Spice and condiment manufacturer McCormick & Company (NYSE: MKC) continues to post spicy hot earnings in both its retail and wholesale divisions around the globe. 2Q 2007 sales increased 7% overall, on top of 1Q 2007 overall sales increase of 7%. Retail sales were up 6%, and wholesale sales of poultry and snack seasonings were up 9% for 2Q. EPS for the quarter was $0.31 compared with the EPS in the previous quarter of $0.33. CEO Robert Lawless is so confident in McCormick's continued cost cutting programs, as well as the company's continued organic growth, that he recently upped FY guidance for growth rate to 9-11% from previous guidance of 8-10%. Revised FY 2007 EPS is now in the $1.69-$1.73 range.

For 2Q 2007, retail sales in North America increased 5%, 10% in Europe and 8% in Asia/Pacific, with the bulk of that gain coming in China which remains relatively untapped by McCormick. Double digit sales increases in China helped offset declining sales in Australia. Much the same story is true of McCormick's industrial sales which saw a 2% increase in North America, 26% increase in Europe (16% of which came from currency exchange rate fluctuations), and 34% increase in Asia/Pacific, with China again being the big producer.

Given two consecutive quarter's worth of good news, it is hard to see why the stock is trading down 8% from its price of $38.40 at the beginning of the year. The fundamentals are good. The company discontinued money losing or lower profit margin product lines. The recent acquisition of Simply Asia Foods continues to make important contributions to the bottom line. Everybody uses the company's products either directly as spices, or in products which use McCormick's seasonings. Additionally, the stock pays a respectable dividend of 2.1%. At its recent close of $35.65 the stock looks like a lower-risk bargain.