Consumers may forgo buying houses, cars, clothes and luxuries, but one thing is certain as the nation slips into recession and war threatens, they still have to eat.
And that is the main reason why business at McCormick & Co. Inc. is better than ever, according to James J. Harrison Jr., chief financial officer of the Hunt Valley spice and seasonings maker.
"People are eating at home more," Harrison said. And they are using more spices and herbs.
The company released its earnings statement yesterday that showed its 1990 operating profits hit an all-time high for the third year in a row.
Earnings in the fourth quarter increased 32 percent and sales increased 10 percent compared with the year-ago quarter, the company said. For the quarter ending Nov. 30, 1990, the company reported earnings of $25.5 million, or 62 cents a share, on sales of $399 million compared with earnings of $20.3 million, or 47 cents a share, on sales of $361.5 million in 1989. The per-share figure in 1989 included 6 cents from the sale of operations in Brazil.
The spice maker said net income for its fiscal year was $69.4 million, or $1.66 cents a share, on sales of $1.3 billion, compared with $135.5 million, or $3.09 a share, on sales of $1.25 billion in 1989. The 1989 figures include a gain of $83 million, or $1.89 a share, from the sale of discontinued real estate operations.
The company's operating profits actually increased 32 percent over the $52.5 million reported in 1989. Sales, excluding business divestitures, increased 8 percent.
The per-share earnings in 1990 included 15 cents for the sale of land in the United Kingdom. The 1989 per-share earnings included 6 cents for the sale of operations in Brazil.
While consumers are opting for more home-cooked meals, Harrison said, McCormick's success is also due to conscious efforts to improve products and packaging. The company has introduced a new package line that replaces tin containers with plastic ones that allow the consumer to see the product.
Grocers seem to like the new packaging because McCormick's penetration in the market is increasing. Harrison said McCormick now has at least one item in about 80 percent of the nation's supermarkets.
Harrison said McCormick also has increased sales to food companies and now sells to 80 of the top 100 food companies.
For the last three years, McCormick's operating profits have hit record levels. In 1988, they were up 46 percent; in 1989 they were up 52 percent and in 1990 they were up 32 percent.