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McCormick & Co. reports surging sales and profits

McCormick & Co. reported Thursday that its sales and profits surged in its third quarter, which ended Aug. 31.

The Hunt Valley-based spice company earned $173.5 million in the June-to-August period on sales of nearly $1.35 billion. That’s up from a profit of $108.2 million on sales of nearly $1.19 billion a year earlier.

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On a per-share basis, it made $1.30 in the most recent quarter, up from 85 cents a year ago.

The sales growth was driven partly by its $4 billion acquisition last year of the food division of Reckitt Benkiser Group, which included the French’s mustard brand and Frank’s Red Hot sauce.

"McCormick's strong third quarter and year to date results reflect the successful execution of our strategies,” said Lawrence E. Kurzius, McCormick’s chairman, president and CEO, in a statement.

Kurzius in particular noted sales growth in its consumer and flavor solutions segments driven partly by incremental gains in the Frank's and French's portfolio.

“Consumer segment sales growth was also driven by both Americas and Asia/Pacific's base business and new products, with particular strength in the U.S. and China,” he said.

McCormick’s earnings adjusted for merger-related expenses, special charges and the benefit of federal tax reform came in at $170 million, or $1.28 a share, just ahead of analysts’ expectations.

“It was a decent quarter, in our view, with the integration of RB Foods on track and healthy sales growth in both its consumer and industrial segments,” wrote Brittany Weissman, an analyst with Edward Jones, which maintained its buy rating on McCormick stock. “One-year after the close of the RB Foods acquisition, the integration is on track with cost synergies ahead of expectations. We were pleased to see McCormick's underlying business once again show strength during the quarter. We remain positive on the solid long-term growth of the spice and seasoning categories.”

McCormick shares slipped 1.2 percent in Thursday trading, closing at $128.29 each. The company’s stock is up more than 25 percent so far this year.

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