Flavours company McCormick has recorded jubilant second-quarter figures, reflecting the integration of former Reckitt Benckiser brands like French’s mustard.
The company saw sales rise by 19% compared to the same period last year – the same rate of growth that it announced in its first-quarter sales earlier in the year. This amounted to total net sales for the quarter of $1.33 billion, while operating income rose from $132.6 million to $191.7 million – a jump of about 44.5%.
Much of the growth was derived from former RB Brands like French’s and Frank’s RedHot Sauce, following McCormick’s acquisition of RB Foods in August 2017.
Indeed, McCormick CEO Lawrence E. Kurzius said that growth in both McCormick’s consumer and flavour solutions segments was led by incremental sales from within the Frank’s and French’s portfolios.
The figures are strong enough that McCormick has beaten analysts’ pre-release predictions, providing enough substance to reaffirm its full-year guidance.
Kurzius said: “McCormick’s strong second quarter and year-to-date results reflect the successful execution of our strategies. We delivered double-digit sales, adjusted operating income and adjusted earnings per share growth as well as significant operating margin expansion.
“Both our consumer and flavour solutions segments contributed to our constant currency sales growth of 16%. Growth in both segments was led by incremental sales from the Frank’s and French’s portfolio. Consumer segment sales growth was also driven by both Americas and Asia/Pacific base business and new products, with particular strength in China. Our additional flavour solutions segment growth was driven by increased base business and new product sales in flavors as well as broad-based branded foodservice growth in the Americas region. Across both of our segments, the solid growth from our core business and the performance of Frank’s and French’s were in line with our plans and we are pleased with our momentum entering the second half of the year.
McCormick completed the acquisition of Reckitt Benckiser’s food unit in August 2017
Kurzius continued: “McCormick is a global leader in flavour with a broad and advantaged global portfolio which continues to grow and position us to fully meet the demand for flavour around the world. All over the world, people desire great tasting foods and drinks with rich, authentic flavour. And we deliver flavour across all markets and through all channels. We are focused on growth, delivering against our objectives, strengthening our organisation and building the McCormick of the future. Through the execution of our strategies, we are becoming even better positioned to drive future growth and are confident in our continued success. We are balancing our resources and efforts to drive sales with our work to lower costs led by our Comprehensive Continuous Improvement (CCI) programme.
“I want to recognise McCormick employees around the world for their efforts and engagement. With our vision to bring the joy of flavour to life and our steadfast focus on growth, performance, and people, we are confident in our continuing momentum for growth in 2018 to deliver strong financial results and build value for our shareholders.”
In March, following the publication of its first-quarter results, McCormick celebrated the strong integration of the former RB food brands by accelerating hourly wage increases and reinvesting some of the benefits from its reduced tax burden – a consequence of the Tax Cuts and Jobs Act – into a one-time bonus of $1,000 for eligible US hourly employees.
As well as charting handsomely on its recent financial releases, McCormick has also been praised for its performance on diversity: last month, the business joined Kellogg, Hershey and Monsanto in DiversityInc’s list of the most diverse companies.
The ranking is scored against a number of criteria, including representation of different races, ethnicities, genders and sexualities – as well as initiatives to hire and retain employees with disabilities, veterans, or people from minority backgrounds.
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