Why McCormick Stock Gained 15% in June

What happened

Spice and flavorings giant McCormick (NYSE: MKC) beat the market last month by gaining 15%, according to data provided by S&P Global Market Intelligence, compared to a flat result for the S&P 500.

The boost also pushed shareholder returns ahead of the broader market over the past 12 months.

So what

Investors celebrated the company's fiscal second quarter report that was published late in the month. That announcement showed strong sales and profitability gains at a time when most consumer packaged foods rivals are struggling on both metrics. McCormick, with help from its recent acquisition of the French's and Frank's mustard and hot sauce brands, saw sales rise 16% as net income jumped 23%.

Now what

Executives plan to use their good relationship with retailers to get the newly acquired condiment brands more shelf space in key markets around the world. That initiative should keep sales rising while pushing profit margins higher.

Investors will also want to see faster growth in McCormick's core spice portfolio that edged up by just 2% in the most recent quarter. Stock repurchase spending, meanwhile, has slowed to a trickle but should pick up as soon as the company makes more progress paying down the debt it took on to fund its aggressive brand acquisition strategy.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy.