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McCormick Raises FY18 Earnings Projection - Quick Facts

McCormick & Company, Incorporated (MKC) announced, for fiscal 2018, the company projects adjusted earnings per share to be in the range of $4.95 to $5.00; an increase from the previous guidance of $4.85 to $4.95 and reflects a reduction of the expected adjusted effective tax rate to approximately 21% for 2018, due to the year to date favorable impact of discrete items, principally a higher level of stock option exercises. The updated guidance also reflects a lower favorable impact from currency. The updated guidance projects an increase of 16% to 17% from adjusted earnings per share in 2017 and includes minimal impact from currency.

In 2018, McCormick expects to grow sales 12% to 14% compared to 2017, including only a one percentage point favorable impact from currency rates; a decrease from previous guidance of 13% to 15% which included a two percentage point favorable impact from currency rates. The company expects to drive sales growth with new products, brand marketing and expanded distribution as well as the incremental impact of acquisitions.

For fiscal 2018, the company projects another year of strong cash flow, with plans to return a significant portion to McCormick's shareholders through dividends and to pay down debt.

For the third-quarter, adjusted earnings per share was $1.28 compared to $1.12 in the year-ago period. The company said the increase in adjusted earnings per share was driven primarily by higher adjusted operating income and a favorable adjusted income tax rate partially offset by higher interest expense and shares outstanding. This was an increase in adjusted earnings per share of 14%, which includes an unfavorable impact of foreign currency rates.

McCormick reported a 14% sales increase in the third quarter from the year-ago period with minimal impact from currency. Incremental sales through mid-August from the acquired Frank's and French's brands added 10% to the sales increase. Consumer segment sales grew by 14% with minimal impact from currency.

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