Group 1 - The long-term outlook for McCormick & Company, Incorporated (NYSE: MKC) is positive, with previous trading activity indicating a buy call at the bottom in October 2023 [1] - The company has been identified as a high-conviction pick that has performed well during recent market selloffs [1] - A blended trading and income approach is suggested to enhance savings and retirement timelines, indicating a strategic investment methodology [1]

Faten Freiha Good morning. This is Faten Freiha, VP of Investor Relations. Thank you for joining today's first quarter earnings call. To accompany this call, we've posted a set of slides on our IR website, ir. mccormick. com. With me this morning are Brendan Foley, Chairman, President and CEO; and Marcos Gabriel, Executive Vice President and CFO. During this call, we will refer to certain non-GAAP financial measures. The nature of those non-GAAP financial measures and the related reconciliations to the GAAP ...

Core Insights - McCormick reported revenue of $1.61 billion for the quarter ended February 2025, reflecting a year-over-year increase of 0.2% and a slight revenue surprise of -0.38% compared to the Zacks Consensus Estimate [1] - The company's EPS for the same period was $0.60, down from $0.63 a year ago, resulting in an EPS surprise of -6.25% against the consensus estimate of $0.64 [1] Revenue Breakdown - Flavor Solutions net sales reached $686 million, exceeding the average estimate of $682.40 million, marking a year-over-year increase of 0.7% [4] - Consumer net sales were reported at $919 million, falling short of the average estimate of $928.64 million, representing a year-over-year decline of 0.3% [4] Operating Income Analysis - Operating income for Flavor Solutions, excluding special charges and transaction expenses, was $79 million, surpassing the average estimate of $65.54 million [4] - Operating income for Consumer, excluding special charges and transaction expenses, was $147 million, below the average estimate of $166.59 million [4] Stock Performance - McCormick's shares have returned -1.1% over the past month, compared to a -3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - McCormick reported Q1 2025 earnings that fell short of analysts' expectations, with EPS of $0.60 versus the expected $0.64 and revenue of $1.605 billion compared to the anticipated $1.611 billion, indicating a mixed but resilient performance [2][3] Financial Performance - Q1 2025 EPS was $0.60, a decrease of 4.8% year-over-year from $0.63 in Q1 2024 [3] - Revenue for Q1 2025 was $1.605 billion, showing a slight increase of 0.2% from $1.603 billion in Q1 2024 [3] - Adjusted operating income was $225 million, down 5.3% from $238 million in Q1 2024 [3] - Gross profit margin improved to 37.6%, up 0.2 percentage points from 37.4% in Q1 2024 [3] Segment Performance - The Consumer segment experienced a 0.2% decline in sales to $919 million, with a 2.6% volume growth offset by a 1.4% pricing decrease [6] - The Flavor Solutions segment saw sales increase by 0.8% to $686 million, with a 28% rise in adjusted operating income attributed to favorable product mix and pricing strategies [7] Strategic Operations - McCormick's strategic pricing, product innovation, and brand recognition are key factors for its success [5] - The company is focused on enhancing its brand portfolio and strengthening its global market position [4] - Currency impacts negatively affected total sales by approximately 1.8% and adjusted operating income by 2.1% [8] Future Outlook - For fiscal 2025, McCormick forecasts net sales growth of 0% to 2% and operating income growth of 3% to 5% [10] - The company remains committed to margin expansion and cost structure management despite potential foreign exchange challenges [10] - A 7% dividend increase reflects management's confidence in future cash flow generation [9]

Core Viewpoint - McCormick's quarterly earnings of $0.60 per share fell short of the Zacks Consensus Estimate of $0.64 per share, marking a -6.25% earnings surprise compared to the previous year's earnings of $0.63 per share [1][2] Financial Performance - The company reported revenues of $1.61 billion for the quarter ended February 2025, slightly missing the Zacks Consensus Estimate by 0.38%, and showing no significant change from the year-ago revenues of $1.6 billion [2] - Over the last four quarters, McCormick has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - McCormick shares have increased approximately 5.4% since the beginning of the year, contrasting with the S&P 500's decline of -1.9% [3] - The current Zacks Rank for McCormick is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $1.67 billion, while the estimate for the current fiscal year is $3.07 on revenues of $6.82 billion [7] - The outlook for the Food - Miscellaneous industry, to which McCormick belongs, is currently in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - Total organic sales increased by 2%, primarily driven by volume and product mix growth, partially offset by pricing [7][29] - Adjusted operating income declined by 5%, with a 3% decrease on a constant currency basis, primarily due to increased SG&A expenses [33][34] - First quarter adjusted earnings per share was $0.60 compared to $0.63 for the same period last year [36] Business Line Data and Key Metrics Changes - In the Global Consumer segment, organic sales increased by 1%, with a 3% volume growth offset by a 2% impact from pricing investments [29][30] - The Flavor Solutions segment saw organic sales growth of 3%, driven by 2% volume growth and a 1% contribution from price [32] - In the Americas, Flavor Solutions organic sales increased by 4%, reflecting a 3% price contribution and 1% volume growth [32] Market Data and Key Metrics Changes - In EMEA, consumer organic sales grew by 4%, driven by a 2% increase in volume and a 2% increase in price [30] - Asia Pacific region saw consumer organic sales increase by 3%, driven by a 2% increase in volume and a 1% contribution from price [31] - Flavor Solutions in Asia Pacific experienced a significant 15% organic sales increase, with 16% volume growth driven by QSR customer promotions [33] Company Strategy and Development Direction - The company remains focused on growth through category management, brand marketing, new products, and proprietary technologies [25][26] - Investments in brand marketing are prioritized to connect with consumers and fuel growth, with an expected increase in brand marketing spend in the high single digits [27][43] - The company aims to capitalize on secular trends in health and wellness, with a focus on meeting changing consumer dietary needs [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted increasing consumer uncertainty and inflation concerns impacting consumer sentiment, particularly among lower-income consumers [11][12] - The company expects to maintain its guidance for the year, reflecting confidence in strong sales performance and growth across both segments [39][60] - Management anticipates gross margin expansion throughout the year, driven by product mix and cost savings from the CCI program [42][43] Other Important Information - The company returned $121 million to shareholders through dividends and used $37 million for capital expenditures [38] - The outlook for 2025 includes expectations for organic net sales growth to range between 3% and 4%, with volume-led growth anticipated [41][42] Q&A Session Summary Question: What drove the stronger than forecast operating profit decline in the consumer segment? - Management indicated that timing shifts related to stock-based compensation and brand marketing investments impacted the operating profit, but they remain confident in the full-year guidance due to strong sales performance [54][56][58] Question: Can you provide context on pricing dynamics in the Americas consumer business? - Management explained that pricing in the Americas is expected to be flat, with some incremental pricing in EMEA to address commodity pressures, while volume growth remains the primary driver [66][70] Question: How is the company addressing tariff risks? - Management stated that known tariffs on China have been accounted for in their forecasts, and they are closely monitoring potential future tariff changes while preparing to manage any impacts [94][96] Question: What should investors expect in terms of EBIT and EPS in Q2? - Management noted that Q1 was expected to be different from the rest of the year, with continued top-line growth and gross margin improvements anticipated in the second half of the year [99][100]

Financial Performance - McCormick reported first quarter sales of $1.605 billion, reflecting a 0.2% increase compared to the previous year, with a 2% unfavorable impact from currency[6]. - Organic sales growth for the first quarter was 2%, driven by volume growth of 2.2% and a 0.2% decrease from pricing[7]. - Operating income for the first quarter was $225 million, a decrease of 3.6% from $234 million in the prior year, with adjusted operating income also at $225 million, down 5%[8]. - Earnings per share (EPS) for the first quarter was $0.60, compared to $0.62 in the same period last year, reflecting a 3.2% decline[12]. - Total net sales increased by 0.2% as reported, with a constant currency and organic growth of 2.0%[26]. - Net sales for the three months ended February 28, 2025, were $1,605.5 million, a slight increase from $1,602.7 million in the same period of 2024[38]. - Gross profit margin improved to 37.6% in Q1 2025 from 37.4% in Q1 2024[38]. - Net income for the three months ended February 28, 2025, was $162.3 million, compared to $166.0 million in the same period of 2024[41]. Segment Performance - The Consumer segment reported sales of $919 million, consistent with the previous year, while the Flavor Solutions segment saw a 1% increase to $686 million[9]. - Adjusted operating income for the consumer segment decreased by 16.8% as reported, with a constant currency decline of 15.9%[26]. - Adjusted operating income for the flavor solutions segment increased by 27.9% as reported, with a constant currency growth of 33.2%[26]. - Total flavor solutions reported a 0.8% increase in sales, with a constant currency growth of 3.3%[26]. - The Americas region reported a 0.4% decline in total consumer sales, with a constant currency growth of 0.1%[26]. - The APAC region showed a significant increase in flavor solutions sales by 12.7% as reported, with a constant currency growth of 15.3%[26]. Future Outlook - The company expects fiscal 2025 net sales growth of 0% to 2%, with organic sales growth anticipated to be 1% to 3%[15]. - Operating income for fiscal 2025 is projected to grow by 3% to 5%, with adjusted operating income growth expected to be in the range of 4% to 6%[15]. - The projected percentage change in net sales for the year ending November 30, 2025, is expected to be between 0% to 2%[27]. - The projected percentage change in adjusted operating income for the year ending November 30, 2025, is expected to be between 3% to 5%[27]. - The percentage change in net sales in constant currency is projected to be between 1% to 3%[27]. - Adjusted earnings per share (diluted) for 2025 projected to be between $3.03 and $3.08, compared to $2.95 for 2024[28]. Cost Management and Strategic Initiatives - McCormick anticipates a special charge impact of $15 million related to organizational and streamlining actions in fiscal 2025[15]. - The company plans to offset costs related to U.S. import tariffs on China through cost savings initiatives and targeted price adjustments[17]. - McCormick's fiscal 2025 outlook includes strong cash flow expectations driven by profit and working capital initiatives, with a commitment to return a significant portion to shareholders through dividends[16]. - Cash and cash equivalents decreased to $102.8 million as of February 28, 2025, down from $186.1 million at the end of November 2024[39]. - Total assets decreased to $12,899.8 million as of February 28, 2025, from $13,070.3 million at the end of November 2024[39]. - Total liabilities decreased to $7,450.1 million as of February 28, 2025, from $7,753.5 million at the end of November 2024[39]. - The company expects a percentage change in adjusted earnings per share in constant currency to be between 5% and 7%[28]. - The impact of unfavorable foreign currency exchange is estimated to be 2% on earnings[28]. Growth Strategy - The company is focused on driving sustainable growth through its Consumer and Flavor Solutions segments[34].

HUNT VALLEY, Md., March 25, 2025 /PRNewswire/ -- McCormick & Company, Incorporated (NYSE:MKC), a global leader in flavor, today reported financial results for the first quarter ended February 28, 2025 and reaffirmed fiscal 2025 outlook. Sales in the first quarter were comparable to the year-ago period, reflecting volume growth of 2% offset by a 2% unfavorable impact from currency. Organic sales growth of 2% was driven by volume. Operating income was $225 million in the first quarter compared to $234 milli ...

McCormick & Company, Incorporated MKC will release its first-quarter financial results before the opening bell on Tuesday, March 25.Analysts expect the company to report quarterly earnings at 64 cents per share, up from 63 cents per share in the year-ago period. McCormick projects quarterly revenue of $1.61 billion, compared to $1.6 billion a year earlier, according to data from Benzinga Pro.On Jan. 27, Barclays analyst Andrew Lazar maintained McCormick with an Equal-Weight rating and lowered the price targ ...

Core Viewpoint - McCormick & Company is expected to show growth in both revenue and earnings for the first quarter of 2025, with revenue estimates at nearly $1.6 billion, reflecting a 0.6% increase year-over-year, and earnings projected at 64 cents per share, indicating a 1.6% growth from the previous year [1][3]. Group 1: Growth Drivers - The company is experiencing strong growth due to increased volume and an improved product mix [3]. - Strategic initiatives such as brand marketing, innovative product and packaging solutions, and proprietary technology are enhancing McCormick's market presence [3]. - Recovery in consumer demand from China is contributing positively to the company's momentum [3]. - Cost-saving initiatives are supporting growth investments and improving operating margins [3]. Group 2: Challenges - Despite growth, McCormick faces challenges from inflationary pressures that could impact performance [4]. - Increased investments in brand marketing are raising SG&A expenses, which may affect operating leverage [4]. Group 3: Earnings Predictions - The company's earnings model suggests a likely earnings beat, supported by a positive Earnings ESP of +1.95% and a Zacks Rank of 3 (Hold) [5]. - McCormick has a trailing four-quarter earnings surprise average of 12.9%, indicating a history of exceeding earnings expectations [1][5].