MCCORMICK & CO /SH NV (NYSE: MKC) stock enhanced over 2.4% on 28^th September, 2018 (as of 11:12 AM GMT-4 ; Source: Google finance) after the company met the analysts’ expectation for the third quarter 2018. MKC in the third quarer of FY 18 has reported the adjusted earnings per share of $1.28, which is as per the analysts’ estimates for the adjusted earnings per share of $1.28. The company had reported the adjusted revenue growth of 14 percent to $1.35 billion in the third quarter of FY 18, which is as per the analysts’ estimates for revenue of $1.35 billion. The sales growth was driven partly by its $4 billion acquisition last year of the food division of Reckitt Benkiser Group, which included the French’s mustard brand and Frank’s Red Hot sauce. Kurzius in particular noted sales growth in its consumer and flavor solutions segments driven partly by incremental gains in the Frank’s and French’s portfolio.

Moreover, 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.  The incremental impact of Frank’s and French’s added 10% to the consumer segment with the remaining increase driven by the Americas and Asia/Pacific regions.  Flavor solutions segment sales grew by 14%, with minimal impact from currency and 9% from the incremental impact Frank’s and French’s.  The remaining sales increase was driven by the Americas and EMEA regions.

Gross profit margin increased 330 basis points versus the year-ago period.  This expansion was driven by CCI-led cost savings and our shift in the portfolio to more value added products, including the impact of Frank’s and French’s portfolios.  Additionally, in the year-ago period gross profit margin was unfavorably impacted $6 million by the RB Food’s transaction expense related to the acquisition-date fair value adjustment of inventories.  Operating income was $233 million in the third quarter compared to $169 million in the year-ago period.  This increase was driven by higher sales and gross margin expansion as well as decreases in special charges and in transaction and integration expenses from the RB Foods acquisition.  Partially offsetting this increase was higher brand marketing and distribution expense.  Brand marketing increased 36%, or $21 million, in the third quarter versus the year-ago period.  The company recognized $6 million of transaction and integration expenses in operating income related to the RB Foods acquisition in the third quarter of 2018 versus $30 million in 2017.  The company recorded $3 million of special charges in the third quarter of 2018 versus $5 million in 2017.