Tuesday, March 28, 2017

Earnings - McCormick(MKC)

This AM we received earnings from McCormick(MKC) a global leader in flavor. For Q1'17 EPS came in at $0.74 on revenues of $1.043 billion.  A bright spot was operating earnings were up 3.8% to $134 million despite weaker EPS and top-line growth.  The company continues to do a great job maintaining costs and currency headwinds. The stock has seemed to meander around the last few months.  That's fine as it was a nice winner for us in 2016. I expect the stock to get back on track come summer.  Here is what management had to say:

Lawrence E. Kurzius, Chairman, President and CEO, stated, "Our first quarter financial results were a solid start to the year delivering profit results in line with our expectations. Sales in our consumer segment were up from the year ago period, with strong momentum in China and the benefit of acquisitions, partially offset by the impact of a challenging retail environment in the U.K. Our industrial business delivered solid sales growth driven by our foodservice brands and customized flavors in the Americas and demand from quick service restaurants in the Asia/Pacific region. Both segments achieved an increase in operating income and higher operating income margins.

"Taste continues to rank #1 in deciding what consumers choose to eat. We are aligned with today's move toward more flavorful, healthy food and are confident in our plans to drive growth through brand marketing, innovation across both our consumer and industrial segments, and opportunities to expand distribution. We are balancing our resources and efforts to drive sales with our work to lower costs, and are on-track to achieve approximately $100 million in 2017 in cost savings led by our Comprehensive Continuous Improvement (CCI) program.

"Around the world, McCormick employees are driving momentum and I thank them for their efforts and engagement. With our steadfast focus on growth, performance and people, we are well-positioned to deliver strong financial results and shareholder return in 2017."

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