McCormick(US:MKC)2025-10-07 20:21Financial Performance - Net sales for the three months ended August 31, 2025, were $1,724.9 million, an increase from $1,679.8 million in the same period of 2024, representing a growth of 2.7%[11] - Gross profit for the nine months ended August 31, 2025, was $1,871.9 million, slightly up from $1,868.8 million in 2024, indicating a stable performance[11] - Operating income for the three months ended August 31, 2025, was $288.7 million, compared to $286.5 million in 2024, reflecting a growth of 0.8%[11] - Net income for the nine months ended August 31, 2025, was $562.8 million, down from $573.3 million in 2024, showing a decrease of 1.0%[12] - Earnings per share (diluted) for the three months ended August 31, 2025, was $0.84, consistent with $0.83 in the same period of 2024[11] - Comprehensive income for the three months ended August 31, 2025, was $267.4 million, compared to $223.0 million in 2024, representing an increase of 19.9%[13] - For the three months ended August 31, 2025, net income was $225.5 million, compared to $223.1 million for the same period in 2024, reflecting a growth of 1.1%[19] - For the nine months ended August 31, 2025, net income was $562.8 million, up from $573.3 million for the same period in 2024, showing a decrease of 1.0%[19] Dividends and Shareholder Returns - Cash dividends declared per share for the nine months ended August 31, 2025, increased to $0.90 from $0.84 in 2024, marking a rise of 7.1%[11] - The company paid dividends totaling $120.7 million in the three months ended August 31, 2025, compared to $112.9 million in the same period in 2024, reflecting a 6.2% increase[19] - Cash dividends paid per share increased to $1.35 for the nine months ended August 31, 2025, compared to $1.26 in 2024, reflecting a growth of 7.1%[11] - As of August 31, 2025, the company had $419 million remaining from the $600 million share repurchase program authorized in November 2019[77] Assets and Liabilities - Total assets as of August 31, 2025, were $13,247.0 million, up from $13,070.3 million as of November 30, 2024, indicating a growth of 1.4%[15] - Total liabilities decreased to $7,463.4 million as of August 31, 2025, from $7,753.5 million as of November 30, 2024, a reduction of 3.7%[15] - Cash and cash equivalents decreased to $94.9 million as of August 31, 2025, from $186.1 million at the end of November 2024[15] - The carrying amount of long-term debt was $3,862.2 million, with a total fair value of $3,714.3 million as of August 31, 2025[61] Special Charges and Costs - The company recorded special charges of $4.9 million for the three months ended August 31, 2025, compared to $1.9 million for the same period in 2024, indicating a significant increase in restructuring costs[33] - The company incurred special charges of $3.9 million for the three months ended August 31, 2025, compared to $1.9 million in 2024, indicating an increase in restructuring or other one-time costs[11] - The company recorded a total of $16.7 million in special charges for the nine months ended August 31, 2025, compared to $7.9 million for the same period in 2024, representing an increase of approximately 111.4%[33] - Special charges for the Consumer segment were $3.1 million for the three months ended August 31, 2025, compared to $0.5 million in 2024, and $10.9 million for the nine months ended August 31, 2025, compared to $3.8 million in 2024[43] Cash Flow - Net cash flow provided by operating activities for the nine months ended August 31, 2025, was $420.2 million, down from $463.2 million in 2024, reflecting a decrease of 9.3%[18] - The company anticipates that net sales, net income, and cash flow from operations will be lower in the first half of the fiscal year and higher in the second half, consistent with historical trends[24] Segment Performance - The Consumer segment generated net sales of $973.2 million for the three months ended August 31, 2025, up from $937.4 million in 2024, marking a growth of 3.0%[83] - The Flavor Solutions segment reported net sales of $751.7 million for the three months ended August 31, 2025, compared to $742.4 million in 2024, indicating a growth of 1.8%[83] - For the nine months ended August 31, 2025, total net sales reached $4,989.9 million, an increase from $4,925.7 million in the same period of 2024, representing a growth of 1.3%[83] Tax Benefits - The company recorded $27.6 million in net discrete tax benefits for the nine months ended August 31, 2025, primarily from the reversal of certain reserves and state tax matters[71] - The company recognized $20.0 million in net discrete tax benefits for the three months ended August 31, 2025, primarily from the reversal of certain reserves and state tax matters[70] Organizational Changes and Efficiency - The company continues to evaluate changes to its organizational structure to reduce fixed costs and improve competitiveness, indicating a focus on operational efficiency[34] Acquisitions and Integration - The company acquired substantially all assets of Jurado, Inc. for approximately $38.1 million, with $32.3 million allocated to tangible assets, $2.7 million to other intangible assets, and $3.1 million to goodwill[40] - Transaction and integration costs for the three months ended August 31, 2025, amounted to $1.9 million, including $1.0 million related to the step-up of acquired Jurado inventory[41] - For the nine months ended August 31, 2025, transaction and integration costs totaled $2.7 million, with expectations of approximately $4.0 million for the fiscal year 2025[42] Stock-Based Compensation - Stock-based compensation for the three months ended August 31, 2025, was $7.7 million, compared to $8.8 million for the same period in 2024, indicating a decrease of 12.5%[19] - The number of outstanding stock options decreased from 6.1 million at the beginning of the period to 5.6 million by August 31, 2025[67] - The total intrinsic value of all options exercised during the nine months ended August 31, 2025, was $9.2 million, compared to $8.4 million in 2024[67] - As of August 31, 2025, there were 774,000 restricted stock units (RSUs) outstanding, with a weighted average grant-date fair value of $73.27[68] - The company had 472,000 long-term performance plan (LTPP) shares outstanding as of August 31, 2025, with a weighted average grant-date fair value of $79.98[69] Other Comprehensive Income - Other comprehensive income for the three months ended August 31, 2025, was $39.7 million, compared to a loss of $2.2 million in the same period of 2024, showing a significant improvement[19] - The accumulated other comprehensive loss decreased by $133.6 million during the nine months ended August 31, 2025, including $51.6 million of unrealized losses associated with net investment hedges[78]