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McCormick Promotes Michael Smith as Chief Financial Officer

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Price movement

McCormick & Company (MKC) has a market cap of $13.1 billion. Its stock rose by 0.68% to close at $102.71 per share on June 29, 2016. The stock’s weekly, monthly, and YTD (year-to-date price) movements were 2.5%, 5.8%, and 20.6%, respectively, on the same day. MKC is trading 3.0% above its 20-day moving average, 5.7% above its 50-day moving average, and 14.8% above its 200-day moving average.

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Related ETF and peers

The SPDR S&P 500 ETF (SPY) invests 0.06% of its holdings in McCormick & Company. The ETF tracks a market cap–weighted index of US large- and mid-cap stocks selected by the S&P Committee. The YTD price movement of SPY was 2.4% on June 29.

The market caps of McCormick & Company’s competitors are as follows:

  • Kraft Heinz (KHC): $104.7 billion
  • Tyson Foods (TSN): $23.8 billion
  • ConAgra Foods (CAG): $20.8 billion

McCormick & Company’s new promotion

McCormick & Company has promoted Michael R. Smith to executive vice president and chief financial officer, effective September 1, 2016. Mr. Smith will handle the company’s global finance organization, shared services, and information technology. He will report to Lawrence E. Kurzius, the company’s president and CEO.

On September 1, 2016, Gordon M. Stetz will continue to work as executive vice president until his retirement on December 31, 2016.

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McCormick & Company’s performance in fiscal 1Q16

McCormick & Company reported fiscal 1Q16 net sales of $1.03 billion, a rise of 2.0% compared to net sales of $1.0 billion in fiscal 1Q15. The company’s cost of goods sold as a percentage of net sales fell by 1.6%, and its gross profit margin rose by 1.8%, compared to fiscal 1Q15.

In fiscal 1Q16, the company’s net income and EPS (earnings per share) rose to $93.4 million and $0.73, compared to $70.5 million and $0.55, respectively, in fiscal 1Q15.

In fiscal 1Q16, MKC’s cash and cash equivalents rose by 36.7%, and its inventories fell 0.88%, compared to fiscal 1Q15. Its current ratio and debt-to-equity ratio rose to 1.2x and 1.6x compared to 1.1x and 1.5x, respectively, in fiscal 1Q15.

Quarterly dividend

McCormick & Company has declared a quarterly dividend of $0.43 per share on its common stock. The dividend will be paid on July 25 to shareholders of record at the close of business on July 11.

Projections

The company has made the following projections for fiscal 2016:

  • sales growth in the range of 4%–6% on a constant-currency basis, driven by base business increases, new products, pricing, and acquisitions
  • adjusted operating income growth in the range of 6%–8%, which excludes $7 million of special charges related to organization and streamlining actions
  • adjusted EPS in the range of $3.68–$3.75, excluding the impact of special charges

In the next article in this series, we’ll take a look at UniFirst Corporation.

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