HUNT
VALLEY, Md., March 26,
2024 /PRNewswire/ -- McCormick & Company,
Incorporated (NYSE:MKC), a global leader in flavor, today reported
financial results for the first quarter ended February 29, 2024 and reaffirmed fiscal 2024
outlook.
- Sales increased 3% in the first quarter from the year-ago
period. In constant currency, sales grew 2% compared to the prior
year.
- Operating income was $234
million in the first quarter compared to $199 million in the year-ago period. Adjusted
operating income was $238 million, a
5% increase from $227 million in the
year-ago period.
- Earnings per share was $0.62
in the first quarter as compared to $0.52 in the year-ago period. Adjusted earnings
per share was $0.63 compared to
$0.59 in the year-ago period,
reflecting a 7% increase year-over-year.
- Cash flow from operations through the first quarter of 2024
was $138 million compared to
$103 million in the year-ago
period.
- For fiscal year 2024, McCormick reaffirmed its sales,
operating profit, and adjusted earnings per share outlook.
President and CEO's Remarks
Brendan M. Foley, President and
CEO, stated, "We are pleased to start the year with strong first
quarter performance, which reflects the early success of our
prioritized investments to drive impactful results. We drove
sequential improvement in volumes in our Consumer and Flavor
Solutions segments. We remain confident in the sustained trajectory
of our business, and in our ability to deliver on our 2024 outlook
and our long-term financial objectives.
"Our commitment to deliver on our long-term objectives 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. We continue to prioritize investments in key
categories and executing on the initiatives within our growth
levers, including brand marketing, new products and packaging,
category management, and proprietary technology. We are well
positioned with our cost savings programs to fuel investments as
well as generate operating margin expansion.
"As we look ahead, we are pleased with the momentum we are
seeing in the business and continue to expect improved volume
performance, which will build throughout the year. Our results for
the quarter coupled with our growth plans, give us confidence in
achieving the mid to high-end of our projected constant currency
sales growth for 2024. Our business fundamentals are strong, and we
are confident we will continue to deliver long-term profitable
growth and drive value for shareholders.
"Lastly, I want to recognize McCormick employees, as they remain
the cornerstone of our success. I am grateful for and energized by
both their ongoing contributions and the results that they are
driving. Importantly, 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 future
years."
First Quarter 2024 Results
McCormick reported 3% sales growth in the first quarter from the
year-ago period, including a 1% favorable impact from currency.
Constant currency sales growth reflected a 3% increase from pricing
actions, partially offset by a 1% volume and mix decline
attributable to the Company's strategic decisions to discontinue
low margin business and divest a small canning business. Underlying
volume and product mix was flat compared to the first quarter of
the prior year.
Gross profit margin expanded 140 basis points versus the first
quarter of last year. This expansion was driven by favorable
product mix, cost savings led by the Company's Comprehensive
Continuous Improvement (CCI) and Global Operating Effectiveness
(GOE) programs, and pricing actions that were partially offset by
cost inflation. Selling, general, and administrative expenses
increased from the year-ago period driven by increases in brand
marketing as well as research and development investments,
partially offset by CCI-led and GOE cost savings.
Operating income increased to $234
million in the first quarter of 2024 compared to
$199 million in the first quarter of
2023. Excluding special charges, adjusted operating income was
$238 million in the first quarter of
2024 compared to $227 million in the
year-ago period. In constant currency, adjusted operating income
increased 4% from the year-ago period driven by our sales
performance and gross margin expansion partially offset by higher
selling, general, and administrative expenses.
Earnings per share was $0.62 in
the first quarter of 2024 compared to $0.52 in the year-ago period. Special charges
lowered earnings per share by $0.01
in the first quarter of 2024 and by $0.07 in the prior year period. Excluding these
special charges, adjusted earnings per share was $0.63 in the first quarter of 2024 compared to
$0.59 in the year-ago period. This
increase was driven by higher adjusted operating income, higher
income from unconsolidated operations driven by strong performance
by the Company's largest joint venture, McCormick de Mexico, partially offset by a higher adjusted
effective tax rate.
Net cash provided by operating activities through the first
quarter of 2024 was $138 million
compared to $103 million through the
first quarter of 2023. The increase was primarily driven by higher
operating income and working capital improvements.
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
$963 million in 2023. The Company
anticipates approximately $15 million
of special charges in 2024 that relate to previous organizational
and streamlining actions. Excluding the impact of special charges
in 2024 and 2023, adjusted operating income is expected to increase
3% to 5%, or in constant currency 4% to 6%, driven by gross margin
expansion partially offset by a significant increase in brand
marketing investments.
McCormick projects 2024 earnings per share to be in the range of
$2.76 to $2.81, compared to $2.52 of earnings per share in 2023. The Company
expects special charges to lower earnings per share by $0.04 in 2024. Excluding these impacts in 2024
and 2023, the Company projects 2024 adjusted earnings per share to
be in the range of $2.80 to
$2.85, compared to $2.70 of adjusted earnings per share in 2023,
which represents an expected increase of 4% to 6%, or in constant
currency 5% to 7%. For fiscal 2024, the Company expects strong cash
flow driven by profit and working capital initiatives and
anticipates returning a significant portion of cash flow to
shareholders through dividends.
Business Segment Results
Consumer Segment
(in
millions)
|
|
Three months
ended
|
|
|
2/29/2024
|
|
2/28/2023
|
Net sales
|
|
$
921.5
|
|
$
909.5
|
Operating income,
excluding special charges
|
|
176.3
|
|
173.4
|
Consumer segment sales increased 1% from the first quarter of
2023, with minimal currency impact, reflecting a 3% increase from
pricing actions partially offset by lower volume of 2%. The lower
volume includes a 1% decline attributable to the Company's
strategic decisions to discontinue low margin business. The
remaining volume decline was attributable to a slower economic
recovery in China and volume
declines in prepared food categories, including Frozen and Asian,
in the Americas.
- Consumer sales in the Americas was comparable to the first
quarter of 2023 with minimal impact from currency. Pricing actions
were offset by a 3% decline in volume and product mix. This decline
was attributable to a 1% decline related to the discontinuation of
business to drive margin improvement and volume declines in
prepared food categories.
- Consumer sales in Europe,
Middle East and Africa (EMEA) increased 13% compared to the
year-ago period. In constant currency, sales grew 8% with a 5%
increase from pricing actions and a 3% increase from higher volume
and product mix. In major markets, volume growth was broad based
across product categories.
- Consumer sales in the Asia-Pacific region (APAC) decreased 7%
compared to the year-ago period. In constant currency, sales
declined 5% with a 6% volume decline partially offset by a 1%
increase from pricing actions. The volume decline was driven by
slower demand in China, related to
the macro environment.
Consumer segment operating income, excluding special charges,
increased 2% in the first quarter of 2024 compared to the year-ago
period with minimal impact from currency. Pricing actions, cost
savings, lower distribution costs, and product mix were partially
offset by lower volume and higher brand marketing investments.
Flavor Solutions Segment
(in
millions)
|
|
Three months
ended
|
|
|
2/29/2024
|
|
2/28/2023
|
Net sales
|
|
$
681.2
|
|
$
656.0
|
Operating income,
excluding special charges
|
|
61.4
|
|
53.4
|
Flavor Solutions segment sales increased 4% from the first
quarter of 2023. In constant currency, sales increased 2% including
a 1% decline from the canning business divestiture. This increase
reflects a 2% increase from pricing actions and a 1% increase from
volume, partially offset by the Company's strategic decisions to
discontinue low margin business.
- In the Americas, Flavor Solutions sales rose 5% compared to the
first quarter of 2023. In constant currency, sales increased 3%,
reflecting a 2% increase from pricing actions and 1% growth in
volume and product mix. Volume growth was driven by the flavors and
branded foodservice product categories.
- The EMEA region's Flavor Solutions sales grew 2% compared to
the first quarter of 2023. In constant currency, sales decreased 1%
including a 3% decline from the canning divestiture. Pricing
actions of 4% were partially offset by a 2% decline in volume,
primarily attributable to the pruning of low margin business.
- The APAC region's Flavor Solutions sales increased 2% compared
to the first quarter of 2023. In constant currency, sales grew 5%
reflecting a 4% increase from pricing actions and 1% growth in
volume and product mix.
Flavor Solutions segment operating income,
excluding special charges, grew 15% in the first quarter of
2024 compared to the year-ago period, or 14% in constant currency.
This increase was driven by pricing actions, higher volume,
favorable product mix, and cost savings, partially offset by the
impact of higher research and development, selling, and
distribution costs.
Non-GAAP Financial Measures
The following tables include financial measures of adjusted
operating income, adjusted operating income margin, adjusted income
tax expense, adjusted income tax rate, adjusted net income and
adjusted diluted earnings per share. These represent non-GAAP
financial measures, which are prepared as a complement to our
financial results prepared in accordance with United States generally accepted accounting
principles. These financial measures exclude the impact of the
special charges.
Special charges consist of expenses and income, as applicable,
associated with certain actions undertaken by the Company to reduce
fixed costs, simplify or improve processes, and improve our
competitiveness and are of such significance in terms of both
up-front costs and organizational/structural impact to require
advance approval by our Management Committee. Expenses associated
with the approved actions are classified as special charges upon
recognition and monitored on an on-going basis through
completion.
We believe that these non-GAAP financial measures are important.
The exclusion of the items noted above provides additional
information that enables enhanced comparisons to prior periods and,
accordingly, facilitates the development of future projections and
earnings growth prospects. This information is also used by
management to measure the profitability of our ongoing operations
and analyze our business performance and trends.
These non-GAAP financial measures may be considered in addition
to results prepared in accordance with GAAP, but they should not be
considered a substitute for, or superior to, GAAP results. In
addition, these non-GAAP financial measures may not be comparable
to similarly titled measures of other companies because other
companies may not calculate them in the same manner that we do. We
intend to continue to provide these non-GAAP financial measures as
part of our future earnings discussions and, therefore, the
inclusion of these non-GAAP financial measures will provide
consistency in our financial reporting. A reconciliation of these
non-GAAP financial measures to the related GAAP financial measures
is provided below:
(in millions except per
share data)
|
Three Months
Ended
|
|
2/29/2024
|
|
2/28/2023
|
Operating
income
|
$
233.5
|
|
$
199.0
|
Impact of special
charges
|
4.2
|
|
27.8
|
Adjusted operating
income
|
$
237.7
|
|
$
226.8
|
% increase versus
year-ago period
|
4.8 %
|
|
|
Operating income
margin (1)
|
14.6 %
|
|
12.7 %
|
Impact of special
charges (1)
|
0.2 %
|
|
1.8 %
|
Adjusted operating
income margin (1)
|
14.8 %
|
|
14.5 %
|
|
|
|
|
Income tax
expense
|
$
49.6
|
|
$
34.4
|
Impact of special
charges
|
1.1
|
|
6.5
|
Adjusted income tax
expense
|
$
50.7
|
|
$
40.9
|
Income tax rate
(2)
|
25.5 %
|
|
21.6 %
|
Impact of special
charges
|
— %
|
|
0.2 %
|
Adjusted income tax
rate (2)
|
25.5 %
|
|
21.8 %
|
|
|
|
|
Net income
|
$
166.0
|
|
$
139.1
|
Impact of special
charges
|
3.1
|
|
21.3
|
Adjusted net
income
|
$
169.1
|
|
$
160.4
|
% increase versus
year-ago period
|
5.4 %
|
|
|
|
|
|
|
Earnings per share -
diluted
|
$
0.62
|
|
$
0.52
|
Impact of special
charges
|
0.01
|
|
0.07
|
Adjusted earnings per
share - diluted
|
$
0.63
|
|
$
0.59
|
% increase versus
year-ago period
|
6.8 %
|
|
|
|
|
(1)
|
Operating income
margin, impact of special charges, and adjusted operating income
margin are calculated as operating income, impact of special
charges, and adjusted operating income as a percentage of net sales
for each period presented.
|
|
|
(2)
|
Income tax rate is
calculated as income tax expense as a percentage of income from
consolidated operations before income taxes. Adjusted income tax
rate is calculated as adjusted income tax expense as a percentage
of income from consolidated operations before income taxes
excluding special charges of $198.5 million and $187.3 million for
the three months ended February 29, 2024, and February 28, 2023,
respectively.
|
Because we are a multi-national company, we are subject to
variability of our reported U.S. dollar results due to changes in
foreign currency exchange rates. Those changes have been volatile
over the past several years. The exclusion of the effects of
foreign currency exchange, or what we refer to as amounts expressed
"on a constant currency basis", is a non-GAAP measure. We believe
that this non-GAAP measure provides additional information that
enables enhanced comparison to prior periods excluding the
translation effects of changes in rates of foreign currency
exchange and provides additional insight into the underlying
performance of our operations located outside of the U.S. It should
be noted that our presentation herein of amounts and percentage
changes on a constant currency basis does not exclude the impact of
foreign currency transaction gains and losses (that is, the impact
of transactions denominated in other than the local currency of any
of our subsidiaries in their local currency reported results).
Percentage changes in sales and adjusted operating income
expressed on a constant currency basis are presented excluding the
impact of foreign currency exchange. To present this information
for historical periods, current period results for entities
reporting in currencies other than the U.S. dollar are translated
into U.S. dollars at the average exchange rates in effect during
the corresponding period of the comparative year, rather than at
the actual average exchange rates in effect during the current
fiscal year. As a result, the foreign currency impact is equal to
the current year results in local currencies multiplied by the
change in the average foreign currency exchange rate between the
current fiscal period and the corresponding period of the
comparative year. Rates of constant currency growth (decline)
follow:
|
|
|
Three Months Ended
February 29, 2024
|
|
|
|
Percentage Change
as Reported
|
|
Impact of Foreign
Currency Exchange
|
|
Percentage Change
on
Constant Currency
Basis
|
Net
sales
|
|
|
|
|
|
|
|
Consumer
Segment
|
|
|
|
|
|
|
|
Americas
|
|
|
0.1 %
|
|
— %
|
|
0.1 %
|
EMEA
|
|
|
13.3 %
|
|
5.1 %
|
|
8.2 %
|
APAC
|
|
|
(7.4) %
|
|
(2.0) %
|
|
(5.4) %
|
Total Consumer
segment
|
|
|
1.3 %
|
|
0.6 %
|
|
0.7 %
|
Flavor Solutions
Segment
|
|
|
|
|
|
|
|
Americas
|
|
|
4.7 %
|
|
1.3 %
|
|
3.4 %
|
EMEA
|
|
|
1.8 %
|
|
3.2 %
|
|
(1.4) %
|
APAC
|
|
|
1.5 %
|
|
(3.0) %
|
|
4.5 %
|
Total Flavor
Solutions segment
|
|
|
3.8 %
|
|
1.3 %
|
|
2.5 %
|
Total
net sales
|
|
|
2.4 %
|
|
0.9 %
|
|
1.5 %
|
Adjusted operating
income
|
|
|
|
|
|
|
|
Consumer
segment
|
|
|
1.7 %
|
|
0.3 %
|
|
1.4 %
|
Flavor
Solutions segment
|
|
|
15.0 %
|
|
1.3 %
|
|
13.7 %
|
Total adjusted
operating income
|
|
|
4.8 %
|
|
0.5 %
|
|
4.3 %
|
To present "constant currency" information for the fiscal year
2024 projection, projected sales and adjusted operating income for
entities reporting in currencies other than the U.S. dollar are
translated into U.S. dollars at the company's budgeted exchange
rates for 2024 and are compared to the 2023 results, translated
into U.S. dollars using the same 2024 budgeted exchange rates,
rather than at the average actual exchange rates in effect during
fiscal year 2023. To estimate the percentage change in adjusted
earnings per share on a constant currency basis, a similar
calculation is performed to arrive at adjusted net income divided
by historical shares outstanding for fiscal year 2023 or projected
shares outstanding for fiscal year 2024, as appropriate.
|
Projections for the
Year Ending November 30, 2024
|
Percentage change in
net sales
|
(2)% to 0%
|
Impact of unfavorable
foreign currency exchange
|
1 %
|
Percentage change in
net sales in constant currency
|
(1)% to 1%
|
|
|
Percentage change in
adjusted operating income
|
3% to 5%
|
Impact of unfavorable
foreign currency exchange
|
1 %
|
Percentage change in
adjusted operating income in constant currency
|
4% to 6%
|
|
|
Percentage change in
adjusted earnings per share - diluted
|
4% to 6%
|
Impact of unfavorable
foreign currency exchange
|
1 %
|
Percentage change in
adjusted earnings per share - diluted in constant
currency
|
5% to 7%
|
The following provides a reconciliation of our estimated
earnings per share to adjusted earnings per share for 2024 and
actual results for 2023:
|
Year Ended
|
|
2024
Projection
|
|
11/30/23
|
Earnings per share -
diluted
|
$2.76 to
$2.81
|
|
$
2.52
|
Impact of special
charges
|
0.04
|
|
0.18
|
Adjusted earnings per
share - diluted
|
$2.80 to
$2.85
|
|
$
2.70
|
Live Webcast
As previously announced, McCormick will hold a conference call
with analysts today at 8:00 a.m. ET.
The conference call will be webcast live via the McCormick website.
Go to ir.mccormick.com and follow directions to listen to the call
and access the accompanying presentation materials. At this same
location, a replay of the call will be available following the live
call. Past press releases and additional information can be found
at this address.
Forward-Looking Information
Certain information contained in this release, including
statements concerning expected performance such as those relating
to net sales, gross margin, earnings, cost savings, special
charges, acquisitions, brand marketing support, volume and product
mix, income tax expense, and the impact of foreign currency rates
are "forward-looking statements" within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. These
statements may be identified by the use of words such as "may,"
"will," "expect," "should," "anticipate," "intend," "believe" and
"plan" and similar expressions. These statements may relate to:
general economic and industry conditions, including consumer
spending rates, interest rates, and availability of capital;
expectations regarding sales growth potential in various
geographies and markets, including the impact from brand marketing
support, product innovation, and customer, channel, category, heat
platform and e-commerce expansion; expected trends in net sales and
earnings performance and other financial measures; the expected
impact of pricing actions on the Company's results of operations
and gross margins; the impact of price elasticity on our sales
volume and mix; the expected impact of the inflationary cost
environment on our business; the expected impact of factors
affecting our supply chain, including the availability and prices
of commodities and other supply chain resources including raw
materials, packaging, labor, energy, and transportation; the
expected impact of productivity improvements, and cost savings,
including those associated with our CCI and GOE programs and Global
Business Services operating model initiative; the ability to
identify, attract, hire retain and develop qualified personnel and
develop the next generation of leaders; the impact of the ongoing
conflicts between Russia and
Ukraine, Israel and Hamas, and in the Red Sea,
including the potential for broader economic disruption; expected
working capital improvements; the expected timing and costs of
implementing our business transformation initiative, which includes
the implementation of a global enterprise resource planning (ERP)
system; the expected impact of accounting pronouncements; the
expectations of pension and postretirement plan contributions and
anticipated charges associated with those plans; the holding period
and market risks associated with financial instruments; the impact
of foreign exchange fluctuations; the adequacy of internally
generated funds and existing sources of liquidity, such as the
availability of bank financing; the anticipated sufficiency of
future cash flows to enable the payments of interest and repayment
of short- and long-term debt, working capital needs, planned
capital expenditures, quarterly dividends and our ability to obtain
additional short- and long- term financing or issue additional debt
securities; and expectations regarding purchasing shares of
McCormick's common stock under the existing repurchase
authorization.
These and other forward-looking statements are based on
management's current views and assumptions and involve risks and
uncertainties that could significantly affect expected results.
Results may be materially affected by factors such as: the
company's ability to drive revenue growth; the company's ability to
increase pricing to offset, or partially offset, inflationary
pressures on the cost of our products; damage to the company's
reputation or brand name; loss of brand relevance; increased
private label use; the company's ability to drive productivity
improvements, including those related to our CCI program and
streamlining actions, including our GOE program; product quality,
labeling, or safety concerns; negative publicity about our
products; actions by, and the financial condition of, competitors
and customers; the longevity of mutually beneficial relationships
with our large customers; the ability to identify, interpret and
react to changes in consumer preference and demand; business
interruptions due to natural disasters, unexpected events or public
health crises; issues affecting the company's supply chain and
procurement of raw materials, including fluctuations in the cost
and availability of raw and packaging materials; labor shortage,
turnover and labor cost increases; the impact of the ongoing
conflicts between Russia and
Ukraine, Israel and Hamas, and in the Red Sea,
including the potential for broader economic disruption; government
regulation, and changes in legal and regulatory requirements and
enforcement practices; the lack of successful acquisition and
integration of new businesses; global economic and financial
conditions generally, availability of financing, interest and
inflation rates, and the imposition of tariffs, quotas, trade
barriers and other similar restrictions; foreign currency
fluctuations; the effects of our amount of outstanding indebtedness
and related level of debt service as well as the effects that such
debt service may have on the company's ability to borrow or the
cost of any such additional borrowing, our credit rating, and our
ability to react to certain economic and industry conditions;
impairments of indefinite-lived intangible assets; assumptions we
have made regarding the investment return on retirement plan
assets, and the costs associated with pension obligations; the
stability of credit and capital markets; risks associated with the
company's information technology systems, including the threat of
data breaches and cyber-attacks; the company's inability to
successfully implement our business transformation initiative;
fundamental changes in tax laws; including interpretations and
assumptions we have made, and guidance that may be issued, and
volatility in our effective tax rate; climate change;
Environmental, Social and Governance (ESG) matters; infringement of
intellectual property rights, and those of customers; litigation,
legal and administrative proceedings; the company's inability to
achieve expected and/or needed cost savings or margin improvements;
negative employee relations; and other risks described in the
company's filings with the Securities and Exchange Commission.
Actual results could differ materially from those projected in
the forward-looking statements. The company undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law.
About McCormick
McCormick & Company, Incorporated is a global leader in
flavor. With over $6.5 billion in
annual sales across 150 countries and territories, we manufacture,
market and distribute spices, seasoning mixes, condiments and other
flavorful products to the entire food industry including e-commerce
channels, grocery, food manufacturers and foodservice businesses.
Our most popular brands with trademark registrations include
McCormick, French's, Frank's RedHot, Stubb's, OLD BAY, Lawry's,
Zatarain's, Ducros, Vahiné, Cholula, Schwartz, Kamis, DaQiao, Club House,
Aeroplane and Gourmet Garden. Every day, no matter where or what
you eat or drink, you can enjoy food flavored by McCormick.
Founded in 1889 and headquartered in Hunt Valley, Maryland USA, McCormick is guided
by our principles and committed to our Purpose – To Stand Together
for the Future of Flavor. McCormick envisions A World United by
Flavor where healthy, sustainable and delicious go hand in hand. To
learn more, visit www.mccormickcorporation.com or follow McCormick
& Company on Instagram and LinkedIn.
For information contact:
Investor Relations:
Faten Freiha -
faten_freiha@mccormick.com
Global Communications:
Lori Robinson -
lori_robinson@mccormick.com
(Financial tables follow)
First Quarter
Report
|
|
McCormick &
Company,
Incorporated
|
|
|
|
|
|
Consolidated Income
Statement (Unaudited)
|
|
|
|
|
(In millions except
per-share data)
|
|
|
|
|
|
|
Three months
ended
|
|
|
February 29,
2024
|
|
February 28,
2023
|
Net sales
|
|
$
1,602.7
|
|
$
1,565.5
|
Cost of goods
sold
|
|
1,003.4
|
|
1,002.6
|
Gross profit
|
|
599.3
|
|
562.9
|
Gross profit
margin
|
|
37.4 %
|
|
36.0 %
|
Selling, general and
administrative expense
|
|
361.6
|
|
336.1
|
Special
charges
|
|
4.2
|
|
27.8
|
Operating
income
|
|
233.5
|
|
199.0
|
Interest
expense
|
|
50.3
|
|
50.6
|
Other income,
net
|
|
11.1
|
|
11.1
|
Income from
consolidated operations before income taxes
|
|
194.3
|
|
159.5
|
Income tax
expense
|
|
49.6
|
|
34.4
|
Net income from
consolidated operations
|
|
144.7
|
|
125.1
|
Income from
unconsolidated operations
|
|
21.3
|
|
14.0
|
Net income
|
|
$
166.0
|
|
$
139.1
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
0.62
|
|
$
0.52
|
|
|
|
|
|
Earnings per share -
diluted
|
|
$
0.62
|
|
$
0.52
|
|
|
|
|
|
Average shares
outstanding - basic
|
|
268.4
|
|
268.2
|
Average shares
outstanding - diluted
|
|
269.6
|
|
269.8
|
First Quarter
Report
|
McCormick &
Company, Incorporated
|
|
|
|
|
|
Consolidated Balance
Sheet (Unaudited)
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
February 29,
2024
|
|
November 30,
2023
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
178.0
|
|
$
166.6
|
Trade accounts
receivable, net
|
|
567.5
|
|
587.5
|
Inventories
|
|
1,129.6
|
|
1,126.5
|
Prepaid expenses and
other current assets
|
|
145.1
|
|
121.0
|
Total current
assets
|
|
2,020.2
|
|
2,001.6
|
Property, plant and
equipment, net
|
|
1,354.5
|
|
1,324.7
|
Goodwill
|
|
5,253.6
|
|
5,260.1
|
Intangible assets,
net
|
|
3,346.8
|
|
3,356.7
|
Other long-term
assets
|
|
915.0
|
|
919.2
|
Total
assets
|
|
$
12,890.1
|
|
$
12,862.3
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Short-term borrowings
and current portion of long-term debt
|
|
$
1,127.9
|
|
$
1,071.5
|
Trade accounts
payable
|
|
1,133.3
|
|
1,119.3
|
Other accrued
liabilities
|
|
712.6
|
|
908.1
|
Total current
liabilities
|
|
2,973.8
|
|
3,098.9
|
Long-term
debt
|
|
3,329.1
|
|
3,339.9
|
Deferred
taxes
|
|
858.3
|
|
861.2
|
Other long-term
liabilities
|
|
471.5
|
|
478.8
|
Total
liabilities
|
|
7,632.7
|
|
7,778.8
|
Shareholders'
equity
|
|
|
|
|
Common stock
|
|
2,213.4
|
|
2,199.6
|
Retained
earnings
|
|
3,412.8
|
|
3,249.7
|
Accumulated other
comprehensive loss
|
|
(393.7)
|
|
(388.6)
|
Total McCormick
shareholders' equity
|
|
5,232.5
|
|
5,060.7
|
Non-controlling
interests
|
|
24.9
|
|
22.8
|
Total shareholders'
equity
|
|
5,257.4
|
|
5,083.5
|
Total liabilities and
shareholders' equity
|
|
$
12,890.1
|
|
$
12,862.3
|
First Quarter
Report
|
|
McCormick & Company, Incorporated
|
|
|
|
|
|
Consolidated Cash
Flow Statement (Unaudited)
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
February 29,
2024
|
|
February 28,
2023
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
166.0
|
|
$
139.1
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
45.8
|
|
47.8
|
Stock-based
compensation
|
|
11.7
|
|
11.8
|
Income from
unconsolidated operations
|
|
(21.3)
|
|
(14.0)
|
Changes in operating
assets and liabilities
|
|
|
|
|
Trade accounts
receivable
|
|
16.5
|
|
9.7
|
Inventories
|
|
(2.3)
|
|
(0.2)
|
Trade accounts
payable
|
|
14.4
|
|
(54.8)
|
Other assets and
liabilities
|
|
(118.8)
|
|
(49.9)
|
Dividends from
unconsolidated affiliates
|
|
26.4
|
|
13.9
|
Net cash flow provided
by operating activities
|
|
138.4
|
|
103.4
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital expenditures
(including software)
|
|
(62.0)
|
|
(61.5)
|
Other investing
activities
|
|
0.2
|
|
—
|
Net cash flow used in
investing activities
|
|
(61.8)
|
|
(61.5)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Short-term borrowings,
net
|
|
57.3
|
|
67.9
|
Long-term debt
repayments
|
|
(14.1)
|
|
(3.6)
|
Proceeds from exercised
stock options
|
|
4.4
|
|
5.2
|
Taxes withheld and paid
on employee stock awards
|
|
(4.9)
|
|
(6.1)
|
Common stock acquired
by purchase
|
|
(0.3)
|
|
(3.5)
|
Dividends
paid
|
|
(112.7)
|
|
(104.6)
|
Other financing
activities
|
|
2.6
|
|
—
|
Net cash flow used in
financing activities
|
|
(67.7)
|
|
(44.7)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
2.5
|
|
25.6
|
Increase in cash and
cash equivalents
|
|
11.4
|
|
22.8
|
Cash and cash
equivalents at beginning of period
|
|
166.6
|
|
334.0
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
178.0
|
|
$
356.8
|
View original
content:https://www.prnewswire.com/news-releases/mccormick-reports-strong-first-quarter-performance-and-reaffirms-2024-outlook-302099332.html
SOURCE McCormick & Company, Incorporated