McCormick & Co. reported higher sales in its fiscal third quarter, ahead of its planned combination with Unilever's food business.
The spice maker on Thursday posted net income of $97.6 million, or 36 cents a share, for its three months ended Aug. 31, compared with $225.5 million, or 84 cents a share, a year earlier.
Stripping out certain one-time items, earnings came in at 86 cents a share. Analysts polled by FactSet expected adjusted earnings of 76 cents a share.
Quarterly sales climbed 17% to $2.02 billion, ahead of Wall Street models for $1.98 billion. On an organic basis, sales ticked up 1.9%.
Sales across McCormick's consumer segment jumped 25%, primarily due to its acquisition of McCormick de Mexico. On an organic basis, sales across the consumer unit increased 1% as higher prices offset lower volumes.
Sales across the company's flavor solutions segment were up 8%, or 3% on an organic basis.
Chief Executive Brendan Foley said disciplined productivity initiatives helped offset rising input and freight costs, supporting margin expansion and enabling continued investment in the company's brands.
He added that McCormick continues its work to combine with Unilever's food business, having made substantial progress on integration planning: "We have established the future leadership team and operating model, mobilized cross-functional resources, and developed detailed plans to support business continuity and planned synergy delivery post-close."
Looking ahead, McCormick continues to expect adjusted earnings of $3.05 to $3.13 a share for the year ended Nov. 30. Net sales are still projected to rise 13% to 17%, including an up to 13% contribution from McCormick de Mexico.
Analysts are looking for adjusted earnings of $3.09 a share on sales of $7.91 billion, marking a roughly 16% increase from last year.
Shares rose 3.5% to $48 in premarket trading.