McCormick & Company Posts Strong Q1 Results

McCormick & Company, Incorporated (NYSE:MKC) has reported strong financial results for the first quarter ended February 29, 2024. The company's sales increased by 3% from the year-ago period, with a 2% growth in constant currency. Operating income saw a significant rise to $234 million compared to $199 million in the year-ago period, and adjusted operating income increased by 5% to $238 million from $227 million.

Earnings per share also exhibited notable growth, reaching $0.62 in the first quarter of 2024 compared to $0.52 in the year-ago period. Adjusted earnings per share increased by 7% year-over-year to $0.63 from $0.59. Additionally, cash flow from operations through the first quarter of 2024 was $138 million, a substantial increase from $103 million in the year-ago period.

Looking ahead, McCormick reaffirmed its sales, operating profit, and adjusted earnings per share outlook for fiscal year 2024. The company expects to see sales growth ranging from (2)% to 0% compared to 2023, or (1)% to 1% on a constant currency basis. Operating income in 2024 is anticipated to grow by 8% to 10% from $963 million in 2023, and the company projects 2024 earnings per share to be in the range of $2.76 to $2.81, compared to $2.52 in 2023.

In terms of business segment results, the Consumer segment saw a 1% increase in net sales, while the Flavor Solutions segment experienced a 4% increase in net sales from the first quarter of 2023. Notably, the Consumer segment sales in the Europe, Middle East, and Africa (EMEA) region increased by 13%, and the Flavor Solutions segment operating income grew by 15% in the first quarter of 2024 compared to the year-ago period.

The company's gross profit margin expanded by 140 basis points versus the first quarter of last year, driven by favorable product mix, cost savings, and pricing actions. However, selling, general, and administrative expenses increased from the year-ago period due to higher brand marketing and research and development investments.

As a result of these announcements, the company's shares have moved 10.0% on the market, and are now trading at a price of $76.96. If you want to know more, read the company's complete 8-K report here.

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