was largely due to pricing actions. For the industrial business, net sales rose 7.9%, which included a 1.6% unfavorable impact from foreign exchange rates. Approximately two-thirds of the industrial sales increase was from higher volume and product mix and one-third was the result of pricing actions.

The 14.0% increase in sales in the second quarter of 2012 as compared to the second quarter of 2011 included a favorable impact of 10.1% from acquisitions and 1.3% unfavorable impact from foreign currency rates. Excluding acquisitions and the foreign currency impact, we grew sales 5.2%, with increased pricing of 4.4% and higher volume and product mix of 0.8%.

In the Americas, sales increased 6.2% in the second quarter of 2012, compared to the second quarter of 2011, including a 1.1% increase from the Kitchen Basics acquisition and a 0.4% decrease due to unfavorable foreign exchange rates. Excluding the Kitchen Basics acquisition and foreign exchange impact, we grew sales 5.5%. Sales rose 5.4% this period as a result of our pricing actions taken in the fourth quarter of 2011. During this period volume and product mix was about even with the second quarter of 2011. This was an improvement from the first quarter of 2012 when we reported a 1.4% decline in volume and product mix in the period immediately following our pricing action.

In the Asia/Pacific region, sales increased 66.2% in the second quarter of 2012, compared to the second quarter of 2011, with a 58.8% increase from the Kohinoor acquisition and a 2.5% increase coming from favorable foreign exchange rates. Excluding the acquisition and foreign currency impact, we grew sales 4.9% with 4.4% from pricing actions and higher volume and product mix adding 0.5%. Our business in the Asia/Pacific region tends to have more quarter-to-quarter variability due in part to the timing of holiday seasons and marketing programs. We had very strong performance in the first quarter of 2012 with consumer sales in this region up 20.7%, excluding the impact of Kohinoor and foreign currency. On this basis, sales for the first half of 2012 increased 12.5% with strong results in both China and Australia.

In the Asia/Pacific region, industrial sales increased 2.6% in the second quarter of 2012 compared to the second quarter of 2011, which included a favorable foreign exchange rate impact of 1.9%. Excluding this impact of foreign currency, sales increased 0.7%. Our industrial Asia/Pacific business has some quarter-to-quarter variability due in part to customer promotional activity and new product roll-outs. In local currency, when compared to the prior year, we grew sales 22.4% in the first quarter of 2012, followed by a 0.7% increase in the second quarter of 2012. Also in local currency, sales for the six months ended May 31, 2012 were up 10.4% with increases in China and in Australia of sales to our multi-national customers, including quick service restaurants that continue to expand in this region.

Read the The complete Report

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