McCormick: Reports Q2-2022 Financial Results

Hunt Valley / MD. (mcc) McCormick + Company Inc., a global leader in flavour, reported financial results for the second quarter ended May 31, 2022.

  • Sales declined 1 percent in the second quarter from the year-ago period and, in constant currency, sales were comparable to the year-ago period. Both comparisons reflect strong underlying sales growth offset by the impact of discrete items, including the impact of COVID-related lockdowns in China and the conflict in Ukraine.
  • Operating income was USD 157 million in the second quarter compared to USD 237 million in the year-ago period. Adjusted operating income was USD 174 million compared to USD 258 million in the second quarter of 2021.
  • Earnings per share was USD 0.44 in the second quarter as compared to USD 0.68 in the year-ago period. Adjusted earnings per share was USD 0.48 as compared to USD 0.69 in the year-ago period.
  • For fiscal year 2022, McCormick updated its sales, operating income, and earnings per share outlook.

Chairman, President and CEO’s Remarks

Lawrence E. Kurzius, Chairman, President and CEO, stated, «McCormick’s long-term performance, including through the pandemic and other volatility, has been industry-leading and met or exceeded our financial objectives. We are currently navigating a challenging global environment including persistently high cost inflation and supply chain challenges, significant disruption in China from COVID-related lockdowns and the conflict in Ukraine. All these items intensified as our second quarter progressed and impacted our results. In addition, lapping trade inventory replenishments during last year’s second quarter and the exit of low margin business impacted the comparisons to year-ago performance. The combination of these discrete items unfavorably impacted our sales comparison by 4 percent, with an impact on profit as well. Excluding these items, our sales performance reflects the strength of our broad global portfolio and the effective execution of our strategies, as well as our pricing actions.

«We anticipated the profit driven by sales growth in the second quarter would be more than offset by higher inflation and broad-based supply chain challenges, and the impact was greater than expected due to continuing cost escalation. We expect our pricing actions and other levers to begin to outpace cost pressures in the second half of this year and to fully offset the cost pressures over time. The strength of our business model, the value of our products and capabilities, and the successful execution of our long-term strategies give us confidence in our robust sales growth momentum and in our ability to successfully navigate the challenging dynamic global environment.

«We continue to capitalize on the long-term consumer trends that accelerated during the pandemic, including the sustained shift to cooking more at home, increased digital engagement, clean and flavorful eating, and trusted brands. Our alignment with these trends, in combination with the breadth and reach of our portfolio and our strategic investments provide a strong foundation for sustainable growth. The long-term fundamentals that drove our industry-leading historical performance remain strong and our experienced leaders are executing on our proven strategies while adapting to changes accordingly.

«I want to recognize McCormick employees around the world as they drive our momentum and success. With our vision to stand together for flavor and our relentless focus on growth, performance, and people, we are confident we are well positioned to deliver strong performance in 2022 and beyond while driving sustainable long-term value for our shareholders.»

For additional information please read the company’s PDF file below (81 KB):