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May 31, 2022
McCormick Q2 2022 Earnings Report
McCormick's second quarter results were impacted by discrete items, including COVID-related lockdowns in China and the conflict in Ukraine.
Key Takeaways
McCormick reported a 1% sales decline in the second quarter, but constant currency sales were comparable to the previous year, reflecting 7% growth from pricing actions offset by a 7% decline in volume and product mix. Operating income decreased to $157 million, and earnings per share was $0.44. The company updated its 2022 outlook to reflect these challenges.
Sales declined 1% in the second quarter, but were comparable in constant currency.
Operating income was $157 million, down from $237 million in the year-ago period.
Earnings per share was $0.44, compared to $0.68 in the previous year.
McCormick updated its 2022 outlook to reflect a more unfavorable impact of foreign currency rates, higher cost pressures, and significant disruption in China from COVID-related lockdowns.
Revenue by Segment
Forward Guidance
McCormick updated its financial outlook for fiscal year 2022 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 China from COVID-related lockdowns and the conflict in Ukraine. The Company expects sales to grow 3% to 5% compared to 2021. Adjusted earnings per share is expected to be in the range of $3.03 to $3.08.
Positive Outlook
- Sales growth to be driven by pricing actions.
- Cost savings are expected to offset inflationary pressures over time.
- Continued growth through the strength of its brands.
- Brand marketing, new products, category management, and differentiated customer engagement.
- Strong cash flow is expected.
Challenges Ahead
- Unfavorable impact of foreign currency rates.
- Impact of higher cost pressures.
- Unfavorable impact of significant disruption in China from COVID-related lockdowns.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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