Shares of McCormick & Co., Inc. MKC reached a 52-week high of $78.11 on Mar 30, 2015 after the company reported strong first quarter fiscal 2015 results on Mar 24. Shares of this global leader in flavors and spices also got a boost with the announcement of a new share repurchase program on Mar 25. Shares of McCormick eventually closed at $78.02 on Monday, amassing a year-to-date return of 5.5%.
First Quarter Earnings
McCormick delivered better-than-expected earnings and revenues in the first quarter of fiscal 2015, despite difficult retail and competitive conditions in many markets.
Adjusted earnings of 70 cents per share increased 13% driven by top-line growth, higher income from unconsolidated operations and a lower tax rate. First-quarter revenues of $1.01 billion also grew about 2% year over year. Excluding currency headwinds, revenues grew 6%, driven by strong increases in both business segments.
On a constant currency basis, adjusted operating income grew 1% from the year-ago period, driven by sales growth and cost savings, offset in part by the unfavorable impact of higher material input costs and increased retirement benefit expense. In fact, the company expects a more favorable operating income scenario over the near term, owing to pricing actions and increase in cost savings. (Read: McCormick Beats Earnings Estimates in Q1 on Higher Sales).
Share Repurchase Program
On Mar 25, McCormick’s board also authorized a new share repurchase program to purchase $600 million of its outstanding shares. In 2015, the company expects to complete the current $400 million share repurchase program, which was authorized in Apr 2013. Besides share repurchase, the company also regularly pays dividends. The company has also increased dividends in each of the past 29 years.
McCormick has a Zacks Rank #3 (Hold).
Other players worth considering in the food industry include Tyson Foods, Inc. TSN, Flower Foods, Inc. FLO and Supervalu, Inc. SVU. While Tyson sports a Zacks Rank #1 (Strong Buy), Flower Foods and Supervalu carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment