SPARKS, Md., March 29, 2016 /PRNewswire/ -- McCormick & Company, Incorporated, a global leader in flavor, today reported financial results for the first quarter ended February 29, 2016 and provided its latest financial outlook for fiscal year 2016.
- Sales rose 2% in the first quarter from the year-ago period. In constant currency, which excludes the unfavorable impact of foreign currency, the company grew sales 7%, with strong increases in both its consumer and industrial segments.
- Earnings per share was $0.73 in the first quarter of 2016. Excluding the impact of special charges, adjusted earnings per share was $0.74 compared to $0.70 adjusted earnings per share in the first quarter of 2015. This increase was mainly due to higher sales and improved gross profit margin.
- For the 2016 fiscal year, the company adjusted its financial outlook as it now expects a lower impact from unfavorable foreign currency exchange rates. Excluding this impact, the company reaffirmed its expected growth rate for sales, adjusted operating income and adjusted earnings per share.
First Quarter 2016 Results
McCormick reported a 2% sales increase in the first quarter from the year-ago period, and in constant currency, grew sales 7%. In constant currency, consumer segment sales rose 6%, with higher volume and product mix driven by product innovation, brand marketing support and expanded distribution, as well as pricing actions and the impact of acquisitions completed in 2015. The growth was broad-based with a constant currency sales increase in each region and particular strength in China this period. In constant currency, the company grew industrial segment sales 7% mainly from higher volume and product mix, with the additional benefit of the Brand Aromatics acquisition completed in 2015 and pricing actions to offset higher material costs. The increase in volume and product mix was led by the Europe, Middle East and Africa (EMEA) region which drove product innovation, increased distribution and geographic expansion.
Operating income was $129 million in the first quarter compared to $94 million in the year-ago period. The company recorded$2 million of special charges in the first quarter of 2016 related to previously announced organization and streamlining actions. Excluding special charges, adjusted operating income was $131 million compared to $122 million of adjusted operating income in the year-ago period. In constant currency, adjusted operating income rose 12%, with the favorable impact of higher sales and cost savings more than offsetting higher material input costs and increased employee benefits expense.
Earnings per share was $0.73 in the first quarter compared to $0.55 in the year-ago period. Excluding the $0.01 and $0.15impact of special charges in the first quarter of 2016 and 2015, respectively, adjusted earnings per share was $0.74 compared to$0.70 in the year-ago period. This 6% increase included the impact of unfavorable foreign currency exchange rates and was mainly due to the increase in adjusted operating income.
The company continues to generate strong cash flow and net cash provided by operating activities for the first quarter of 2016 was $78 million compared to $96 million in the first quarter of 2015, with the decrease mainly related to the timing of payments for raw material purchases. Full report.
