UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-14920 McCORMICK & COMPANY, INCORPORATED (Exact name of registrant as specified in its charter) Maryland 52-0408290 (State or other ...

FOR IMMEDIATE RELEASE McCORMICK REPORTS STRONG SECOND QUARTER PERFORMANCE AND REAFFIRMS 2025 OUTLOOK HUNT VALLEY, Md., June 26, 2025 - McCormick & Company, Incorporated (NYSE:MKC), a global leader in flavor, today reported financial results for the second quarter ended May 31, 2025 and reaffirmed fiscal 2025 outlook. Chairman, President, and CEO's Remarks Brendan M. Foley, Chairman, President, and CEO, stated, "We are pleased with our strong results for the first half of the year, as we are managing in a dy ...

Financial Performance - Net sales for the three months ended February 28, 2025, were $1,605.5 million, a slight increase from $1,602.7 million for the same period in 2024, representing a growth of 0.2%[11] - Gross profit for the same period was $604.0 million, compared to $599.3 million in the prior year, reflecting a growth of 0.1%[11] - Operating income decreased to $225.2 million from $233.5 million year-over-year, a decline of 3.5%[11] - Net income for the three months ended February 28, 2025, was $162.3 million, down from $166.0 million in the previous year, a decrease of 2.2%[11] - Earnings per share (EPS) remained stable at $0.60 for both basic and diluted shares, compared to $0.62 in the same quarter of 2024[11] - The company reported a comprehensive income of $129.8 million for the three months ended February 28, 2025, compared to $163.0 million in the prior year, a decrease of 20.3%[13] Cash and Assets - Cash and cash equivalents decreased to $102.8 million from $186.1 million at the end of the previous quarter, a decline of 44.7%[15] - Total assets as of February 28, 2025, were $12,899.8 million, down from $13,070.3 million at the end of November 2024, a decrease of 1.3%[15] - Total liabilities decreased to $7,450.1 million from $7,753.5 million, reflecting a reduction of 3.9%[15] - The balance of cash and cash equivalents at the beginning of the period was $186.1 million, indicating a decrease of 44.7% by the end of the period[18] - Cash and cash equivalents at the end of the period were $102.8 million, down from $178.0 million at the end of February 29, 2024, representing a decrease of 42.2%[18] Dividends and Share Repurchase - The company paid cash dividends of $0.45 per share, an increase from $0.42 per share in the same period last year, representing a growth of 7.1%[11] - The company paid dividends totaling $120.7 million, an increase from $112.7 million in the previous year, marking a rise of 7.1%[18] - The company repurchased $169 million of its shares under the $600 million share repurchase program, with $431 million remaining as of February 28, 2025[62] Debt and Interest - The carrying amount of long-term debt as of February 28, 2025, was $3,850.8 million, with a total fair value of $3,678.4 million[51] - The company’s interest expense for the three months ended February 28, 2025, was $48.5 million, compared to $50.3 million for the same period in 2024[11] - The company recorded $3.7 million in interest expense related to interest rate contracts for the three months ended February 28, 2025[43] - The company had $257.4 million in receivables sold under a nonrecourse accounts receivable sale program as of February 28, 2025, up from $106.9 million on November 30, 2024[45] Special Charges and Expenses - Special charges for the three months ended February 28, 2025, were recorded as $0, compared to $4.2 million for the same period in 2024, which included $2.1 million in employee severance and related benefits[34] - Stock-based compensation expense increased to $20.0 million for the three months ended February 28, 2025, compared to $11.7 million for the same period in 2024[55] - The company reported a net aggregate amount of pension and other postretirement benefits income of $(1.2) million for Q1 2025, compared to $(2.0) million in Q1 2024[54] Segment Performance - The consumer segment net sales were $919.2 million, while the flavor solutions segment net sales were $686.3 million for the three months ended February 28, 2025[68] - Operating income for the consumer segment was $146.7 million, down from $176.3 million in the prior year, while flavor solutions segment operating income increased to $78.5 million from $61.4 million[68] - Operating income for the Consumer segment was $174.5 million, while the Flavor Solutions segment reported $59.0 million for the three months ending February 28, 2025[69] Tax and Compliance - Income tax expense for the three months ended February 28, 2025, included $5.2 million of net discrete tax benefits, primarily from the revaluation of deferred taxes[59] - The total amount of unrecognized tax benefits as of February 28, 2025, is not expected to be material to the consolidated financial statements[61] Foreign Currency and Hedging - The notional amount of outstanding foreign currency exchange contracts as of February 28, 2025, was $1,026.6 million, slightly down from $1,034.2 million as of November 30, 2024[38] - The company has not experienced material hedge ineffectiveness in its foreign currency exchange contracts[38] - Fair value hedges amounted to $878.0 million as of February 28, 2025, compared to $818.1 million as of November 30, 2024[38] - Cash flow hedges decreased from $216.1 million on November 30, 2024, to $148.6 million on February 28, 2025[38] Organizational Changes - The company is evaluating changes to its organizational structure to reduce fixed costs and improve competitiveness[34] - The company continues to focus on maintaining operational efficiency while managing special charges effectively[69]

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]. - 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]. - Adjusted earnings per share for 2025 projected to be between $3.03 and $3.08, compared to $2.95 for 2024, reflecting a growth of approximately 2.7% to 4.4%[28]. 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]. - The Flavor Solutions segment's operating income grew 28% in the first quarter, driven by product mix and cost savings, while the Consumer segment's operating income decreased 17%[13]. - 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]. - The Americas region reported a total consumer sales decline of 0.4% as reported, 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 adjusted operating income growth projected at 3% to 5%[15]. - McCormick anticipates a 1% unfavorable impact from foreign currency on sales and a 2% impact on adjusted earnings per share for fiscal 2025[14]. - 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 around 2% on earnings[28]. Cash Flow and Assets - 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]. - 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]. Strategic Initiatives - The company plans to offset costs related to U.S. import tariffs on China through cost savings initiatives and targeted price adjustments[17]. - The fiscal 2025 outlook includes strong cash flow expectations driven by profit and working capital initiatives, with a significant portion returned to shareholders through dividends[16]. - The company is focused on driving revenue growth through brand marketing support, product innovation, and market expansion strategies[30].

Financial Performance and Results - Net sales growth in 2024 was 0.9% compared to 2023, driven by favorable pricing actions and product mix[142] - Operating income in 2024 was $1,060.3 million, a 10.1% increase from $963.0 million in 2023[142] - Adjusted diluted earnings per share in 2024 was $2.95, a 9.3% increase from $2.70 in 2023[143] - Net cash provided by operating activities in 2024 was $921.9 million, compared to $1,237.3 million in 2023[144] - Gross profit for 2024 increased by $88.5 million to $2,591.0 million, with gross profit margin rising 90 basis points to 38.5%, driven by pricing actions, favorable product mix, and cost savings[153] - Operating income for 2024 increased by $97.3 million to $1,060.3 million, with operating margin rising 130 basis points to 15.8%, driven by reduced special charges and improved profitability[158] - Special charges for 2024 decreased significantly to $9.5 million from $61.2 million in 2023, primarily related to the GOE program and manufacturing facility transition[155][156][157] - Effective tax rate for 2024 decreased to 20.5% from 21.8% in 2023, driven by $31.7 million in net discrete tax benefits, including deferred tax asset recognition and reserve reversals[160][161] - Adjusted operating income increased 4.5% to $1,069.8 million in 2024, with adjusted operating margin of 15.9%[184] - Adjusted diluted earnings per share for 2024 was $2.95, representing a 9.4% increase from 2023[184] - Net sales for 2024 increased by 0.9% to $6,723.7 million, driven by pricing actions (+0.5%), favorable volume and product mix (+0.3%), and foreign exchange (+0.3%), partially offset by divestiture impact (-0.2%)[152] - Consumer segment sales increased by 1.1% to $3,848.5 million in 2024, with EMEA region sales growing 7.3% and APAC region sales declining 5.1% due to slower demand in China[169][171][172] - Segment operating income for the consumer segment increased by $4.8 million to $740.3 million, with operating margin slightly decreasing by 10 basis points to 19.2%[169][173] - Flavor Solutions segment net sales increased by 0.7% in 2024 to $2,875.2 million, with organic growth of 0.9%[174] - Flavor Solutions segment operating income increased 14.1% to $329.5 million in 2024, with operating margin expanding 140 basis points to 11.5%[178] - Net sales for the Consumer segment in the Americas increased by 0.6% as reported, with a 0.7% increase on a constant currency basis[191] - Net sales for the Flavor Solutions segment in APAC increased by 4.1% as reported, with a 5.1% increase on a constant currency basis[191] - Total adjusted operating income for the Flavor Solutions segment increased by 14.1% as reported, with a 14.5% increase on a constant currency basis[192] - Net cash provided by operating activities in 2024 was $921.9 million, a decrease from $1,237.3 million in 2023[195] - Capital expenditures in 2024 were $274.9 million, with an expected increase to approximately $300 million in 2025[206] - Net cash used in financing activities in 2024 was $583.1 million, primarily due to repayments of long-term debt totaling $801.1 million[208] - The cash conversion cycle decreased to 36 days in 2024 from 40 days in 2023, driven by improved inventory management[203] - Repaid $268.1 million of long-term debt in 2023, including $250.0 million of 3.50% notes maturing on September 1, 2023[209] - Issued $500.0 million of 4.95% notes due 2033, with net cash proceeds of $496.4 million[209] - Repaid $772.0 million of long-term debt in 2022, including $750 million of 2.70% notes maturing on August 15, 2022[209] - Repurchased 0.7 million shares of common stock in 2023 for $53.1 million, compared to 0.5 million shares for $35.7 million in 2022[209] - As of November 30, 2024, $448 million remained of a $600 million share repurchase program authorized in November 2019[209] - Received proceeds from exercised stock options of $17.5 million in 2024, $16.6 million in 2023, and $41.4 million in 2022[210] - Repurchased $9.0 million, $10.8 million, and $19.4 million of common stock in 2024, 2023, and 2022, respectively, for employee tax withholding[210] - Total dividends paid increased to $451.0 million in 2024, up from $418.5 million in 2023 and $396.7 million in 2022[210] - Dividends per share increased by 7.7% in 2024 to $1.68, compared to 5.4% in 2023 and 8.8% in 2022[210] - Board approved a 7.1% increase in quarterly dividend from $0.42 to $0.45 per share in November 2024[210] Segment Performance - Consumer segment contributed 57% of consolidated net sales and 69% of consolidated operating income in 2024, while flavor solutions segment contributed 43% of net sales and 31% of operating income[13] - Approximately two-thirds of consumer segment sales are from spices, seasonings, condiments, and sauces, with McCormick being a global brand leader in these categories[14] - Top three customers in the flavor solutions segment represented between 47% and 49% of global flavor solutions sales in 2024[23] - Consumer segment sales increased by 1.1% to $3,848.5 million in 2024, with EMEA region sales growing 7.3% and APAC region sales declining 5.1% due to slower demand in China[169][171][172] - Segment operating income for the consumer segment increased by $4.8 million to $740.3 million, with operating margin slightly decreasing by 10 basis points to 19.2%[169][173] - Flavor Solutions segment net sales increased by 0.7% in 2024 to $2,875.2 million, with organic growth of 0.9%[174] - Pricing actions contributed 1.2% to sales growth in 2024, while unfavorable volume and product mix reduced sales by 0.3%[174] - Americas region flavor solutions sales grew 1.4% in 2024, with organic growth of 1.5%, driven by 1.6% pricing impact[175] - EMEA region flavor solutions sales declined 3.5% in 2024, with organic decline of 3.6%, impacted by 3.3% unfavorable volume and product mix[176] - APAC region flavor solutions sales increased 4.1% in 2024, with organic growth of 5.1%, driven by 4.2% favorable volume and product mix[177] - Flavor Solutions segment operating income increased 14.1% to $329.5 million in 2024, with operating margin expanding 140 basis points to 11.5%[178] - Net sales for the Consumer segment in the Americas increased by 0.6% as reported, with a 0.7% increase on a constant currency basis[191] - Net sales for the Flavor Solutions segment in APAC increased by 4.1% as reported, with a 5.1% increase on a constant currency basis[191] - Total adjusted operating income for the Flavor Solutions segment increased by 14.1% as reported, with a 14.5% increase on a constant currency basis[192] Sales and Customer Concentration - Sales to Walmart accounted for 12% of consolidated sales in 2024, while sales to PepsiCo accounted for 13% of consolidated sales in the same year[23] - Two major customers accounted for approximately 25% of consolidated sales in 2024, and any negative change in these relationships could significantly impact the company's financial results[54] Geographic and International Operations - Approximately 39% of sales in fiscal year 2024 were from non-U.S. operations[39] - McCormick operates in over 150 countries and territories, with major brands like Ducros, Schwartz, and Kamis in the EMEA region and McCormick and DaQiao in the APAC region[14] - Approximately 39% of the company's sales in fiscal year 2024 were generated outside the U.S., exposing it to risks such as currency fluctuations, trade barriers, and political uncertainties[107] - The company's international operations are subject to additional risks, including changes in tax laws, tariffs, and trade barriers, which could impact profitability[107] - The company's effective tax rate is influenced by global earnings mix, tax legislation changes, and the resolution of tax uncertainties, which could lead to volatility in financial results[108][109] - The company expects no material increase in its effective tax rate from the implementation of the global 15% minimum tax (Pillar 2) starting in fiscal year 2025[164] Raw Material and Supply Chain Management - The company relies on strategic raw material purchases and customer price adjustments to manage volatility in raw material costs, including pepper, onion, garlic, and dairy products[19][20] - Fluctuations in raw material prices and availability, driven by factors such as weather, climate change, and geopolitical instability, could adversely affect the company's business and operating results[55][56] - Supply chain disruptions could impair the company's ability to manufacture or sell products, particularly due to reliance on single-location production and third-party suppliers[58] - Increased consumer demand may exceed production capacity, straining the supply chain and potentially affecting business operations[59] - Labor shortages, turnover, and cost increases could lead to higher operational costs and reduced efficiency in manufacturing and distribution[60] - Inflationary pressures on raw materials, packaging, labor, and distribution costs are expected to continue in 2025, potentially impacting financial results[61] - Geopolitical conflicts, such as those between Russia and Ukraine, and Israel and Hamas, may disrupt global operations and increase supply chain costs[65][66] - Natural disasters, cyber-attacks, or health epidemics could interrupt business operations, leading to potential losses in inventory and data[67][68] Brand and Intellectual Property - The company owns a broad portfolio of trademarks, including "McCormick," "French's," "Frank's RedHot," and "Zatarain's," which are critical to its business[24] - Intellectual property rights are critical to the company's business, and failure to protect them could reduce the value of products and brands[94] Forward-Looking Statements and Risks - Forward-looking statements include expectations for net sales, gross margin, earnings, cost savings, and the impact of foreign currency rates, with potential risks and uncertainties that could materially affect results[40] - The company anticipates sales growth through brand marketing, product innovation, and expansion in e-commerce and various markets, but results may be impacted by economic conditions, consumer spending, and supply chain challenges[40] - Inflationary pressures and supply chain disruptions, including raw material costs and labor shortages, could negatively affect the company's operations and financial performance[41][42] - The company expects productivity improvements through its CCI program and Global Business Services initiative, but these may be offset by external factors such as geopolitical conflicts and economic volatility[40][42] - The company's ability to maintain brand relevance and respond to consumer preferences, including the use of data analytics and AI, is critical to its competitive position[48] - The company faces risks related to product quality, safety concerns, and potential recalls, which could damage its reputation and lead to financial losses[49][50] - The rise of e-commerce and changing consumer behaviors, including the shift to private label products, could impact the company's market position and financial performance[53] - Geopolitical tensions, such as the conflicts between Russia and Ukraine and the war in the Middle East, could create additional risks for the company's supply chain and regulatory compliance[57] - Acquisitions, joint ventures, and divestitures may present financial and operational challenges, potentially impacting profitability[69][70] - Goodwill and indefinite-lived intangible assets totaling $5.2 billion and $3.0 billion, respectively, are subject to impairment risks, which could negatively affect financial results[71] - Foreign currency fluctuations, particularly in the Euro, British pound, and Chinese renminbi, could impact net sales, earnings, and cash flows[74] - Climate change and related regulatory measures may increase costs and disrupt operations, affecting the availability and pricing of raw materials[76][77] - Company has established science-based target 2025–2030 goals for Scope 1, 2, and 3 greenhouse gas emissions[79] - Company faces risks related to ESG goals, including potential negative impacts on reputation, business, and financial performance if goals are not met or perceived as unmet[82] - Increased regulatory requirements related to environmental causes may result in higher compliance costs and operating expenses[84] - Company's credit ratings impact borrowing costs and availability, with potential adverse effects if ratings are downgraded[87] - Cybersecurity threats and attacks pose risks to the company's information technology systems and data, with potential material impacts on operations and reputation[96] - Company's dividend payments are subject to board discretion and may be reduced, suspended, or discontinued based on financial conditions and other factors[93] - The company is implementing a multi-year business transformation initiative, including replacing its ERP system, to enhance global processes and reduce costs, with potential risks of business disruption and revenue loss if not managed effectively[98] - The company relies on third-party cloud-based services, and any failure by these providers could lead to increased costs, reputational damage, or legal issues[99] - The company faces compliance obligations under data privacy laws like GDPR and CCPA, with potential financial penalties and reputational damage for non-compliance[102][103] - The company has not experienced any material cybersecurity threats to date but maintains a comprehensive cybersecurity risk management program, including incident response plans and insurance[113][116][117] - The company has an Executive Cybersecurity Steering Committee and a dedicated information security team led by a Certified Information Systems Security Professional (CISO) to manage cybersecurity risks[121] - The company conducts regular cybersecurity training for employees and evaluates third-party service providers' cybersecurity risks to mitigate potential threats[115][114] Debt and Financial Structure - As of November 30, 2024, the company had total outstanding variable rate debt of approximately $449 million at a weighted-average interest rate of 4.7%[85] - Company had total outstanding fixed to variable interest rate swaps with a notional value of $600 million as of November 30, 2024[86] - Total indebtedness of the company and its subsidiaries as of November 30, 2024, is approximately $4.3 billion[88] Share Repurchases and Dividends - The company repurchased 298,747 shares of Common Stock in 2024, with an approximate dollar value of $448 million remaining under the share repurchase authorization[131] - Diluted earnings per share for 2024 was $2.92, with a projected range of $2.99 to $3.04 for 2025, representing a 3% to 5% increase, or 5% to 7% on a constant currency basis[151] - Repurchased 0.7 million shares of common stock in 2023 for $53.1 million, compared to 0.5 million shares for $35.7 million in 2022[209] - As of November 30, 2024, $448 million remained of a $600 million share repurchase program authorized in November 2019[209] - Received proceeds from exercised stock options of $17.5 million in 2024, $16.6 million in 2023, and $41.4 million in 2022[210] - Repurchased $9.0 million, $10.8 million, and $19.4 million of common stock in 2024, 2023, and 2022, respectively, for employee tax withholding[210] - Total dividends paid increased to $451.0 million in 2024, up from $418.5 million in 2023 and $396.7 million in 2022[210] - Dividends per share increased by 7.7% in 2024 to $1.68, compared to 5.4% in 2023 and 8.8% in 2022[210] - Board approved a 7.1% increase in quarterly dividend from $0.42 to $0.45 per share in November 2024[210] Future Guidance and Projections - The company expects 2025 net sales growth between 0% and 2%, with a 1% unfavorable impact from foreign currency rates[146] - 2025 gross profit margin is projected to improve by 50 to 100 basis points from the 38.5% reported in 2024[147] - 2025 operating income is anticipated to increase by 3% to 5%, including a 1% unfavorable impact from foreign currency rates[148] - The company expects a 2025 effective tax rate of 22.0%, compared to 20.5% in 2024[149] - Income from unconsolidated operations in 2025 is expected to decline by a mid-teen percentage rate due to the strengthening of the U.S. dollar against the Mexican peso[150] - 2025 guidance projects adjusted diluted earnings per share of $3.03 to $3.08, including $0.04 impact from special charges[188] - Projected net sales for 2025 are expected to grow between 0% to 2%, with organic net sales growth projected at 1% to 3%[194] - Adjusted operating income for 2025 is projected to grow between 3% to 5%, with a 4% to 6% increase on a constant currency basis[194] - Adjusted earnings per share (diluted) for 2025 are projected to grow between 3% to 5%, with a

Sales Performance - For Q4 2024, McCormick's sales increased by 3% year-over-year, with a 1% benefit from currency, driven primarily by volume growth [3]. - For fiscal year 2024, total sales rose by 1% compared to 2023, with earnings per share increasing to $2.92 from $2.52 in the prior year, representing a 15.9% growth [3][19]. - The consumer segment's sales for fiscal year 2024 reached $3,849 million, with organic sales growth of 1% driven by volume [14]. - The Flavor Solutions segment reported a 1% sales increase for fiscal year 2024, totaling $2,875 million, with organic sales growth driven by pricing [17]. - Total net sales for the three months ended November 30, 2024, increased by 2.6%, with organic sales growth at 1.8% [32]. - Total net sales for the year ended November 30, 2024, increased by 0.9% to $6,723.7 million compared to $6,662.2 million in 2023 [44]. - The Americas region reported a 3.7% increase in total consumer sales for the three months ended November 30, 2024 [32]. - The EMEA region experienced a significant 7.3% increase in total net sales for the year ended November 30, 2024 [44]. - The APAC region reported a decline of 5.1% in total net sales for the year ended November 30, 2024 [44]. Profitability and Income - Adjusted operating income for fiscal year 2024 was $1,070 million, reflecting a 5% increase from the previous year, supported by gross profit margin expansion [18]. - The gross profit margin for Q4 2024 expanded by 20 basis points to 40.2%, driven by cost savings from the Comprehensive Continuous Improvement (CCI) program [11]. - Consumer segment operating income increased 1% to $740 million in 2024 compared to the previous year, driven by higher sales and cost savings from the CCI program [22]. - Flavor Solutions segment operating income grew 14% to $330 million in 2024 compared to 2023, supported by a favorable product mix and cost savings from the CCI program [22]. - Adjusted net income for the year ended November 30, 2024, was $795.6 million, reflecting a 9.4% increase compared to the previous year [27]. - The company reported a net income of $215.2 million for the three months ended November 30, 2024, compared to $219.3 million in the same period of 2023 [44]. - McCormick reported a net income of $788.5 million for the year ended November 30, 2024, an increase of 15.9% compared to $680.6 million in the previous year [46]. Cash Flow and Financial Position - Cash flow from operations for fiscal year 2024 was $922 million, down from $1.2 billion in 2023, attributed to increased working capital and higher incentive compensation payments [20]. - The company expects strong cash flow for fiscal 2025, driven by profit and working capital initiatives, with a significant portion returned to shareholders through dividends [24]. - Net cash flow provided by operating activities was $921.9 million, down from $1,237.3 million, reflecting a decrease of 25.5% [46]. - Cash and cash equivalents at the end of the period were $186.1 million, up from $166.6 million at the beginning of the period, indicating a positive cash flow [47]. - Total assets increased to $13,070.3 million as of November 30, 2024, up from $12,862.3 million a year earlier, reflecting a growth of 1.6% [45]. - Total current liabilities decreased to $2,882.8 million from $3,098.9 million, a reduction of 7% year-over-year [45]. - Long-term debt increased to $3,593.6 million from $3,339.9 million, representing a rise of 7.6% [45]. - The company’s retained earnings rose to $3,545.0 million, an increase of 9.1% from $3,249.7 million in the previous year [45]. - The company experienced a decrease in inventories, which fell by $125.0 million, compared to an increase of $225.0 million in the previous year [46]. Future Outlook - The company's 2025 outlook emphasizes continued investments in core categories to enhance volume trends and long-term growth, despite anticipated foreign currency impacts [21]. - Total net sales growth is expected to be between 0% to 2% for the upcoming period, with organic sales growth projected at 1% to 3% over the 2024 level [23]. - Adjusted operating income is anticipated to grow by 3% to 5%, with earnings per share (EPS) projected between $2.99 and $3.04 [23]. - Projected percentage change in net sales for the year ending November 30, 2025, is expected to be between 0% to 2%, with a constant currency basis change of 1% to 3% [34]. - Adjusted earnings per share (diluted) for 2025 is projected to be between $3.03 to $3.08, compared to $2.95 for 2024 [34]. - The company anticipates a 3% to 5% increase in adjusted operating income for the year ending November 30, 2025, with a constant currency basis change of 4% to 6% [34]. Shareholder Returns - The company authorized a 7% increase in the quarterly dividend, marking the 39th consecutive year of dividend increases [3].

Financial Performance - Net sales for the three months ended August 31, 2024, were $1,679.8 million, a slight decrease from $1,684.7 million in the same period last year[5] - Gross profit increased to $649.9 million for the three months ended August 31, 2024, compared to $622.8 million in the prior year, reflecting a gross margin improvement[5] - Operating income rose to $286.5 million for the three months ended August 31, 2024, up from $245.0 million in the same period last year, indicating a 16.3% increase[5] - Net income for the three months ended August 31, 2024, was $223.1 million, compared to $170.1 million in the prior year, representing a 31.1% increase[7] - Earnings per share (EPS) for the three months ended August 31, 2024, were $0.83, up from $0.63 in the same period last year, marking a 31.7% increase[5] - Total shareholders' equity as of August 31, 2024, was $5,451.0 million, up from $5,354.2 million as of May 31, 2024[14] - The company reported a net income of $573.3 million for the nine months ended August 31, 2024[15] - The company reported a total (income) expense of $(0.5) million for pension and other postretirement benefits for the nine months ended August 31, 2024[59] Cash Flow and Assets - Cash and cash equivalents increased to $200.8 million as of August 31, 2024, compared to $166.6 million at the end of the previous period[9] - Total assets grew to $13,204.9 million as of August 31, 2024, up from $12,862.3 million at the end of the previous period[9] - The company reported a net cash flow provided by operating activities of $463.2 million for the nine months ended August 31, 2024, down from $660.1 million in the prior year[12] - The fair value of cash and cash equivalents as of August 31, 2024, is $200.8 million[52] Liabilities and Equity - Total liabilities decreased slightly to $7,753.9 million as of August 31, 2024, compared to $7,778.8 million at the end of the previous period[9] - The balance of retained earnings increased to $3,577.2 million as of August 31, 2024, from $3,480.3 million as of May 31, 2024[14] - The total carrying amount of long-term debt as of August 31, 2024, is $3,407.3 million, with a total fair value of $3,257.1 million[55] Dividends and Share Repurchase - The company declared cash dividends of $0.42 per share for the three months ended August 31, 2024, compared to $0.39 in the same period last year[5] - The company paid dividends totaling $112.9 million during the three months ended August 31, 2024[14] - As of August 31, 2024, $472.5 million remained of the $600 million share repurchase program authorized by the Board of Directors[73] Special Charges and Costs - Special charges recorded during the three months ended August 31, 2024, amounted to $1.9 million, primarily related to the Global Operating Effectiveness program[29] - Special charges for the three months ended August 31, 2024, totaled $1.9 million, compared to $6.1 million for the same period in 2023[39] - The GOE program incurred total costs of approximately $48 million as of November 30, 2023, with special charges of $4.6 million recognized during the nine months ended August 31, 2024[31] Segment Performance - Operating income excluding special charges for the consumer segment was $186.8 million, compared to $173.3 million in the prior year, reflecting a growth of 8.1%[79] - The flavor solutions segment reported net sales of $742.4 million for the three months ended August 31, 2024, down from $747.6 million in the same period of 2023, indicating a decline of 0.3%[79] - The consumer segment reported net sales of $937.4 million for the three months ended August 31, 2024, compared to $937.1 million in the same period of 2023, indicating stable performance[79] Tax and Compensation - Income tax expense for the three months ended August 31, 2024, included $16.3 million of net discrete tax benefits, primarily from the reversal of certain reserves for unrecognized tax benefits[67] - For the nine months ended August 31, 2024, the income tax expense included $34.9 million of net discrete tax benefits, with $19.4 million related to the recognition of a deferred tax asset[68] - Stock-based compensation for the three months ended August 31, 2024, was $8.8 million, down from $12.6 million in 2023, representing a decrease of approximately 30%[61] Other Comprehensive Income - The accumulated other comprehensive loss increased to $390.4 million as of August 31, 2024, from $388.6 million as of November 30, 2023[9] - The company recognized a gain of $2.4 million from cross currency contracts for the nine months ended August 31, 2024[48]

Sales Performance - Sales in Q3 2024 were comparable to the year-ago period, with a volume growth of 1% partially offset by pricing[1]. - Consumer segment sales were comparable to Q3 2023, with a 1% increase in volume growth fully offset by a 1% decrease from pricing[11]. - Flavor Solutions segment sales declined 1% from Q3 2023, with operating income excluding special charges growing 31% compared to the year-ago period[14][16]. - Total net sales for the three months ended August 31, 2024, showed a slight decline of 0.3% as reported, but a 0.1% increase on a constant currency basis[21]. - The Flavor Solutions segment experienced a reported decline of 0.7% in net sales for the three months ended August 31, 2024, but a 0.2% increase on a constant currency basis[21]. Income and Earnings - Operating income increased to $287 million in Q3 2024, up from $245 million in Q3 2023, with adjusted operating income at $288 million compared to $251 million[1][6]. - Earnings per share rose to $0.83 in Q3 2024, compared to $0.63 in the year-ago period, with adjusted earnings per share also at $0.83 versus $0.65[7]. - Net income for the three months ended August 31, 2024, was $223.1 million, representing a 28.3% increase from $170.1 million in the same period last year[19]. - Adjusted earnings per share for the three months ended August 31, 2024, was $0.83, a 27.7% increase compared to $0.65 in the prior year[19]. - The company projects diluted earnings per share for 2024 to be between $2.81 and $2.86, compared to $2.52 for the year ended November 30, 2023[23]. Financial Projections - For fiscal year 2024, McCormick expects sales to range between (1)% to 1% compared to 2023, with operating income projected to grow by 9% to 11% from $963 million in 2023[8][9]. - The company anticipates 2024 earnings per share to be in the range of $2.81 to $2.86, compared to $2.52 in 2023, representing an expected increase of 5% to 7%[10]. - For the nine months ended August 31, 2024, adjusted operating income increased by 6.9% compared to the same period in 2023[22]. - The company anticipates continued growth driven by brand marketing support, product innovation, and expansion in various markets[25]. Cash Flow and Assets - Net cash provided by operating activities through Q3 2024 was $463 million, down from $660 million in the same period of 2023[7]. - Cash and cash equivalents at the end of the period were $154.7 million, reflecting a decrease of $701.2 million during the period[36]. - The company reported net cash flow provided by operating activities of $463.2 million, down from $660.1 million in the prior year[34]. - Total assets as of August 31, 2024, were $13,204.9 million, up from $12,862.3 million a year earlier[32]. - Total liabilities decreased slightly to $7,753.9 million from $7,778.8 million in the previous year[33]. Profitability Metrics - Gross profit margin expanded by 170 basis points year-over-year, driven by favorable mix and cost savings from the Comprehensive Continuous Improvement program[6]. - Gross profit increased to $649.9 million, resulting in a gross profit margin of 38.7%, up from 37.0% in the prior year[31]. - Adjusted operating income for the three months ended August 31, 2024, was $288.4 million, a 14.9% increase compared to $251.1 million for the same period in 2023[19]. - The adjusted operating income margin for the three months ended August 31, 2024, was 17.2%, up from 14.9% in the prior year[19]. - Operating income rose to $286.5 million compared to $245.0 million in the same quarter last year[31]. Strategic Initiatives - The company plans to host its Investor Day on October 22, 2024, to share its strategic roadmap and long-term objectives[2]. - The impact of foreign currency exchange rates has been noted as a significant factor affecting reported results, with adjustments made for constant currency comparisons[20]. - Capital expenditures for the nine months ended August 31, 2024, were $189.3 million, compared to $187.2 million in the same period last year[35].

Financial Performance - Net sales for the three months ended May 31, 2024, were $1,643.2 million, a slight decrease of 1.0% compared to $1,659.2 million in the same period of 2023[11] - Gross profit for the six months ended May 31, 2024, increased to $1,218.9 million, up 3.4% from $1,178.4 million in 2023[11] - Operating income for the three months ended May 31, 2024, was $234.1 million, representing an increase of 5.2% from $221.8 million in 2023[11] - Net income for the six months ended May 31, 2024, rose to $350.2 million, a 20.2% increase compared to $291.2 million in 2023[11] - Earnings per share (diluted) for the three months ended May 31, 2024, were $0.68, up from $0.56 in the same period of 2023, reflecting a 21.4% increase[11] - Net income for the three months ended May 31, 2024, was $184.2 million, compared to $152.1 million for the same period in 2023, representing a 21.1% increase[21] - For the six months ended May 31, 2024, net income totaled $350.2 million, compared to $291.2 million for the same period in 2023, marking a 20.2% increase[22] - Operating income for the first half of 2024 was $467.6 million, up from $420.8 million in the first half of 2023, indicating a strong performance[81] Dividends and Shareholder Returns - Cash dividends declared per share for the six months ended May 31, 2024, were $0.42, compared to $0.39 in 2023, marking a 7.7% increase[11] - Dividends paid during the three months ended May 31, 2024, totaled $112.7 million, consistent with the same amount paid in the previous year[21] - The company paid dividends of $112.7 million in both the three and six months ended May 31, 2024, consistent with the previous year[21] - As of May 31, 2024, the company had $497.0 million remaining from the $600 million share repurchase program authorized in November 2019[73] Assets and Liabilities - Total assets as of May 31, 2024, were $12,987.6 million, an increase from $12,862.3 million as of November 30, 2023[15] - Total liabilities decreased to $7,633.4 million as of May 31, 2024, down from $7,778.8 million as of November 30, 2023[15] - Total shareholders' equity increased from $5,257.4 million on February 29, 2024, to $5,354.2 million on May 31, 2024, reflecting a growth of 1.8%[21] Special Charges and Cost Management - Special charges for the three months ended May 31, 2024, amounted to $1.8 million, a decrease from $13.2 million in the same period of 2023[35] - The company recorded $6.0 million in special charges for the six months ended May 31, 2024, down from $41.0 million for the same period in 2023[38] - Special charges for the six months ended May 31, 2024, totaled $6.0 million, significantly lower than $41.0 million for the same period in 2023, indicating a reduction of 85.4%[36] - The company reported a decrease in special charges from $13.2 million in Q2 2023 to $1.8 million in Q2 2024, highlighting improved operational efficiency[81] Cash Flow and Capital Expenditures - The company reported net cash flow provided by operating activities of $301.5 million for the six months ended May 31, 2024, compared to $394.2 million in 2023[19] - Capital expenditures for the six months ended May 31, 2024, were $130.3 million, an increase from $118.6 million in 2023[19] Segment Performance - The consumer segment reported net sales of $904.5 million for the three months ended May 31, 2024, down from $912.1 million in the same period of 2023[80] - The flavor solutions segment achieved net sales of $738.7 million for the three months ended May 31, 2024, compared to $747.1 million in the same period of 2023[80] - Net sales in the Americas for the six months ended May 31, 2024, were $2,283.5 million, slightly up from $2,272.5 million in the same period last year[82] - EMEA net sales for the first half of 2024 were $614.0 million, an increase from $594.6 million in the first half of 2023, indicating growth in that region[82] - APAC net sales decreased to $348.4 million in the first half of 2024 from $357.6 million in the same period last year, reflecting challenges in that market[82] Financial Instruments and Risk Management - The company utilizes derivative financial instruments to manage risks related to foreign currency and interest rates, with all derivatives designated as hedges[43] - The notional amount of outstanding foreign currency exchange contracts as of May 31, 2024, was $939.6 million, down from $1,000.4 million as of November 30, 2023[45] - Interest rate derivative contracts had a notional amount of $600 million in liabilities as of May 31, 2024, with a fair value of $53.8 million[48] Tax and Pension Contributions - The company recognized $19.4 million in tax benefits related to a deferred tax asset from an international legal entity reorganization for the six months ended May 31, 2024[69] - The company contributed $3.5 million to pension plans during the six months ended May 31, 2024, slightly down from $3.6 million in the prior year[62] - The total contributions to pension plans in fiscal year 2023 were $9.2 million[62] Stock Options and Compensation - The number of outstanding stock options increased to 6.2 million as of May 31, 2024, from 5.5 million in the same period of 2023[65] - The weighted-average grant-date fair value of stock options granted in 2024 was $17.63, compared to $19.35 in 2023[65] - The intrinsic value of all options outstanding as of May 31, 2024, was $43.0 million[66] - Stock-based compensation for the three months ended May 31, 2024, was $19.4 million, compared to $26.7 million for the same period in 2023, indicating a decrease of 27.3%[21]

Sales Performance - McCormick reported a 1% sales decline in Q2 2024 compared to the same period last year, with operating income increasing to $234 million from $222 million[4]. - The Consumer segment's net sales decreased by 1% to $904.5 million, while the Flavor Solutions segment's sales also declined by 1% to $738.7 million[18][21]. - The total net sales for the three months ended May 31, 2024, decreased by 1.0% as reported, with a constant currency basis showing no change[32]. - McCormick reported net sales of $1,643.2 million for the three months ended May 31, 2024, a decrease of 1.1% compared to $1,659.2 million for the same period in 2023[44]. Earnings and Income - Adjusted earnings per share rose to $0.69 in Q2 2024, up from $0.60 in the prior year, primarily due to a discrete tax benefit and strong performance from McCormick de Mexico[11]. - The diluted earnings per share for the three months ended May 31, 2024, increased by 15.0% to $0.68, compared to $0.56 in the same period last year[28]. - Net income for the second quarter of 2024 was $184.2 million, compared to $152.1 million in the same quarter of 2023, representing a year-over-year increase of 21.1%[44]. - The company reported a 14.5% increase in adjusted net income for the three months ended May 31, 2024, reaching $185.6 million compared to $162.1 million in the prior year[28]. Operating Income - Operating income for the Flavor Solutions segment grew by 6% to $86.6 million, driven by pricing actions and cost savings initiatives[22]. - For the three months ended May 31, 2024, adjusted operating income was $235.9 million, a slight increase of 0.3% compared to $235.0 million in the same period last year[28]. - The Flavor Solutions segment reported a 6.3% increase in adjusted operating income for the six months ended May 31, 2024[33]. Financial Outlook - McCormick expects 2024 sales to range from -2% to 0% compared to 2023, with an anticipated operating income growth of 8% to 10% from $963 million in 2023[14][15]. - The company projects 2024 earnings per share to be between $2.76 and $2.81, reflecting an increase from $2.52 in 2023[16]. - The company projects a percentage change in net sales for the year ending November 30, 2024, to be between -2% to 0%[34]. - Adjusted operating income is expected to increase by 3% to 5% for the year ending November 30, 2024, with a constant currency increase projected at 4% to 6%[34]. Cash Flow and Assets - Net cash provided by operating activities was $302 million in Q2 2024, down from $394 million in Q2 2023, mainly due to higher incentive compensation payments[12]. - The company reported net cash flow provided by operating activities of $301.5 million for the second quarter of 2024, compared to $394.2 million for the same period in 2023[46]. - Total assets as of May 31, 2024, were $12,987.6 million, an increase from $12,862.3 million as of November 30, 2023[45]. - Total liabilities decreased to $7,633.4 million as of May 31, 2024, down from $7,778.8 million as of November 30, 2023[45]. Profitability Metrics - Gross profit margin expanded by 60 basis points year-over-year, attributed to cost savings from the Comprehensive Continuous Improvement program[8]. - Gross profit margin improved to 37.7% for the second quarter of 2024, up from 37.1% in the same quarter of 2023[44]. - The income tax rate for the six months ended May 31, 2024, was 19.5%, down from 21.9% in the same period last year[28]. Strategic Initiatives - McCormick plans to host its Investor Day on October 22, 2024, to discuss long-term strategy and financial outlook[17]. - The company remains focused on brand marketing, new products, and proprietary technology to drive volume growth in the second half of 2024[5]. - The company continues to focus on driving sustainable growth through its Consumer and Flavor Solutions segments, leveraging scale, insights, and technology[41]. - McCormick's capital expenditures for the second quarter of 2024 were $130.3 million, compared to $118.6 million in the same quarter of 2023[46]. Currency Impact - The company noted that foreign currency exchange had a 1% unfavorable impact on net sales projections for the upcoming year[34].