Financial Performance - Net sales increased by 1% in Q2 2025, with organic sales growth of 2% driven by volume, despite a 1% unfavorable impact from currency[4] - Operating income for Q2 2025 was $246 million, up from $234 million in the same period last year, with adjusted operating income at $259 million compared to $236 million[9] - Earnings per share (EPS) was $0.65 in Q2 2025, down from $0.68 in Q2 2024; adjusted EPS remained stable at $0.69[10] - The Consumer segment net sales increased by 3% to $931 million, while the Flavor Solutions segment net sales decreased by 1% to $729 million[12] - Net income for the three months ended May 31, 2025, was $175.0 million, a decrease of 0.4% compared to $184.2 million in the same period last year[21] - Net income for the second quarter was $175.0 million, a decrease of 5.2% from $184.2 million year-over-year[40] - Total net sales for the three months ended May 31, 2025, increased by 1.0%, with a constant currency growth of 1.6%[26] - McCormick reported net sales of $1,659.5 million for the three months ended May 31, 2025, a 1.1% increase from $1,643.2 million in the same period last year[40] Outlook and Projections - The company reaffirmed its fiscal 2025 outlook, expecting net sales growth of 0% to 2% and adjusted operating income growth of 3% to 5%[15] - The company projects a percentage change in net sales for the year ending November 30, 2025, to be between 0% to 2%[30] - Adjusted operating income is expected to increase by 3% to 5% for the year ending November 30, 2025[30] - The impact of unfavorable foreign currency exchange is projected to be 1% on net sales and adjusted operating income for the year ending November 30, 2025[30] Cost and Margin Analysis - Gross profit margin contracted by 20 basis points to 37.5% due to increased capacity costs and higher commodity prices[8] - McCormick's Comprehensive Continuous Improvement (CCI) program is driving cost savings and operational efficiencies, contributing to margin expansion[11] - Gross profit for the second quarter was $622.8 million, with a gross profit margin of 37.5%, slightly down from 37.7% in the prior year[40] Special Charges and Currency Impact - Special charges are expected to impact EPS by $0.05 in 2025, primarily related to organizational and streamlining actions[15] - The company expects foreign currency rates to unfavorably impact net sales by 1% and adjusted earnings per share by 2%[16] Income and Tax Rates - Adjusted operating income for the six months ended May 31, 2025, was $483.8 million, reflecting a 2.2% increase from $473.6 million in the prior year[21] - The adjusted income tax rate for the three months ended May 31, 2025, was 24.1%, significantly higher than 13.5% in the same period last year[21] Assets and Liabilities - Total assets increased to $13,190.4 million as of May 31, 2025, compared to $13,070.3 million at the end of November 2024[41] - Total liabilities decreased to $7,560.0 million from $7,753.5 million in the previous reporting period[41] Cash Flow and Inventory - Cash and cash equivalents at the end of the period were $124.1 million, down from $186.1 million at the beginning of the period[42] - The company reported a net cash flow provided by operating activities of $161.4 million for the six months ended May 31, 2025, compared to $301.5 million in the prior year[42] - McCormick's inventories increased to $1,307.5 million from $1,239.9 million, indicating a rise in stock levels[41]
McCormick(MKC_V) - 2025 Q2 - Quarterly Results