McCormick Is Suffering From a Slow China Recovery, and It's Not the Only One

When (NYSE: MKC) reported its fiscal third-quarter results in early October, it highlighted that its sales increased 6% year over year. But there was a caveat. The slow recovery in China was producing what it described as a 1 percentage point headwind. At first, that might not sound like a big deal, but when you step back and think about it, it really is. And the spice company isn't alone when it comes to the impact of the China story.

At first blush, 1% seems like a tiny number. So why worry about a single percentage point headwind from China?

McCormick basically said that if its China segment had performed as expected, its top line would have grown by 7%. Going from 6% growth to 7% growth would have amounted to roughly 16.7% more actual sales growth. You have to consider the relative impact of that percentage point.

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Source Fool.com