McCormick & Company, Incorporated Conference Call Highlights

McCormick & Company, Incorporated MKC reported its fourth quarter earnings on Thursday. Shares of the company are up 3 percent.

International:

• We grew sales 3% with particularly strong growth in our consumer business in the Asia Pacific region.
• Led by a 15% growth in China, and in our industrial businesses in the Americas region and in Europe, Middle East and Africa, EMEA.
• In our Americas consumer business, we're making steady progress with growth initiatives to build brand equity and strengthen our category leadership.
• Consumer sales in the Americas declined 1% this quarter.

Financials:

• Gross profit margin increased in the third quarter.
• Sales growth, higher gross margin and our diligent expense management led to a 6% increase in operating income.
• Along with 5% sales growth, this business has completed the transition to a new, more efficient production facility, a move that has raised its profitability.
• Clearly, earnings per share at $0.94 was ahead of our previous outlook.
• We continue to step up our share repurchase activity and have lowered shares outstanding nearly 2% year-to-date when compared to 2013.
• Between share repurchases and our dividend payments, we reached $323 million year-to-date and cash return to shareholders up 42% from the same period in 2013.
• We're maintaining our projected sales growth rate at 3% to 5%.
• First, we're supporting our brands and plan to increase our marketing support by at least $11 million from the fourth quarter of 2013.
• Second, we expect the growth of our international businesses to outpace the increase in the U.S.

Growth:

• In addition to these bricks-and-mortar retailers, our e-commerce sales have risen at a high-double-digit rate.
• Compared to the year-ago period, sales grew 3% in local currency and adjusted operating income was up 26%.
• Sales in the Americas were down 1% in local currency with higher pricing more than offset by a 2% decline in volume and product mix.
• As a reminder, adjusted operating income was up more than 50% in the fourth quarter of 2013.
• Turning next to our industrial business, we grew third quarter sales 3%.