HUNT VALLEY, Md., Jan. 23, 2025 /PRNewswire/ — McCormick & Company, Incorporated (NYSE:MKC), a global leader in flavor, today reported financial results for the fourth quarter and fiscal year ended November 30, 2024 and provided its financial outlook for fiscal year 2025.

Chairman, President, and CEO’s Remarks

Brendan M. Foley, Chairman, President, and CEO, stated, “We are pleased to report strong performance for both fourth quarter and fiscal year 2024, an important year for McCormick, in which we built momentum and strengthened our leadership, returning to differentiated and sustainable volume-led growth. We successfully delivered on our objectives for the year. Our strategic investments in core categories enabled us to drive positive volume growth, expand our margins, and deliver robust earnings growth. Additionally, we achieved another year of strong cash flow, paid down debt, and reduced our leverage ratio, further strengthening our balance sheet.”

“As we look ahead to 2025, we remain confident in our ability to sustain this momentum by executing on our proven strategies as well as leveraging the demand for flavor and the strength of our brands to achieve industry-leading performance. We continue to execute with speed and agility on the initiatives within our growth levers, including brand marketing, new products and packaging, category management, and proprietary technologies. Additionally, we believe we are well positioned with our cost savings initiatives to fuel investments and generate operating margin expansion. Importantly, we have the right leadership team and engaged employees globally to deliver on our near-term and long-term objectives and drive shareholder value.” 

“Lastly, I am deeply grateful to McCormick employees worldwide; they remain the foundation of our success. Their dedication, continuous contributions, and disciplined execution in a dynamic environment continue to inspire me. As a leadership team, we are committed to enhancing our people-centric culture and developing the next generation of leaders and capabilities that will drive our success well into the future.”

Fourth Quarter and Fiscal Year 2024 Results

Sales Metrics

Fourth Quarter 2024

As Reported

Organic¹

Acquisition/Divestiture

Constant Currency

% Change

Volume/ Mix

Price

% Change

% Change

% Change

Total Net Sales

2.6 %

2.2 %

(0.4) %

1.8 %

— %

1.8 %

Total Consumer

3.5 %

3.7 %

(1.3) %

2.4 %

— %

2.4 %

Americas

3.7 %

5.1 %

(1.4) %

3.7 %

— %

3.7 %

EMEA

7.8 %

4.9 %

(2.0) %

2.9 %

— %

2.9 %

APAC

(6.9) %

(11.2) %

0.9 %

(10.3) %

— %

(10.3) %

Total Flavor Solutions

1.2 %

(0.2) %

1.0 %

0.8 %

— %

0.8 %

Americas

(0.2) %

(0.8) %

2.2 %

1.4 %

— %

1.4 %

EMEA

1.6 %

(1.6) %

(2.4) %

(4.0) %

— %

(4.0) %

APAC

11.1 %

7.4 %

(0.9) %

6.5 %

— %

6.5 %

1 Organic sales defined as the impact of volume/mix and price and excludes the impact of acquisitions or divestitures, as applicable, and foreign currency.

 

Fiscal Year 2024

As Reported

Organic

Acquisition/Divestiture

Constant Currency

% Change

Volume/ Mix

Price

% Change

% Change

% Change

Total Net Sales

0.9 %

0.3 %

0.5 %

0.8 %

(0.2) %

0.6 %

Total Consumer

1.1 %

0.8 %

— %

0.8 %

— %

0.8 %

Americas

0.6 %

1.0 %

(0.3) %

0.7 %

— %

0.7 %

EMEA

7.3 %

3.7 %

0.6 %

4.3 %

— %

4.3 %

APAC

(5.1) %

(4.9) %

0.8 %

(4.1) %

— %

(4.1) %

Total Flavor Solutions

0.7 %

(0.3) %

1.2 %

0.9 %

(0.5) %

0.4 %

Americas

1.4 %

(0.1) %

1.6 %

1.5 %

— %

1.5 %

EMEA

(3.5) %

(3.3) %

(0.3) %

(3.6) %

(2.3) %

(5.9) %

APAC

4.1 %

4.2 %

0.9 %

5.1 %

— %

5.1 %

 

Profitability Metrics

($ in millions except per share data)

Fourth Quarter 2024

As Reported

Adjusted

Q4 2024

vs. 2023

Q4 2024

vs. 2023

Gross profit

$   722.2

3.0 %

$   722.2

3.0 %

Gross profit margin

40.2 %

20 bps

40.2 %

20 bps

Operating income

$   306.2

3.0 %

$   307.8

(1.1) %

Operating income margin

17.0 %

0 bps

17.1 %

(60) bps

Net income

$   215.2

(1.9) %

$   216.5

(5.8) %

Earnings per share – diluted

$     0.80

(1.2) %

$     0.80

(5.9) %

Fiscal Year 2024

As Reported

Adjusted

FY 2024

vs. 2023

FY 2024

vs. 2023

Gross profit

$ 2,591.0

3.5 %

$ 2,591.0

3.5 %

Gross profit margin

38.5 %

90 bps

38.5 %

90 bps

Operating income

$ 1,060.3

10.1 %

$ 1,069.8

4.5 %

Operating income margin

15.8 %

130 bps

15.9 %

50 bps

Net income

$   788.5

15.9 %

$   795.6

9.4 %

Earnings per share – diluted

$     2.92

15.9 %

$     2.95

9.3 %

Fourth Quarter 2024 Results

Net sales in the fourth quarter increased 3% from the year-ago period, including a 1% benefit from currency. Organic sales increased 2% driven by volume and product mix.

Gross profit for the fourth quarter increased by $21 million from the comparable period in 2023. Gross profit margin expanded 20 basis points versus the fourth quarter of last year. This expansion was primarily driven from the benefit of cost savings led by the Company’s Comprehensive Continuous Improvement (CCI) program.

Operating income was $306 million in the fourth quarter of 2024 compared to $297 million in the fourth quarter of 2023. Excluding special charges, adjusted operating income was $308 million compared to $311 million in the year-ago period. In constant currency, adjusted operating income decreased 1% from the year-ago period, with minimal impact from currency. This decrease is primarily attributable to increased selling, general and administrative expenses from the year-ago period driven by an increase in technology and distribution costs partially offset by higher sales, gross profit margin expansion and CCI-led cost savings.

Earnings per share was $0.80 in the fourth quarter of 2024 compared to $0.81 in the fourth quarter of 2023. Special charges had minimal impact to earnings per share in the fourth quarter of 2024 and lowered earnings per share by $0.04 in the fourth quarter of 2023. Excluding these impacts, adjusted earnings per share was $0.80 in the fourth quarter of 2024 compared to $0.85 in the year-ago period. 

This decrease was primarily attributable to the impact of a higher tax rate and lower operating income.

Fiscal Year 2024 Results

Net sales increased 1% in 2024 as compared to 2023, with minimal impact from currency. Organic sales increased 1%, driven by pricing and volume.

Gross profit increased by $89 million from the comparable period in 2023, representing a gross profit margin expansion of 90 basis points. This expansion was driven by product mix, pricing, and cost savings led by the CCI program.

Operating income was $1,060 million in 2024 compared to $963 million in 2023. Excluding special charges, adjusted operating income was $1,070 million compared to $1,024 million in the year-ago period. Adjusted operating income increased 5% from the year-ago period with minimal impact from currency. This increase is primarily attributable to gross profit margin expansion and CCI-led cost savings partially offset by increased selling, general and administrative expenses, including increases to brand marketing costs, as planned.

Earnings per share was $2.92 in 2024 compared to $2.52 in the prior year. The unfavorable impact of special charges lowered earnings per share by $0.03 in 2024 and $0.18 in 2023. Excluding these impacts, adjusted earnings per share was $2.95 in 2024 compared to $2.70 in 2023. This increase was driven by higher operating income and higher income from unconsolidated operations driven by strong performance in the largest joint venture, McCormick de Mexico.

Net cash provided by operating activities was $922 million in 2024 compared to $1.2 billion in 2023. The benefit from the increase in earnings year over year was more than offset by the impacts of cash used for working capital, higher incentive compensation payments, and the timing of income tax payments.

Fiscal Year 2025 Financial Outlook

McCormick’s fiscal 2025 outlook continues to reflect the Company’s prioritized investments in key categories to strengthen volume trends and drive long-term profitable growth while appreciating the uncertainty of the consumer and macro environment. The Company’s CCI program is continuing to fuel growth investments while also driving operating margin expansion. The Company expects foreign currency rates to unfavorably impact sales by 1%, adjusted operating income by 1%, and adjusted earnings per share by 2%.

As Reported

Constant Currency

Expectations:

Net sales growth

0% to 2%

1% to 3%⁽¹⁾

Drivers:

•          Volume-led growth across both segments

•          Gradual improvement in China Consumer

Operating income

3% to 5%

Gross margin expansion partially offset by growth investments, including brand marketing.

 

Anticipate $15 million in special charges related to organizational and streamlining actions.

Adjusted operating income

3% to 5%

4% to 6%

Earnings per share (EPS)

$2.99 to $3.04

2% to 4%

 Operating income growth, partially offset by:

•          Tax rate of 22% vs. 20.5% in 2024

•          Mid-teens year-over-year decline in income from unconsolidated operations due

           to U.S. dollar strengthening vs. Mexican peso.

Special charges expected to impact EPS by $0.04.

Adjusted EPS

$3.03 to $3.08

3% to 5%

5% to 7%

(1)

Organic sales, defined as the impact of volume/mix and price and excludes the impact of acquisitions or divestitures, as applicable, and foreign currency, growth is expected to be a 1% to 3% increase over the 2024 level.  

For fiscal 2025, 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.

Non-GAAP Financial Measures

The tables below include financial measures of organic net sales, 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, as applicable, of the following:

Special charges – In our consolidated income statement, we include a separate line item captioned “Special charges” in arriving at our consolidated operating income. Special charges consist of expenses and income 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. 

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; however, they should not be viewed as a substitute for, or superior to, GAAP results. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, as they may calculate them differently than we do. We intend to continue providing these non-GAAP financial measures as part of our future earnings discussions, ensuring 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

Year Ended

11/30/2024

11/30/2023

11/30/2024

11/30/2023

Operating income

$  306.2

$   297.2

$  1,060.3

$   963.0

Impact of special charges

1.6

14.1

9.5

61.2

Adjusted operating income

$  307.8

$   311.3

$  1,069.8