SPARKS, Md. (AP) — McCormick & Co.'s fiscal third-quarter net income held steady as revenue improved thanks in part to an acquisition.
But the spice and flavoring maker said Thursday that it now foresees full-year adjusted earnings coming in at the lower end of its projected range in part because of softer demand for industrial products by some of its restaurant customers. It expects revenue for the year at the lower end of its guidance.
For the three months ended Aug. 31, McCormick earned $104.4 million, or 78 cents per share. That was the same as in the prior-year period and matched the average expectations of analysts polled by FactSet.
Revenue for the Sparks, Md., company increased to $1.02 billion from $977.7 million, benefiting from the acquisition of China's Wuhan Asia-Pacific Condiments Co. Wall Street was looking for $1.03 billion in revenue.
McCormick completed its $147 million buyout of privately held Wuhan in May.
Revenue rose in the consumer segment thanks partly to the Wuhan buyout. Revenue edged down slightly in the industrial business on soft demand from quick-service restaurants because of declining traffic and an emphasis on food not flavored by McCormick.
McCormick now anticipates full-year adjusted earnings at the lower end of its outlook of $3.13 to $3.19 per share and revenue at the lower end of its forecast for a 4 percent to 6 percent increase. It expects its fourth-quarter adjusted earnings and revenue to both climb by about 7 percent.
Analysts predict full-year earnings of $3.16 per share.
Chairman, President and CEO Alan Wilson said in a statement that the company expects to raise its fourth-quarter marketing spending about $10 million to help boost sales during the critical holiday period and build momentum heading into the new year. This is more than double the $4 million increase to its marketing spending in the third quarter.
McCormick shares finished at $68.05 on Wednesday. They have traded in a 52-week range of $60.06 to $75.26.