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Aug 31, 2024
McCormick Q3 2024 Earnings Report
McCormick's third quarter performance reflected sales comparable to the prior year, driven by volume growth, and reaffirmed the fiscal year 2024 outlook for sales and operating profit.
Key Takeaways
McCormick reported third-quarter sales comparable to the prior year, with 1% volume growth offset by pricing. Operating income increased to $287 million, and earnings per share rose to $0.83. The company reaffirmed its fiscal 2024 sales and operating profit growth outlook and increased its earnings per share outlook.
Sales in the third quarter were comparable to the year-ago period, reflecting volume growth of 1%, partially offset by price.
Operating income was $287 million in the third quarter compared to $245 million in the year-ago period.
Earnings per share was $0.83 in the third quarter as compared to $0.63 in the year-ago period.
McCormick reaffirmed its sales and operating profit growth outlook for fiscal year 2024 and increased its earnings per share outlook.
McCormick
McCormick
McCormick Revenue by Segment
Revenue by Segment
Consumer Revenue
CapyFin.comFlavor Solutions Revenue
CapyFin.com Forward Guidance
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. The Company expects the impact of foreign currency rates in 2024 to be minimal.
Positive Outlook
- Sales to range between (1)% to 1% compared to 2023, with minimal impact from currency.
- Favorable impact from the prior year's pricing actions.
- Improve volume trends as the year progresses through the power of its brands and its targeted investments.
- Operating income in 2024 is expected to grow by 9% to 11% from $963 million in 2023.
- Adjusted operating income is expected to increase 4% to 6%, with minimal impact from currency, driven by gross margin expansion partially offset by a significant increase in brand marketing investments.
Challenges Ahead
- Strategic decisions in 2023 to discontinue low margin business and divest a small canning business will impact volume growth in 2024.
- Approximately $15 million of special charges in 2024 that relate to previous organizational and streamlining actions.
- Significant increase in brand marketing investments will partially offset gross margin expansion.
- Unspecified risks related to the Company's filings with the Securities and Exchange Commission.
- The company's inability to achieve expected and/or needed cost savings or margin improvements.
Revenue & Expenses
Visualization of income flow from segment revenue to net income