Release date -27062024
Sales declined 1% in the second quarter from the year-ago period. In constant currency, sales also declined 1%. These comparisons reflect volume growth in Consumer, offset by volume declines in Flavor Solutions.
Operating income was
Earnings per share was
For fiscal year 2024, McCormick reaffirmed its sales, operating profit, and adjusted earnings per share outlook.
President and CEO's Remarks
'As we look ahead, we will continue to prioritize our investments in key categories and execute on the initiatives within our growth levers, including brand marketing, new products and packaging, category management, and proprietary technology. Notably, we expect our innovation pipeline across both segments combined with our brand marketing initiatives to accelerate our return to total volume growth. In addition, we remain well positioned with our cost savings initiatives to fuel investments as well as generate operating margin expansion. Our results for the first half of the year coupled with our growth plans, support our continued confidence in achieving the mid to high-end of our projected constant currency sales growth for 2024.
'Overall, we are confident in the sustained trajectory of our business, and in our ability to deliver on our 2024 outlook and long-term financial objectives. Our commitment is underpinned by our proven track record, our broad and advantaged global portfolio, our focus on high growth, profitable categories, our alignment with consumer trends, as well as our differentiated heat platform. Our business fundamentals are strong, and we expect to continue to deliver profitable growth and drive value for shareholders.'
'Lastly, I would like to express my gratitude to McCormick employees around the world, as they remain the cornerstone of our success. Their dedication, ongoing contributions, and the momentum they are driving into the business continue to energize me. Importantly, as a leadership team, we remain committed to elevating our power of people culture and to building the next generation of leaders and capabilities that will drive our success well into the future.'
Second Quarter 2024 Results
McCormick reported a 1% sales decline in the second quarter from the year-ago period with minimal impact from currency. This decline includes the impact of the Company's strategic decision to divest a small canning business and reflects a 1% volume decline attributable to lower customer demand and the timing of customer activities in the Company's Flavor Solutions segment, which more than offset volume growth in the Consumer segment.
Gross profit margin expanded 60 basis points versus the second quarter of last year. This expansion was driven by cost savings led primarily by the Company's Comprehensive Continuous Improvement (CCI) program. Selling, general, and administrative expenses increased from the year-ago period driven by increases in brand marketing, partially offset by CCI-led cost savings.
Operating income increased to
Income tax expense for the quarter included
Earnings per share was
Net cash provided by operating activities through the second quarter of 2024 was
Fiscal Year 2024 Financial Outlook
McCormick's 2024 outlook reflects the Company's commitment to strengthen volume trends and prioritize investments to drive profitable results and return to differentiated volume-led growth as the year progresses. The Company's CCI and GOE programs are fueling growth investments while also driving operating margin expansion. Currency rates are expected to unfavorably impact sales, adjusted operating income and adjusted earnings per share by approximately 1%.
In 2024, McCormick expects sales to range between (2)% to 0% compared to 2023, or (1)% to 1% on a constant currency basis. The Company expects a favorable impact from the prior year's pricing actions. Through the power of its brands and its targeted investments, the Company expects to improve volume trends as the year progresses and return to volume growth, absent any new macroeconomic headwinds. The Company's strategic decisions in 2023 to discontinue low margin business and divest a small canning business will impact volume growth in 2024.
Operating income in 2024 is expected to grow by 8% to 10% from
McCormick projects 2024 earnings per share to be in the range of
2024 Investor Day
The Company plans to host its Investor Day on
Business Segment Results: See full release at:
https://mccormickcorporation.gcs-web.com/news-releases/news-release-details/mccormick-reports-second-quarter-performance-reaffirms-2024
SOURCE
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