McCormick and Co. Inc. reported strong second-quarter results Thursday that beat analysts' expectations, as new products and expanded distribution helped boost sales 5 percent.

The Sparks-based spice and flavorings maker said sales increased to $1.11 billion for the three months that ended May 31.


McCormick's profit rose to $100 million, or 79 cents per share, compared with $93.8 million, or 73 cents per share, in the second quarter of 2016. Wall Street expected earnings of 77 cents per share, according to Zacks Investment Research.

Despite the stronger-than-expected performance, McCormick's shares skidded nearly 3.5 percent in Thursday trading to close at $95.36 each amid the broader market decline.

"We are continuing to capitalize on the global and growing consumer interest in healthy, flavorful eating, the source and quality of ingredients and sustainable and socially responsible practices," Lawrence E. Kurzius, McCormick's chairman, president and CEO, said in an announcement Thursday.

When adjusted for currency fluctuations, the company's sales rose 7 percent, with increases in both the consumer business, or sales of products to retailers, and industrial segment, or sales of flavorings to food manufacturers.

The results showed the company's sales and profit growth strategies are working, Kurzius said.

The 2 percent growth on the consumer side came from both existing and new products, including grilling products such as dry and wet recipe mixes and barbecue sauces, with "solid performance" in the United States and strong momentum in China, Kurzius said. Business remains challenging, however, in Europe, the Middle East and Africa, partly because of a weak retail environment in the United Kingdom, he said.

The company also added products and expanded its distribution to industrial customers, he said.

Acquisitions of Giotti in December and Gourmet Garden in April 2016 also contributed to higher sales.

McCormick plans an aggressive rollout of new products in the second half of the year, Kurzius said during a conference call with analysts, including moving into the breakfast category with breakfast spice blends, oatmeal seasoning mixes, "Breakfast Toppers" and "Smoothie Boost," as well as new flavors of broth and gravy in the Simply Asia, Simply Better and Kitchen Basics lines.

While private-label spices are continuing to gain market share, Kurzius said, "we're a supplier to private labels and participate in that growth as well."

The CEO also noted that Amazon's planned acquisition of Whole Foods should be beneficial to McCormick, which sells products through Amazon but is "under-represented" in Whole Foods.

"This probably has more opportunity for us than risk, and we are well positioned based on our relationship with Amazon," he said.

The company adjusted its financial outlook to reflect less impact from foreign currency on sales and a greater impact from special charges. Sales are expected to grow between 4 percent and 6 percent this year.

McCormick is on track to reach at least $100 million in cost savings this year, the company said.