Sales declined 1% in the second quarter from the year-ago period and, in constant currency, sales were comparable to the year-ago period. Both comparisons reflect strong underlying sales growth offset by the impact of discrete items, including the impact of COVID-related lockdowns in
Operating income was
Earnings per share was
For fiscal year 2022, McCormick updated its sales, operating income, and earnings per share outlook.
Chairman and CEO's Remarks
'We anticipated the profit driven by sales growth in the second quarter would be more than offset by higher inflation and broad-based supply chain challenges, and the impact was greater than expected due to continuing cost escalation. We expect our pricing actions and other levers to begin to outpace cost pressures in the second half of this year and to fully offset the cost pressures over time. The strength of our business model, the value of our products and capabilities, and the successful execution of our long-term strategies give us confidence in our robust sales growth momentum and in our ability to successfully navigate the challenging dynamic global environment.
'We continue to capitalize on the long-term consumer trends that accelerated during the pandemic, including the sustained shift to cooking more at home, increased digital engagement, clean and flavorful eating, and trusted brands. Our alignment with these trends, in combination with the breadth and reach of our portfolio and our strategic investments provide a strong foundation for sustainable growth. The long-term fundamentals that drove our industry-leading historical performance remain strong and our experienced leaders are executing on our proven strategies while adapting to changes accordingly.
'I want to recognize McCormick employees around the world as they drive our momentum and success. With our vision to stand together for flavor and our relentless focus on growth, performance, and people, we are confident we are well positioned to deliver strong performance in 2022 and beyond while driving sustainable long-term value for our shareholders.'
Second Quarter 2022 Results
McCormick reported a 1% sales decline in the second quarter from the year-ago period, including a 1% unfavorable impact from currency. Constant currency sales were comparable to last year, reflecting 7% growth from pricing actions offset by a 7% decline in volume and product mix. The volume and product mix decline included a negative 4% impact related to discrete items including lapping last year's second quarter
Comparisons to prior years remain difficult due to the dramatic shifts in consumer consumption between at-home and away-from-home experienced in the second quarter of the last two years. Using 2019 as a pre-pandemic baseline, second quarter sales have grown at a constant currency compounded annual growth rate (CAGR) of 6% for the total Company, reflecting 4% growth in the Consumer segment and 8% growth in the Flavor Solutions segment.
Higher material and transportation cost inflation, as well as unfavorable product mix, partially offset by pricing actions and cost savings led by the Company's Comprehensive Continuous Improvement (CCI) program, resulted in a decline in gross profit margin of 550 basis points. Operating income was
Earnings per share was
Year-to-date net cash provided by operating activities was
Fiscal Year 2022 Financial Outlook
McCormick's broad and advantaged global flavor portfolio enables the Company to meet the rising demand for flavor around the world. The Company is capitalizing on the growing consumer interests in healthy and flavorful cooking, digital engagement, trusted brands, and purpose-minded practices. This, coupled with the breadth and reach of McCormick's portfolio and its effective strategies, sustainably position the Company to continue on its growth trajectory.
For fiscal year 2022, McCormick updated its financial outlook to reflect a more unfavorable impact of foreign currency rates, the impact of higher cost pressures and the related pricing actions, the unfavorable impact of significant disruption in
The Company expects foreign currency rates in 2022 to unfavorably impact net sales, adjusted operating income and adjusted earnings per share by two-percentage points. This compares to the Company's previous guidance of an unfavorable one-percentage point impact.
In 2022, the Company expects to grow sales 3% to 5% compared to 2021, which in constant currency is expected to be 5% to 7%. This compares to the Company's previous projection of 3% to 5%, or 4% to 6% in constant currency. McCormick expects sales growth to be driven by pricing actions, which, in conjunction with cost savings, are expected to offset inflationary pressures over time. McCormick also plans to drive continued growth through the strength of its brands, as well as brand marketing, new products, category management, and differentiated customer engagement.
Operating income in 2022 is expected to grow 4% to 6% from
McCormick projects 2022 earnings per share to be in the range of
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