| Metric [Unit: USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Consumer Segment           | N/A     | **909.5**  **[0000063754-23-000012_mkc-20230228.htm:15]**  | **912.1**  **[0000063754-23-000032_mkc-20230531.htm:32]**  | **937.1**  **[0000063754-23-000045_mkc-20230831.htm:20]**  | **1,048.6**  **[0000063754-24-000024_mkcreports2023financialres.htm:5]**  | **921.5**  **[0000063754-24-000033_mkc-20240229.htm:16]**  | **904.5**  **[0000063754-24-000057_mkc-20240531.htm:29]**  | **937.4**  **[0000063754-24-000064_mkc-20240831.htm:19]**  |
| Flavor Solutions Segment   | **657.9**  **[0000063754-23-000003_mkcreports2022financialr.htm:5]**  | **656.0**  **[0000063754-23-000012_mkc-20230228.htm:15]**  | **747.1**  **[0000063754-23-000032_mkc-20230531.htm:34]**  | **747.6**  **[0000063754-23-000045_mkc-20230831.htm:20]**  | **704.2**  **[0000063754-24-000024_mkcreports2023financialres.htm:5]**  | **681.2**  **[0000063754-24-000033_mkc-20240229.htm:16]**  | **738.7**  **[0000063754-24-000057_mkc-20240531.htm:31]**  | **742.4**  **[0000063754-24-000064_mkc-20240831.htm:19]**  |
| Total Net Sales            | N/A     | **1,565.5**  **[0000063754-23-000012_mkc-20230228.htm:24]**  | **1,659.2**  **[0000063754-23-000032_mkc-20230531.htm:27]**  | **1,684.7**  **[0000063754-23-000045_mkc-20230831.htm:20]**  | N/A     | **1,602.7**  **[0000063754-24-000033_mkc-20240229.htm:16]**  | **1,643.2**  **[0000063754-24-000057_mkc-20240531.htm:24]**  | **1,679.8**  **[0000063754-24-000064_mkc-20240831.htm:19]**  |

ae16881fe24dc5d6261e1538e87e968684d1fc421401eb06dca2a05effee9f97

| Geographical Segment | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Americas** (USD Million) | **4,756.9**  **[0000063754-24-000027_mkc-20231130.htm:101]**  | N/A | **912.1**  **[0000063754-23-000032_mkc-20230531.htm:32]**  | N/A | N/A | N/A | N/A | N/A |
| **EMEA** (USD Million) | **1,212.8**  **[0000063754-24-000027_mkc-20231130.htm:101]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **APAC** (USD Million) | **692.5**  **[0000063754-24-000027_mkc-20231130.htm:101]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

22449fd62f3c9d95eb434a72d81f886d79124b4510baf8ba20954c94bc377253

McCormick & Company, Incorporated is a global leader in flavor, specializing in the manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products for the food and beverage industry **[0000063754-24-000027_mkc-20231130.htm:41]** **[0000063754-24-000062_mccormickreportsthirdquart.htm:10]**. The company operates through two main business segments: Consumer and Flavor Solutions, catering to retailers, food manufacturers, and foodservice businesses **[0000063754-24-000064_mkc-20240831.htm:19]** **[0000063754-24-000027_mkc-20231130.htm:135]**. McCormick's product offerings include a wide range of spices and seasonings, condiments and sauces, and culinary-inspired flavor solutions **[0000063754-24-000027_mkc-20231130.htm:3]** **[0000063754-24-000064_mkc-20240831.htm:19]**.

1. **Consumer Segment** - Sells a variety of products under brands like McCormick, French’s, Frank’s RedHot, OLD BAY, and Cholula through retail channels such as grocery stores, mass merchandise, and e-commerce.
   - **Spices and Seasonings** - Offers a diverse range of spices and seasonings, which are a significant part of their sales.
   - **Condiments and Sauces** - Provides a selection of condiments and sauces to enhance culinary experiences.
   - **Recipe Mixes** - Supplies convenient recipe mixes for home cooking.

2. **Flavor Solutions Segment** - Provides culinary-inspired flavor solutions to food manufacturers and the foodservice industry, enhancing the taste profiles of various food products.

97caa74b670570a8a38ea975a81e81f64d16cfa030c2477386df8d46395fa7a1

1. Given your expectation of a slight decline in your China business for 2024 due to ongoing macroeconomic challenges, what specific strategies are you implementing to drive growth in that market, and how do you anticipate the recent stimulus policies may impact your results?  **[MKC_3402502_14]** 

2. With the dock workers' strike now officially occurring, can you elaborate on the extent to which your contingency planning is sufficient, and at what point a prolonged strike could materially impact your operations and financial results?  **[MKC_3402502_20]** 

3. Your gross profit margin expanded by 170 basis points this quarter, driven by favorable mix and cost improvements, including lower employee-related benefit expenses; can you discuss the sustainability of these margin gains and whether cost reductions could impact your ability to invest in growth?  **[MKC_3402502_4]** 

4. Working capital was a significant source of cash last year but has been a decent-sized use of cash year-to-date; can you clarify your expectations for working capital's impact on cash flow for the full year and how you plan to manage it, especially in light of your contingency planning related to the port strike?  **[MKC_3402502_27]** 

5. While you cite positive total company volume growth as an inflection point, what risks do you see that could derail this momentum, particularly given consumer trends toward value-seeking behaviors and economic pressures, and how are you adjusting your strategies accordingly?  **[MKC_3402502_8]** **[MKC_3402502_2]** 

6dd32a2623d8ec436a6676778e99c8ae967fa89c8ccf06e029c555ab07d94a32

2051673f1a6e815d3be484fb05dbb10790adaa13b4de6c635866477e59877c37

eb95c14755662bfafd4af8d0f1f89d757094f99f44470375271157a5f3976170

- **McCormick achieved strong consumer volume growth in Q4 2024**, with **global volume growth around 4%** and particularly **5% volume mix growth in the Americas consumer segment**, driven by increased investments in brand marketing, innovation, and expanded distribution. The company expects this momentum to continue into 2025, indicating strong future performance.  **[MKC_3413106_10]**
- **Demand for flavor remains strong**, and McCormick is well-positioned to benefit from ongoing consumer trends like cooking at home and a focus on healthier eating. The company's products meet consumers' desire for **value and affordability**, which is expected to continue globally into 2025, suggesting resilient demand for McCormick's offerings.  **[MKC_3413106_18]**
- **McCormick anticipates continued top-line momentum**, projecting **volume growth across both the Consumer and Flavor Solutions segments throughout 2025**. Supported by strong underlying fundamentals and planned investments, this suggests sustained growth prospects for the company.  **[MKC_3413106_22]**

4348828783c66186deb6afcf11257991e25cc6f68058d86771ea9559becd6aa2

- McCormick lowered its 2025 organic sales growth guidance to **1% to 3%**, which is slightly below previous expectations shared at their Investor Day, indicating potential concerns about sustaining growth momentum due to **weakness in China** and softness in **QSR channels in EMEA**.  **[MKC_3413106_12]** **[MKC_3413106_16]**
- The company expects **operating profit** in Q1 2025 to be **slightly down to flattish** compared to the prior year, impacted by a shift in timing of expenses and lower pricing, suggesting potential near-term challenges in profitability.  **[MKC_3413106_22]**
- **Currency headwinds**, specifically the **20% devaluation of the Mexican peso** against the U.S. dollar, are negatively impacting income from unconsolidated operations in their Mexican joint venture, which may continue to pressure earnings.  **[MKC_3413106_23]**

65b98c663fe280d2e1b5ae1a321c3bb9dea5015c48d427f87968ab616d5ff997

1. **Guidance on Organic Sales Growth**  
   **Q:** Why has your fiscal '25 organic sales growth guidance range moved slightly below initial expectations?  
   **A:** Our guidance reflects a volume-driven plan with little, if any, price increases. The low end is framed by continued weakness in **China consumer confidence**, expecting only slight to gradual recovery. Additionally, we see softness in QSR channels, particularly in EMEA. The high end is supported by strong consumer volumes in the Americas and EMEA. Overall, our outlook remains consistent with what we shared at Investor Day.  **[MKC_3413106_12]** 

2. **Margin Expansion Outlook**  
   **Q:** How should we think about margin expansion between your two segments in fiscal '25?  
   **A:** We're pleased with our gross margin expansion of **90 basis points** in 2024 and expect an additional **50 to 100 basis points** in 2025. This will be driven by CCI and productivity savings, technology investments, and portfolio mix. We anticipate more gross margin improvement from the **Flavor Solutions** segment as we shift to higher-margin categories like flavors and branded foodservice. Our operating margin in Flavor Solutions improved by **140 basis points** in 2024, and we're committed to reaching **14.5%** by 2028.  **[MKC_3413106_18]** 

3. **Impact of Investments on Guidance**  
   **Q:** How do your planned investments in technology affect your fiscal '25 guidance?  
   **A:** We'll continue to invest in technology, including our ERP implementation and new capabilities like **AI** and machine learning. These investments impacted **SG&A by 40 basis points** in 2024 and will continue into 2025. Over time, this will drive CCI and productivity savings, supporting our broader guidance for the year.  **[MKC_3413106_11]** 

4. **China Sales Expectations**  
   **Q:** Could you provide specifics on your expectations for China within your guidance range?  
   **A:** We're factoring in the potential for **China not meeting expectations**, as we've seen in '23 and '24. The low end of our guidance accounts for continued weakness in China consumer confidence, with only slight to gradual recovery expected. We're taking a prudent view given the dynamic environment.  **[MKC_3413106_16]** 

5. **Cash Flow and Inventory Decisions**  
   **Q:** How did strategic inventory decisions impact cash flow in 2024, and what about 2025?  
   **A:** Our cash flow remained strong at **$922 million** in 2024. We made strategic decisions to increase inventory by forward-buying commodities to protect service levels and lock in favorable costs. While difficult to predict for 2025, such decisions are part of our standard approach to managing input costs.  **[MKC_3413106_20]** 

6. **Volume Growth Sustainability**  
   **Q:** Given strong Q4 volumes, do you expect this momentum to continue into fiscal '25?  
   **A:** Yes, we're continuing to drive top-line momentum from 2024 into 2025 with volume growth across both segments. We anticipate consistent top-line growth throughout the year, supported by ongoing investments in brand marketing and maintaining price gap management strategies.  **[MKC_3413106_10]** **[MKC_3413106_22]** 

7. **Flavor Solutions Segment Shift**  
   **Q:** How quickly is your pivot to faster-growing, innovative customers in Flavor Solutions happening?  
   **A:** We're seeing faster performance in categories like snacks, granola, crackers, soups and broths, beverages, and performance nutrition. While overall volumes were flattish in Q4, we're gaining share and driving growth with these customers. Growth in branded foodservice has also been healthy, and we expect this to continue.  **[MKC_3413106_14]** 

8. **JV Income and Currency Impact**  
   **Q:** How is currency affecting your JV income, and is the underlying business still growing?  
   **A:** The underlying performance of our JV in Mexico is strong, driving significant volume and profitability. However, a **20% devaluation of the Mexican peso** against the dollar is impacting translated results. Excluding currency headwinds, the business is robust and growing.  **[MKC_3413106_23]** 

9. **Price Gap Management**  
   **Q:** How much more price gap management investment is needed going into Q1 and fiscal '25?  
   **A:** We'll maintain the same level of price gap investment as in 2024. There's no significant step-up; instead, we're maintaining our baseline to support brand growth and volume. We continuously evaluate the return on these investments to ensure effectiveness.  **[MKC_3413106_17]** 

10. **Consumer Trends and Outlook**  
    **Q:** What is your outlook on consumer behavior and its impact on your business in 2025?  
    **A:** We expect continued demand for flavor as consumers focus on cooking at home and healthier eating. **Value remains important**, especially for lower-income consumers seeking affordability globally. Our portfolio is well-positioned to meet these needs, supporting our performance in the evolving environment.  **[MKC_3413106_18]** 

11. **Brand Marketing Plans**  
    **Q:** How will your brand marketing spending change in fiscal '25?  
    **A:** We'll continue investing at **high single-digit increases**, similar to 2024, spread evenly across all quarters. We'll allocate spending strategically across our portfolio, increasing investment where we see the strongest returns, and continue supporting brands like **Frank's RedHot** while focusing more on other brands.  **[MKC_3413106_21]** 

12. **Earnings Cadence Expectations**  
    **Q:** How should we think about the cadence of earnings relative to your annual growth ranges?  
    **A:** We expect consistent top-line growth throughout the year, with volume growth in both segments starting from Q1. Operating profit in Q1 may be **slightly down to flat** due to pricing overlaps and a shift in compensation expenses. Gross margin improvement is anticipated from Q2 to Q4.  **[MKC_3413106_22]** 

13. **Regulatory Changes and Reformulation**  
    **Q:** How are you positioned to capitalize on industry reformulations due to potential additive bans?  
    **A:** We're actively involved in reformulations and product improvements, assisting customers with removing artificial colors, reducing sodium, and increasing clean ingredients. Our expertise positions us well to support customers through any regulatory changes, driving innovation in the industry.  **[MKC_3413106_15]** 

f1a230570ab5b8886fecb9b14e46cc229b902dbf2cca0bc9de79effe1f6e8f62

Americas

EMEA

APAC

- United States

- Other Countries

- Americas (Consumer)

- Americas (Industrial)

Total Revenue

9e7f436153b3a7f502582b2e4655fde59a86b55b5b9442315c84a09e8d2fad1a

65bd2e544906ce26656a1c405115c9a42edcecf9c1b3e85467341d5dd9a21661

7f19c316d2b62b1dfb432d916ee0cdfc3ac98565eabaa77ed818078aa3d00521

Consumer

- Spices & Seasoning

- Recipe Mixes

- Condiments & Sauces

- Regional Leaders

Flavor Solutions

- Flavors

- Branded Foodservice

- Custom Condiments

- Coatings, Bulk Spices & Herbs

f9ab0522b582f12b784a78e6d3e5ddbfbee792478f3b749d4a49e43b48874d62

McCormick’s Q4 global volume rose 4% (5% in Americas), capitalizing on strong flavor demand. Still, 2025 organic sales guidance dips to 1–3% amid China and QSR headwinds. Margin expansion of 50–100 bps is on track, reflecting continued productivity gains.

366eb1c5d77750f8733dc5b89fa71d445f7fbe392c04053792cc13f434c6e42d

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales**: Constant currency net sales expected to range between a decline of 1% to growth of 1%, with results anticipated to be at the mid to high end of this range.
  2. **Pricing**: A 1% increase in pricing is anticipated for the year.
  3. **China Consumer Sales**: Expected to be down slightly compared to 2023 for the full year.
  4. **Adjusted Operating Income**: Expected to grow 4% to 6% in constant currency.
  5. **Gross Margin**: Projected to range between 50 to 100 basis points higher than 2023.
  6. **SG&A**: Benefits from cost savings will be partially offset by investments to drive volume growth, including brand marketing.
  7. **Brand Marketing Spend**: Expected to increase high single digits for the year.
  8. **Tax Rate**: Expected to be approximately 21% for the year.
  9. **Income from Unconsolidated Operations**: Expected to see a mid-teens increase.
  10. **Adjusted EPS**: Projected to be between $2.85 to $2.90, reflecting a 5% to 7% increase compared to 2023  **[MKC_3402502_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Currency Impact**: Expected to unfavorably impact sales, adjusted operating income, and adjusted EPS by approximately 1%.
  2. **Net Sales**: Constant currency net sales expected to range between a decline of 1% to growth of 1%.
  3. **Pricing**: Total pricing expected to be flat relative to the prior year in the second half.
  4. **Volume Growth**: Expected to return to total volume growth during the second half.
  5. **Gross Margin**: Projected to range between 50 to 100 basis points higher than 2023.
  6. **Adjusted Operating Income**: Expected to grow by 4% to 6% in constant currency.
  7. **Brand Marketing Spend**: Expected to increase by high single digits.
  8. **Adjusted Effective Income Tax Rate**: Projected to be approximately 22%.
  9. **Income from Unconsolidated Operations**: Expected to see a mid-teens increase.
  10. **Adjusted EPS**: Projected to be between $2.80 to $2.85, reflecting a 4% to 6% increase compared to 2023.
  11. **Interest Expense**: Expected to be up slightly versus the prior year.
  12. **Cash Flow**: Expected to be strong, driven by profit and working capital initiatives  **[MKC_3392934_8]** **[MKC_3392934_9]** **[MKC_3392934_7]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales Growth**: Constant currency net sales expected to range between a decline of 1% to growth of 1%.
  2. **Gross Margin**: Projected to expand by 50 to 100 basis points compared to 2023.
  3. **Adjusted Operating Income**: Expected to grow by 4% to 6% in constant currency.
  4. **Brand Marketing Spend**: Anticipated to increase by high single digits.
  5. **Adjusted Effective Income Tax Rate**: Projected to be approximately 22%.
  6. **Income from Unconsolidated Operations**: Expected to increase by mid-teens.
  7. **Adjusted EPS**: Projected to be between $2.80 to $2.85, reflecting a 4% to 6% increase compared to 2023.
  8. **Currency Impact**: Expected to unfavorably impact sales, adjusted operating income, and adjusted EPS by approximately 1%.
  9. **Volume Growth**: Expected to return to volume growth during the second half.
  10. **China Consumer Sales**: Expected to be comparable to 2023  **[MKC_3378977_8]** **[MKC_3378977_7]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS**: Projected to be between $2.80 to $2.85, reflecting a 4% to 6% increase compared to 2023.
  2. **Operating Margin Expansion**: Expected to expand by approximately 80 basis points.
  3. **Net Sales**: Constant currency net sales expected to range between a decline of 1% to growth of 1%.
  4. **Gross Margin**: Projected to expand by 50 to 100 basis points.
  5. **Adjusted Operating Income**: Expected to grow by 4% to 6% in constant currency.
  6. **Brand Marketing Spend**: Anticipated to increase by high single digits.
  7. **Effective Income Tax Rate**: Projected to be approximately 22%.
  8. **Income from Unconsolidated Operations**: Expected to see a mid-teens increase.
  9. **Pricing**: Expected to be around 1% for the full year.
  10. **Volume Growth**: Expected to return to volume growth during the second half  **[MKC_3370798_9]** **[MKC_3370798_25]** **[MKC_3370798_8]** **[MKC_3370798_21]** **[MKC_3370798_18]** .

edd48778b7f5c995a4e0f37c9f2021ea657d3038b797e73f41e0837f3d49f1e3

| Name               | Position                                      | Start Date          | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|--------------------|-----------------------------------------------|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Brendan M. Foley   | President & Chief Executive Officer           | September 2023      | Brendan M. Foley has been with McCormick since 2014, serving in various leadership roles including Chief Operating Officer and President (2022 to 2023), President, Global Consumer, Americas & Asia (2020 to 2022), and President, North America (2015 to 2016). He will also assume the role of Chairman of the Board effective January 1, 2025  **[0001308179-24-000026_lmkc016_def14a.htm:22]** **[0000063754-24-000068_brendanfoleytosucceedlaw.htm:0]** **[0000063754-24-000068_mkc-20241119.htm:1]** . |
| Lawrence E. Kurzius| Executive Chairman                            | September 2023      | Lawrence E. Kurzius has been a director since 2015 and previously served as Chairman and Chief Executive Officer from 2016 to 2023. He will retire as Chairman on December 31, 2024, but will remain on the Board as a non-executive director until the company's annual shareholder meeting in March 2025  **[0001308179-24-000026_lmkc016_def14a.htm:22]** **[0000063754-24-000068_brendanfoleytosucceedlaw.htm:0]** **[0000063754-24-000068_mkc-20241119.htm:1]** .                           |
| Michael R. Smith   | Executive Vice President & Chief Financial Officer | 2016                | Michael R. Smith has been serving as the Executive Vice President & Chief Financial Officer since 2016. He will continue in his role as Executive Vice President until his retirement on February 28, 2025  **[0001308179-24-000026_lmkc016_def14a.htm:43]** **[0000063754-24-000049_mkcannouncesmarcosgabrie.htm:0]** **[0000063754-24-000049_mkc-20240625.htm:1]** .                                                                                                                   |
| Sarah J. Piper     | Chief Human Relations Officer                 | December 2022       | Sarah J. Piper has been with McCormick since 2017, holding various roles including Vice President of Total Rewards and Vice President, Human Relations for the Americas. She became Chief Human Relations Officer in December 2022  **[0000063754-23-000005_mkc-20221130.htm:7]** **[0001308179-24-000026_lmkc016_def14a.htm:63]** .                                                                                                 |
| Jeffery D. Schwartz| Vice President, General Counsel & Secretary   | 2014                | Jeffery D. Schwartz has been serving as the Vice President, General Counsel & Secretary since 2014  **[0001308179-24-000026_lmkc016_def14a.htm:43]** .                                                                                                                                                                                                                                  |
| Andrew D. Foust    | President, Americas                           | December 2021       | Andrew D. Foust has been with McCormick since 2018, serving in roles such as President of the U.S. Consumer Products Group and Vice President of Marketing for the U.S. Consumer Products Group before becoming President, Americas  **[0000063754-24-000027_mkc-20231130.htm:7]** .                                                                                                  |
| Katherine A. Jenkins| Chief Growth Officer                         | June 2023           | Katherine A. Jenkins has been with McCormick since 2017, serving in roles such as Chief Strategy Officer & Senior Vice President, Investor Relations, and Vice President, Investor Relations before becoming Chief Growth Officer  **[0000063754-24-000027_mkc-20231130.htm:7]** .                                                                                                     |
| Ana G. Sanchez     | President, EMEA                               | February 2022       | Ana G. Sanchez has been with McCormick since 2018, serving in roles such as Vice President Consumer, EMEA and Vice President Marketing, EMEA before becoming President, EMEA  **[0000063754-24-000027_mkc-20231130.htm:7]** .                                                                                                                                                        |
| Marcos Gabriel     | Executive Vice President & Chief Financial Officer | December 1, 2024   | Marcos Gabriel has over 25 years of experience in the consumer products industry and has served in key senior leadership roles at McCormick, contributing significantly to the company's profitable growth and improved productivity  **[0001062993-24-020030_xslF345X02/form3.xml:0]** **[MKC_3392934_5]** .                                                                                             |

c2313a2c31302c3d43991d3be625f83b21d4c93effc080d319f88954606e2bc4

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | November 2019  **[0000063754-24-000064_mkc-20240831.htm:48]** **[0000063754-24-000064_mkc-20240831.htm:40]** **[0000063754-24-000064_mkc-20240831.htm:18]**  |
| End Date/Duration        | N/A             |
| Total additional amount  | **$600 million**  **[0000063754-24-000064_mkc-20240831.htm:48]** **[0000063754-24-000064_mkc-20240831.htm:40]** **[0000063754-24-000064_mkc-20240831.htm:18]**  |
| Remaining authorization  | **$472 million**  **[0000063754-24-000064_mkc-20240831.htm:48]** **[0000063754-24-000064_mkc-20240831.htm:40]** **[0000063754-24-000064_mkc-20240831.htm:18]**  |
| Details                  | Mitigate the effect of shares issued upon the exercise of stock options  **[0000063754-24-000027_mkc-20231130.htm:72]**  |

86ffefdd28ee51b2c61043fe8dd70b4b306ca1324d955ca1b4bc8064aea3c839

**Annual guidance for FY 2025:**
- **Organic Net Sales Growth**: 1% to 3%  **[MKC_3413106_12]** **[MKC_3413106_1]**  (raised from -1% to +1%  **[MKC_3402502_6]** )  
- **Gross Margin Expansion**: 50 to 100 basis points increase  **[MKC_3413106_7]**  (no change from prior guidance  **[MKC_3402502_6]** )  
- **Adjusted Operating Income Growth**: 4% to 6% in constant currency  **[MKC_3413106_7]**  (no change from prior guidance  **[MKC_3402502_6]** )  
- **Adjusted EPS**: $3.03 to $3.08, with constant currency growth of 5% to 7%  **[MKC_3413106_7]**  (no change from prior guidance  **[MKC_3402502_6]** )  
- **Currency Impact**: Negative 1 point on net sales and adjusted operating income, and negative 2 points on adjusted EPS  **[MKC_3413106_7]**  (no prior guidance)  
- **Tax Rate**: ~22%  **[MKC_3413106_7]**  (raised from ~21%  **[MKC_3402502_6]** )  
- **Income from Unconsolidated Operations**: Decline in mid-teens range  **[MKC_3413106_7]**  (lowered from mid-teens increase  **[MKC_3402502_6]** )  
- **Brand Marketing Spend**: High single-digit increase  **[MKC_3413106_7]**  (no change from prior guidance  **[MKC_3402502_6]** )  
- **Volume Growth**: Total volume growth across both segments  **[MKC_3413106_7]**  (no prior guidance)  
- **Quarterly Trends**: Q1 operating profit flat or slightly down  **[MKC_3413106_1]** **[MKC_3413106_3]** , with gross margin building over the year  **[MKC_3413106_7]**  (no prior guidance)  

81a98864de86cbbfff3a6544a69c849f7ca90e7abf7e92235000aa64dd9491bc

| Name            | Start Date | End Date | Reason for Change |
|-----------------|------------|----------|-------------------|
| Ernst & Young LLP | 1982  **[0000063754-25-000005_mkc-20241130.htm:82]**  | Present  | Current auditor   |

574bafe2ffa2bd42c80610b278d25a8d59e75ae5659359f08c79671bb97fb9d7

3884b63c2bbc254eca787cac64584a8a947d3246764693d9f51614db16f01872

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $1,798 million (+3% YoY)  **[0000063754-24-000027_mkc-20231130.htm:92]** **[0000063754-25-000005_mkc-20241130.htm:82]**   
- **SG&A: $414.4 million (+962% YoY)**  **[0000063754-24-000027_mkc-20231130.htm:92]** **[0000063754-25-000005_mkc-20241130.htm:82]**   
- Operating Income: $306.2 million (+3% YoY)  **[0000063754-24-000027_mkc-20231130.htm:92]** **[0000063754-25-000005_mkc-20241130.htm:82]**   
- Net Income: $215.2 million (-2% YoY)  **[0000063754-24-000027_mkc-20231130.htm:92]** **[0000063754-25-000005_mkc-20241130.htm:82]**   

98e4de75156838f92a8f20eaa3e38c2d4563b6be0cd2f2caca5c8f7e38fbb3b4

cb1361cec39ce49a9d7f0beded416b83f1b40ddd6354ab6909715b43933a7f6f

b59564b9daea66da387dac530b3097c8eb2cee235c261553b717d131449823d8

| Year | Amount Due (in millions) | Debt Type          | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2025     | $483.1  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:67]**             | Short-term Debt        | 4.7  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:67]**         | 11.2% = (483.1 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:67]**                                        |
| 2025     | $250.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 3.25% Notes            | 3.25  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 5.8% = (250.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                         |
| 2026     | $500.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 0.90% Notes            | 0.90  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 11.6% = (500.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2027     | $750.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 3.40% Notes            | 3.40  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 17.4% = (750.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2028     | $10.3 **[0000063754-25-000005_mkc-20241130.htm:101]**                | Finance Lease          | N/A                   | 0.2% = (10.3 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]**                                             |
| 2029     | $18.0 **[0000063754-25-000005_mkc-20241130.htm:101]**                | Finance Lease          | N/A                   | 0.4% = (18.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]**                                             |
| 2030     | $500.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 2.50% Notes            | 2.50  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 11.6% = (500.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2031     | $500.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 1.85% Notes            | 1.85  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 11.6% = (500.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2033     | $500.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 4.95% Notes            | 4.95  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 11.6% = (500.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2034     | $500.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 4.70% Notes            | 4.70  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 11.6% = (500.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                        |
| 2047     | $300.0  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**             | 4.20% Notes            | 4.20  **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**        | 7.0% = (300.0 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]** **[0000063754-25-000005_mkc-20241130.htm:70]**                                         |
| Thereafter | $2,357.3 **[0000063754-25-000005_mkc-20241130.htm:101]**           | Long-term Debt         | N/A                   | 54.8% = (2,357.3 / 4,300) * 100  **[0000063754-25-000005_mkc-20241130.htm:26]** **[0000063754-25-000005_mkc-20241130.htm:101]**                                         |

72f6ac8bdc178204a72b55ec1e65cdfbe4223fed2b55fa0e5def59ce857109e2

e1267ab7e5cd4e54f59ecf76d84f6b89a3142fb85584e65ec56ca795024ce9ce

1. **Sales Growth Confidence**  
   **Q:** Why greater confidence in achieving higher end of sales guidance?  
   **A:** We had a strong first quarter with sales exceeding expectations, giving us confidence to achieve the mid- to high end of our constant currency sales growth range for the full year.  **[MKC_3378977_10]**  We drove sequential volume improvement in our core categories, especially **spices and seasonings**.  **[MKC_3378977_10]**  Investments in brand marketing, new product launches, and targeted price gap management are performing well.  **[MKC_3378977_10]**  We expanded margins and accomplished the things we set out to do, contributing to our confidence for the rest of the year.  **[MKC_3378977_10]** 

2. **Americas Consumer Volume Outlook**  
   **Q:** Will Consumer Americas volumes improve sequentially and turn positive?  
   **A:** In Q1, Americas consumer volume declined by **2.6%**, mainly due to the DSD exit and declines in prepared food categories.  **[MKC_3378977_11]**  Excluding these factors, volume growth would have been flat to slightly positive.  **[MKC_3378977_11]**  Growth in **spices and seasonings** was healthy but offset by declines in **mustard** and **hot sauce**.  **[MKC_3378977_11]**  We expect volumes to continue improving sequentially and to drive volume growth in the second half of the year.  **[MKC_3378977_11]** **[MKC_3378977_10]** 

3. **China Segment Performance**  
   **Q:** How are China Consumer and Flavor Solutions performing?  
   **A:** China met our expectations in Q1 for both Consumer and Flavor Solutions segments.  **[MKC_3378977_13]**  Our outlook for China Consumer remains cautious due to factors like youth unemployment and reduced consumer confidence.  **[MKC_3378977_13]**  Smaller independent restaurants are losing traffic to larger QSR chains, affecting our Consumer segment.  **[MKC_3378977_13]**  However, we expect our Flavor Solutions business in China to be stronger in 2024, driven by the growth of established QSRs.  **[MKC_3378977_13]** 

4. **Flavor Solutions Volume Fluctuations**  
   **Q:** Are there anticipated headwinds for Flavor Solutions in Q2?  
   **A:** While we saw positive volume growth in Flavor Solutions in Q1, some regions like EMEA face headwinds due to variability in customer activity.  **[MKC_3378977_15]**  We expect possible setbacks in Q2 but anticipate volume growth in the second half of the year.  **[MKC_3378977_15]**  The business can fluctuate due to factors like new product launches and foot traffic at QSR customers.  **[MKC_3378977_15]** 

5. **Spices and Seasonings Share Gains**  
   **Q:** What's driving unit share improvement in Spices and Seasonings?  
   **A:** Unit share gains are driven by **new packaging** increasing on-shelf velocity, recapturing distribution points, and increased advertising.  **[MKC_3378977_16]**  The rollout of new packaging is progressing and expected to be complete by end of Q2.  **[MKC_3378977_16]**  These efforts led to unit share gains at the end of the quarter.  **[MKC_3378977_16]** 

6. **Second Quarter Margin Outlook**  
   **Q:** Why modest gross margin improvement expected in Q2?  
   **A:** Q2 is an inflection point with less pricing benefit as pricing actions decrease from **2.7%** in Q1 to **1%** for the year.  **[MKC_3378977_17]**  We're activating more price gap management and increasing A&P investments, which puts pressure on margins.  **[MKC_3378977_17]**  Volume improvements are expected but not enough to offset reduced pricing benefits in Q2.  **[MKC_3378977_17]**  We anticipate stronger margin improvement in the second half.  **[MKC_3378977_17]** 

7. **Price Gap Management Scope**  
   **Q:** What percent of the portfolio is under price gap management?  
   **A:** Our price gap management efforts target less than **15%** of our Americas portfolio, specifically in **Spices and Seasonings** and **Recipe Mixes**.  **[MKC_3378977_18]**  These actions are precise and SKU-specific.  **[MKC_3378977_18]**  We are comfortable with the current scope and constantly evaluate the need for adjustments.  **[MKC_3378977_19]** 

8. **Hot Sauce Trial Sizes**  
   **Q:** How are $1 trial sizes impacting the hot sauce category?  
   **A:** Trial sizes at **$1** price points have driven significant unit growth and added new users to the category.  **[MKC_3378977_18]**  While it pressures our unit share, it's positive as it brings new households into the category.  **[MKC_3378977_18]**  We are evaluating offering our own trial sizes and increasing brand marketing and innovation, particularly for **Frank's** and **Cholula**.  **[MKC_3378977_18]** 

9. **Outlook for Mustard and Prepared Foods**  
   **Q:** What are the plans to improve mustard and prepared foods categories?  
   **A:** In mustard, low price points from private labels have impacted consumption.  **[MKC_3378977_21]**  We plan to increase promotional programs, especially during the **grilling season**, and strengthen distribution to improve trends.  **[MKC_3378977_21]**  Prepared foods is a smaller, non-core part of our portfolio; we are monitoring trends and managing the portfolio accordingly.  **[MKC_3378977_21]** 

10. **Shelf Resets Impact**  
    **Q:** Will shelf resets lead to incremental shipments in Q2?  
    **A:** We view gains in total distribution points (TDPs) as incremental to our market presence.  **[MKC_3378977_22]**  While shelf resets will benefit us, their impact is already factored into our outlook.  **[MKC_3378977_22]**  The new packaging rollout isn't expected to cause a significant shipment spike but will improve velocity over time.  **[MKC_3378977_22]** 

11. **Discrepancies in Tracked Data**  
    **Q:** Why is there a difference between tracked data and reported sales?  
    **A:** We rely on **Circana** data, which provides a broader view of our categories compared to Nielsen.  **[MKC_3378977_23]**  Differences may arise due to variations in how categories are captured.  **[MKC_3378977_23]**  Strong growth in **e-commerce** and performance in **Canada** and **Latin America** also contribute to discrepancies.  **[MKC_3378977_23]** 

12. **Mexico JV Performance**  
    **Q:** How did the Mexico JV perform, and what's the outlook?  
    **A:** Our joint venture in Mexico had a strong Q1 with **50%** growth, partly due to comping against a weaker quarter.  **[MKC_3378977_24]**  It's too early to adjust our full-year guidance of **mid-teens** growth.  **[MKC_3378977_24]**  The business is profitable with strong brand positions, and we export products like **mayonnaise** to the U.S..  **[MKC_3378977_24]** 

13. **Interest Expense Guidance**  
    **Q:** What's the outlook for interest expense?  
    **A:** We didn't provide specific guidance as it's not material; we expect it to be roughly equal to the first quarter and do not anticipate significant changes for the year.  **[MKC_3378977_25]** 

ce8b5e12b6c37a213d2273dfca564caac49390be450682b255b97b3bdc44dbc4

- **McCormick is experiencing strong sequential volume growth in the Consumer segment, particularly in Spices and Seasonings, delivering volume growth across all major markets and driving unit share growth in the U.S.**  **[MKC_3392934_12]**
- **Investments in brand marketing and new product innovation are yielding significant results, with plans to double innovation in the second half compared to the first half, supporting continued growth.**  **[MKC_3392934_12]**
- **Strong performance in branded foodservice, driven by innovative programs and growth in key brands, is helping offset softness in other areas and supports overall growth.**  **[MKC_3392934_23]**

0f35d528aac890b2c74eb67b6c5798f3e2c22a4e996bb930710914a8386cef6c

- McCormick experienced a **3% decline in volume and product mix** in the fourth quarter of 2023, which did not meet the company's expectations and indicates weakening consumer demand impacting top-line growth.  **[MKC_3370798_1]**
- The company faces challenges in China due to **high unemployment**, **low consumer confidence**, and consumers' reluctance to spend, which may slow down sales recovery in the Chinese market.  **[MKC_3370798_15]**
- Recovery of margins in the **Flavor Solutions** segment has been **slower than expected**, with operating margins still below pre-pandemic levels, potentially impacting profitability.  **[MKC_3370798_32]**

ad2dff98c91d53e726ec220b346efc00570f436a64dad3b98d3ed153ed8cebc4

- **Strong Operating Margin Improvement**: McCormick ended the year with a **100 basis point increase in operating margin**, thanks to effective cost recovery through pricing and successful CCI and GOE programs, providing **strong momentum into 2024**. The company expects **further margin improvement of about 80 basis points in 2024**.  **[MKC_3370798_13]**
- **Significant Investment in Brand Building**: The company increased brand marketing spend by **3% to 4% in 2023** and plans a **double-digit increase in 2024**, focusing on high ROI areas to drive future growth.  **[MKC_3370798_5]**
- **Confidence in Core Flavor Category**: McCormick maintains that the **global demand for flavor remains strong**, viewing it as a **very attractive category**, and does not believe consumer cautiousness has weakened the market.  **[MKC_3370798_8]**

a2326846ed2ca04b6a2061a83c16ab117a50b2fe124a6a1799208de4ecc0b169

- **McCormick had a strong first quarter with better-than-expected sales and margin expansion**, increasing confidence in achieving the mid- to high end of their full-year sales growth guidance.  **[MKC_3378977_10]**
- **Investments in brand marketing and new product launches are driving sequential volume improvements**, especially in core categories like spices and seasonings.  **[MKC_3378977_10]**
- **The Mexico joint venture delivered a strong performance, contributing meaningfully to profitability**, and is expected to continue performing well throughout the year.  **[MKC_3378977_24]**

8775c27bb786502d4ad920508027e62ec9a1ea31bf44242866d5100793bef1cf

- **Weaker-than-expected QSR traffic** is negatively impacting McCormick's Flavor Solutions volumes, particularly in the EMEA and Asia Pacific regions.  **[MKC_3402502_10]**
- **Increased SG&A expenses** due to investments in digital transformation and IT are expected to pressure **Q4 operating profit**, which is projected to be only comparable to last year despite these investments.  **[MKC_3402502_21]**
- **Growing competition from smaller brands** in the U.S. spices and seasonings category may impact McCormick's market share and growth prospects.  **[MKC_3402502_26]**

e0db488748272e44a25a869ea37e871cc0471038309f1348d003443a7784bea8

1. **2025 Outlook and Growth Algorithm**  
   **Q:** Any reason to think you won't be on algo in 2025?  
   **A:** Management isn't ready to discuss 2025 guidance but is confident in their plans and investments driving volume growth into next year. They acknowledge economic uncertainties but feel well-positioned and will share more at the upcoming Investor Day.  **[MKC_3402502_12]** 

2. **China Market Challenges**  
   **Q:** How is stimulus in China affecting consumer demand?  
   **A:** They expect China's environment to remain challenging, anticipating a slight decline in 2024. While unable to predict the impact of recent stimulus measures, past actions didn't materially affect their business consumption.  **[MKC_3402502_14]** 

3. **Hot Sauce Category Competition**  
   **Q:** Can you update on U.S. hot sauce challenges and plans?  
   **A:** The hot sauce category is attractive but faces increased competition. They're impacted by a competitor recovering from supply issues and by trial-sized offerings boosting unit volumes. Their own mini trial sizes launched in Q3 are performing well, and they expect sequential improvement.  **[MKC_3402502_18]** 

4. **Gross Margin Outlook**  
   **Q:** Why not raise gross margin guidance despite improvements?  
   **A:** Gross margin is improving sequentially, but factors like normalized product mix in Flavor Solutions, supply chain investments, and slight negative pricing in the consumer segment are impacting Q4 margins.  **[MKC_3402502_13]** 

5. **Flavor Solutions Margin Sustainability**  
   **Q:** Is there more runway for Flavor Solutions margin improvement?  
   **A:** Management is positive about Flavor Solutions margins, driven by shifts to higher-margin products like Branded Foodservice. They expect continued improvement through CCI initiatives and leveraging growth for operating efficiency.  **[MKC_3402502_15]** **[MKC_3402502_17]** 

6. **SG&A Increase in Q4**  
   **Q:** What's driving the SG&A step-up in Q4?  
   **A:** SG&A investments shifted from Q3 to Q4, particularly in IT and digital transformation, including digital marketing, data analytics, and manufacturing efficiencies, affecting both segments.  **[MKC_3402502_21]** **[MKC_3402502_22]** **[MKC_3402502_28]** 

7. **Pricing Power and Long-Term Strategy**  
   **Q:** Is there room for additional pricing in 2025?  
   **A:** Pricing remains a lever in their long-term algorithm, though future inflation and pricing are challenging to predict. They emphasize their CCI program and holistic P&L management to fund growth investments.  **[MKC_3402502_25]** 

8. **Working Capital and Cash Flow**  
   **Q:** Will working capital be a source or use of cash this year?  
   **A:** They expect a strong cash flow year with the fourth quarter being the strongest. Year-to-date working capital was used to mitigate risks like the port strike, but they anticipate normalization.  **[MKC_3402502_27]** 

9. **Spices & Seasonings Competition**  
   **Q:** How is McCormick faring amid competition in spices and seasonings?  
   **A:** They're growing share in volume measures and expanding distribution points. While acknowledging competition from smaller brands, they feel confident in their broad offering and category performance.  **[MKC_3402502_26]** 

10. **Impact of Dock Workers' Strike**  
    **Q:** How could the dock workers' strike affect operations?  
    **A:** They've been contingency planning since April, coordinating with suppliers to mitigate risks. They believe they're broadly covered but are monitoring the situation daily.  **[MKC_3402502_20]** 

11. **Brand Investment Levels**  
    **Q:** Did brand investment increase high single digits in Q3 as guided?  
    **A:** Investments are discussed in halves rather than quarters. They confirm that investments are moving up in both Q3 and Q4 as planned.  **[MKC_3402502_24]** 

12. **FX and Tax Benefit Impact**  
    **Q:** Do FX and tax benefits account for the guidance raise?  
    **A:** Due to tax and FX factors, the guidance reflects these adjustments but they didn't quantify an exact benefit.  **[MKC_3402502_23]** 

13. **Timing Shifts Between Quarters**  
    **Q:** Should we model customer activity shifts reversing in Q4?  
    **A:** Positive impacts from timing shifts in Q3 will normalize in Q4, particularly affecting Flavor Solutions in the Americas.  **[MKC_3402502_11]** 

14. **Prepared Foods and Customer Trends**  
    **Q:** Are trends improving in sales to packaged food manufacturers?  
    **A:** They saw improvement in Flavor Solutions, with good results in high-growth customer categories and branded foodservice, despite weak QSR traffic. Sequential improvement is expected in Q4.  **[MKC_3402502_10]** 

15. **Marketing and Advertising Ramp-Up**  
    **Q:** Is the marketing ramp in Q4 focused on holidays or long-term ROI?  
    **A:** Increased investment in Q4 includes ongoing programs driving current results, strong holiday season plans, and everyday marketing initiatives like Frank's hot sauce.  **[MKC_3402502_19]** 

16. **Unconsolidated Operations Earnings**  
    **Q:** Any notable factors affecting earnings from unconsolidated operations?  
    **A:** Strong performance is noted, but they mention a tougher comparison in Q4 due to strong prior-year results and FX impacts, particularly with the peso.  **[MKC_3402502_29]** 

00a133bfce27dff1ef391378efc65911e5e0995c676e58a16a887480620ff61b

- **Strong performance in the Flavors business in the Americas region**, with good results across high innovator growth customers, outperforming the category in areas like performance nutrition beverages, alcoholic and nonalcoholic beverages.  **[MKC_3402502_10]**
- **Expectations of sequential improvement in sales and gross margin from Q3 into Q4**, with improvements in both the Consumer and Flavor Solutions segments.  **[MKC_3402502_21]**
- **Growing share in spices and seasonings in the U.S., focusing on both unit and volume measures**, and increasing total distribution points across core categories, indicating strong competitive positioning.  **[MKC_3402502_26]**

e0753daccf38b5ce8d60df726df6b777a26342afa25ac5877c3dbeabfe959cf8

- **McCormick expects headwinds in the second quarter for their Flavor Solutions segment**, particularly in EMEA, due to **lower quick-service restaurant foot traffic**, which could negatively impact sales and profits.  **[MKC_3378977_15]**
- **Margins are anticipated to be under pressure in Q2**, with less benefit from pricing and increased investments in marketing and price gap management activities, potentially leading to a **deceleration of profit growth**.  **[MKC_3378977_17]**
- **Volume declines in the Consumer Americas segment**, especially in **prepared food categories, mustard, and hot sauce**, remain a challenge and may continue to pressure overall volume growth despite expected improvements.  **[MKC_3378977_11]**

2b489e80369aa94d0bd7bac762633b9013381fc43150c94db25d063207c7f025

1. **Volume Expectations for 2024**  
   **Q:** How are you thinking about volume for 2024 and into 2025?  
   **A:** Management expects volumes to improve throughout 2024, with volume growth anticipated in the second half, continuing into 2025. They acknowledge a cautious view due to consumer uncertainty but believe investments will drive quality earnings growth.  **[MKC_3370798_12]** 

2. **Margin Outlook**  
   **Q:** How can you invest in the business and still improve margins?  
   **A:** Despite increased investments in the business, McCormick plans to improve margins by leveraging cost savings programs like CCI and GOE, low single-digit inflation, and portfolio optimization. They anticipate an operating margin improvement of about **80 basis points** in 2024.  **[MKC_3370798_13]** 

3. **Cautious 2024 Outlook**  
   **Q:** Why is your 2024 outlook cautious, and how does it affect margins?  
   **A:** Due to consumer uncertainty and recent softness in consumption trends, management is taking a cautious view on volumes, particularly in the first half of 2024. However, they remain confident in margin expansion through cost management and expect gross margin improvement of **50 to 100 basis points**.  **[MKC_3370798_19]** **[MKC_3370798_20]** 

4. **Net Sales Growth Cadence**  
   **Q:** What is the expected cadence of net sales growth in 2024?  
   **A:** Organic net sales growth is expected to be relatively consistent through the year. Pricing actions will have more impact in the first half, while volume improvements are anticipated as the year progresses, offsetting the waning effect of prior pricing actions.  **[MKC_3370798_18]** 

5. **Flavor Solutions Trends**  
   **Q:** What are your assumptions for Flavor Solutions' volumes and restaurant traffic?  
   **A:** Management expects continued progress in Flavor Solutions, with strong performance in branded foodservice and flavors in categories like performance nutrition and beverages. Some softness may persist due to customers' volume declines, but improvement is expected throughout 2024.  **[MKC_3370798_22]** 

6. **Consumer Americas Pricing and Share**  
   **Q:** How are you managing price gaps and the impact on market share?  
   **A:** McCormick is surgically adjusting price gaps at the SKU level to drive volume and unit share gains, complemented by increased A&P investment. They acknowledge that price gaps have impacted unit volumes and are focusing on regaining share.  **[MKC_3370798_14]** **[MKC_3370798_17]** 

7. **China Sales Outlook**  
   **Q:** What's the outlook for your China Consumer business?  
   **A:** The company expects China sales in 2024 to be comparable to 2023, with a gradual recovery starting in the second half. Challenges include low consumer confidence and reduced spending, but long-term growth prospects remain positive.  **[MKC_3370798_15]** 

8. **Operating Margin Expansion**  
   **Q:** How will operating margins expand across your businesses in 2024?  
   **A:** Both segments are expected to see operating margin improvements, with no material differences between them. Margin expansion will be driven by cost savings initiatives and portfolio optimization, despite increased investments in price gap management and A&P.  **[MKC_3370798_25]** 

9. **Flavor Solutions Margin Recovery**  
   **Q:** How will Flavor Solutions' margins recover to prior levels?  
   **A:** Management plans to rebuild Flavor Solutions' margins through cost initiatives, portfolio management, and focusing on higher-margin categories. They've improved operating margin from **8% in 2022 to 10% in 2023** and expect further positive movement in 2024.  **[MKC_3370798_32]** 

10. **Q1 Considerations**  
    **Q:** What factors should we consider for Q1 performance?  
    **A:** Q1 will see higher cost increases (**high single-digit inflation**), the highest impact from pricing actions, increased A&P spending up **double digits**, and a higher tax rate. Volume pressures may persist, but improvements are expected throughout the year.  **[MKC_3370798_31]** 

6067967df53aa0e007060858433d2ce47036b4e6c21f8a20919005005de82a14

1. **Guidance Outlook**  
   **Q:** Are you considering raising guidance given strong first half?  
   **A:** Management is confident in their performance but chose to maintain current guidance. They emphasized prudence due to uncertainties in the second half, noting the importance of the upcoming quarters and preferring to keep financial flexibility to invest in growth drivers.  **[MKC_3392934_16]** 

2. **Flavor Solutions Volume Recovery**  
   **Q:** Is volume recovery in Flavor Solutions expected from industry trends or company initiatives?  
   **A:** The anticipated sequential improvement in Flavor Solutions volume is based on McCormick-specific initiatives rather than industry trends. Management is confident due to customer-specific plans, programs, and innovation launches that are expected to drive volume growth in the second half.  **[MKC_3392934_23]** 

3. **Consumer Price Management**  
   **Q:** Will there be more price investments in Consumer segment?  
   **A:** Management expects the current price gap management initiatives to largely continue without significant additional unit price investments. They are confident the programs are working as intended and are not planning further widespread pricing actions this year.  **[MKC_3392934_19]** 

4. **Gross Margin Expansion**  
   **Q:** Can gross margin expansion reach higher end of guidance?  
   **A:** While the first half showed strong gross margin expansion, management remains cautious for the second half due to the loss of pricing benefits and reliance on volume growth to drive further improvements. They are comfortable with the current guidance range of **50 to 100 basis points** for the year.  **[MKC_3392934_20]** 

5. **Flavor Solutions Strategy**  
   **Q:** How are you building resilience in Flavor Solutions?  
   **A:** Management is focusing on diversifying the customer base, shifting towards higher value-added products and technologies, and targeting fast-growing areas like performance nutrition and non-alcoholic beverages. They are also leveraging their branded foodservice business to drive growth and optimize margins.  **[MKC_3392934_17]** 

6. **Cost Savings Opportunities**  
   **Q:** What are the major cost-saving opportunities ahead?  
   **A:** The company continues to drive cost savings through their Comprehensive Continuous Improvement (CCI) program, targeting all levels of the P&L, including raw materials, SG&A, and A&P optimization. They're also finalizing the transition to a new U.K. Flavor Solutions facility, which will contribute to future savings.  **[MKC_3392934_18]** 

7. **Consumer Behavior Shifts**  
   **Q:** How is consumer behavior affecting different categories?  
   **A:** Consumers are shifting towards cooking at home and shopping the perimeter of the store, favoring fresh ingredients and seeking flavor enhancements. This benefits core categories like Spices and Seasonings but has led to softness in areas like frozen and Asian products.  **[MKC_3392934_25]** 

8. **Shipments vs. Consumption Gap**  
   **Q:** Why is there a gap between shipments and consumption in Americas Consumer?  
   **A:** The gap is due to factors like stronger consumption in the latter half of the quarter, lapping prior year shipments ahead of pricing actions, and retailer inventory adjustments. Management expects shipments to align with consumption as programs continue to drive demand.  **[MKC_3392934_15]** 

9. **Pricing Trends in Spices and Seasonings**  
   **Q:** Spices and Seasonings pricing appears lower; can you explain?  
   **A:** The apparent lower unit pricing is influenced by retailer actions and other factors, not solely due to McCormick's price adjustments. The company's net sales reflect a slight decrease in pricing, consistent with their targeted initiatives on a limited part of the portfolio.  **[MKC_3392934_21]** 

10. **Mexico JV Profit Guidance**  
    **Q:** Is JV profit expected to decline in the second half?  
    **A:** While strong performance was seen in the first half, management anticipates tougher comparisons in the second half due to exceptional results in the prior year. They expect the Mexican joint venture's profit growth to moderate but remain confident in its performance.  **[MKC_3392934_22]** 

11. **Flavor Solutions Margin Improvement**  
    **Q:** Should we expect margin improvements in Flavor Solutions?  
    **A:** Management expects Flavor Solutions margins to improve modestly, aligning with the company's overall operating margin guidance of about **80 basis points** for the year. Sequential improvement is anticipated as volume growth recovers in the second half.  **[MKC_3392934_24]** 

12. **Segment Trends in Second Half**  
    **Q:** Will segment trends be similar in the second half as in Q2?  
    **A:** Management indicated that pricing trends in the second half are expected to be similar to those in the second quarter across the company and segments, with no significant changes anticipated in segment performance.  **[MKC_3392934_26]** 

54c528a5351409c9bf01486cc52f98f15e59d90bee11e98931d757a3c8c267ec

- **Flavor Solutions segment experienced a dip in the second quarter, which could put pressure on margins going forward.**  **[MKC_3392934_24]**
- **Weakness in the Quick Service Restaurant (QSR) sector is impacting Flavor Solutions volumes, raising concerns about demand in this customer segment.**  **[MKC_3392934_23]**
- **There is a gap between shipments and consumption in the Americas Consumer segment, suggesting potential inventory buildup and challenges in aligning sales with consumer demand.**  **[MKC_3392934_15]**

abba16ce66db257b57e2aa46bc3e9ba421f8ae91eac1d193bbbf0d71fc0a1749

McCormick & Company Inc (MKC)

Financials