McCormick & Co. Inc. saw increases in third-quarter sales and profits, led by greater demand from consumers in China and growth in Europe, the Middle East and Africa, the Sparks-based spice maker said Thursday.
Income jumped 18 percent to $122.9 million, or 94 cents per share, in the three months ending Aug. 31, compared with $104.4 million, or 78 cents per share, a year earlier, helped by a lower tax rate. McCormick's sales rose 3 percent to $1.04 billion, the company said.
The results sent shares of McCormick up nearly 3 percent on the New York Stock Exchange to close at $67.50 each.
In the U.S. consumer market, where the company has been struggling amid increased competition, sales slipped 1 percent. But that's an improvement, the company said, and new strategies are helping to boost sales of grilling products and recipe mixes.
"We are making steady progress with growth initiatives to build our brand equity and category leadership in a competitive environment," said Alan D. Wilson, McCormick's chairman, president and CEO, during a conference call Thursday with analysts. "We continue to be encouraged by the growing consumer demand for flavor in markets around the world."
McCormick's business has been helped by several trends, Wilson said during the conference call. The rise of millennial consumers, who are more interested in cooking than baby boomers and use social media to share recipes, is helping to boost sales, combined with an increased desire for healthier eating options and a rising middle class in emerging markets.
The spice maker plans to introduce new products, including Skillet Sauces and Freshlock herbs, and early next year will relaunch its premium gourmet line in the United States. The company plans to boost marketing by at least 15 percent for the upcoming holiday season, compared with last year's fourth quarter.
Industrial sales to food suppliers and manufacturers grew 4 percent, driven by increases in snack seasonings in the Americas, the company reported.
McCormick said it continues to expect sales growth of 3 percent to 5 percent this year and raised expectations for earnings per share for the year to a range of $3.30 to $3.37.