McCormick Profits Rise

NEW YORK - Mar 25/10 - SNS -- McCormick & Company reported net income of U.S. $67.9 million on sales of $764.5 million for the first quarter ending February 28.

This compares to net income of $57.7 million on sales of $718.5 million during the same three month period last year.

Alan D. Wilson, Chairman, President and CEO, said the company benefitted from a change in North American eating habits on account of the current economic slowdown.

"Today we find more consumers eating at home," he said, "(w)hile our industrial business continues to be impacted by weakness in away-from-home eating."

In the first quarter of 2010, sales grew 6%, and in local currency rose 2%. Consumer sales in the Americas rose 5% and in local currency grew 3%. Incremental marketing support led to higher volume and product mix in this region with particular strength in herbs and spices, extracts, convenient dry seasoning mixes and Zatarain's brand items. In the first quarter, McCormick gained strong retail distribution of its Recipe Inspirations, a recent product innovation.

Consumer sales in EMEA rose 13% and in local currency grew 3% with favorable pricing and an increase in volume and product mix driven in part by increased brand marketing. Sales growth was achieved across a broad array of product categories in the U.K., as well as in France, led by increased sales of Vahiné brand homemade dessert products.

First quarter sales in the Asia/Pacific region rose 20% and in local currency grew 6% driven by a double-digit increase in volume and product mix in China.

Industrial business sales rose 4% when compared to the first quarter of 2009. In local currency sales declined 1%.

Industrial sales in the Americas rose 1% and in local currency declined 1%. In response to lower commodity costs, McCormick passed through reduced pricing for certain products during this period. While sales rose with the introduction of new flavors in the U.S. and Mexico, sales were also impacted by weakness in the restaurant industry during the first quarter of 2010.

In EMEA, industrial sales rose 15%, and in local currency increased 1%. Sales to quick service restaurants in this region were strong in the first quarter. However, sales of branded products to food service customers in the U.K. continued to be affected by the bankruptcy of a major distributor that occurred in the second quarter of 2009.

In the Asia/Pacific region, sales rose 11% and in local currency grew 1%. The benefit of improving quick service restaurant traffic in China was largely offset by a reduction in bulk ingredient sales during this period.

The favorable business mix and productivity improvements achieved in 2009, continued into the first quarter of 2010 with industrial business operating income up 34% compared to the year-ago period.

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