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]
McCormick(MKC_V) - 2025 Q1 - Quarterly Report