McCormick (MKC) has really bucked the trend in the packaged food segment. With many companies struggling in this sector, McCormick has been able to keep its top line growing convincingly which is an achievement in itself. Rising commodity (which we will discuss) or input costs, elevated competition as well as transport costs headwinds have resulted in plenty of struggle for many companies this year.
McCormick, though, has been able to maintain its profitability despite spending more. One thing is achieving revenue growth through more aggressive advertising spend for example but another is being able to maintain operating margins which McCormick has done. After the company's third-quarter results, McCormick now has an operating margin (average over the past four quarters) of 17.3% which is the highest it has been over the past decade.
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