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].
McCormick(MKC_V) - 2024 Q2 - Quarterly Results