McCormick (MKC 0.77%) held its Q3 2024 Earnings Call on October 1, 2024, at 8:00 a.m. ET. The call was led by Faten Freiha, Vice President of Investor Relations, with key participants including Brendan Foley, President and CEO; Mike Smith, Executive Vice President and CFO; and Marcos Gabriel, Senior Vice President of Global Finance and Capital Markets, and incoming CFO.
Faten Freiha began the call by noting that the company had posted a set of slides on their IR website and mentioned that non-GAAP financial measures would be discussed, with reconciliations included in the press release and slides. She also noted that forward-looking statements would be made, advising participants to refer to Slide 2 for more information.
Brendan Foley then addressed the impact of Hurricane Helene and extended thoughts to all affected. Moving on to the financial overview, Foley reported that McCormick’s third-quarter results aligned with expectations despite an evolving consumer landscape. He highlighted the company’s success in prioritized investments and noted a meaningful milestone of achieving positive volume growth. Foley emphasized the effectiveness of McCormick’s growth initiatives and said detailed plans would be disclosed at the upcoming Investor Day.
In detailing the third-quarter results, Foley reported that sales were flat in constant currency, reflecting steady pricing and a 1% volume increase influenced by a canning divestiture. This growth extended across both the consumer and flavor solutions segments. Foley offered further insights into regional performances, noting volume growth in the Americas and broad-based growth in EMEA. In Asia Pacific, there was strong growth outside China, tempered by challenges within China itself.
Mike Smith provided deeper insights on third-quarter financial results. Total sales matched those of the prior year, reflecting operational successes despite a canning business divestiture. Gross profit margin expanded by 170 basis points, driven by favorable product mix within the flavor solutions segment and continuous improvement initiatives. Smith also touched on the reduced SG&A expenses and better-than-expected operating income, aided by a discrete tax benefit.
Marcos Gabriel then reviewed the 2024 outlook, reinforcing confidence in achieving mid to high-end constant currency sales growth. The discussion indicated continued investments in product innovation and market expansion efforts as drivers for long-term growth. Gabriel reiterated expectations for a strong holiday season, underpinned by increased promotional activities and brand marketing.
Brendan Foley summarized the call by emphasizing McCormick’s strategic roadmap and long-term objectives, reiterating the company’s strong positioning in the market. He acknowledged the resilience of consumers and noted McCormick’s commitment to meeting evolving demands through innovation and investment.
The call concluded with a Q&A session featuring inquiries from various analysts, focusing on areas such as volume improvement, flavor solutions margins, and market dynamics in specific regions such as China and the U.S. The executives expressed confidence in their strategic plans and investments, reaffirming positive outlooks despite some ongoing market challenges.
This concluded the call, with participants appreciating the comprehensive overview and looking forward to further details at the upcoming Investor Day.
