HUNT VALLEY, MD. — Brendan Foley, chairman, president and chief executive officer of McCormick & Co., said “demand for flavor” and “proven and powerful brands” drove bottom- and top-line growth for the company’s 2024 fiscal year.
Net income for the year ended Nov. 30, 2024, came in at $788.5 million, equal to $2.92 per share on the common stock, up from $680.6 million, or $2.52 per share, a year earlier. On an adjusted basis, net earnings were $795.6 million, or $2.95 per share, versus $727.3 million, or $2.70 per share, a year ago. Hunt Valley-based McCormick attributed the gain to higher operating income and higher income from unconsolidated operations, including a strong performance by McCormick de Mexico, its largest joint venture.
The results beat Wall Street analysts’ high-end forecast for adjusted earnings per share (EPS) of $2.94. McCormick noted that its adjusted figure excludes special charges that trimmed EPS by 3¢ in fiscal 2024.
“We have proven and powerful brands, and the results we are seeing from our refined and strengthened plans provide confidence in the effectiveness of our strategies and investments,” Foley told analysts in a Jan. 23 conference call. “We made significant progress this past year, and we have plans to continue that momentum in 2025 and beyond.
“Our portfolio’s breadth and reach in consumer and flavor solutions and our shared insights give us a strong understanding of consumer flavor needs preferences, behaviors and trends. We are continuously monitoring these trends across the globe and adapting our strategies accordingly.”
Fiscal 2024 net sales rose 0.9% to $6.72 billion from $6.66 billion in fiscal 2023. McCormick said the top-line increase, at 0.6% in constant currency, was fueled by pricing and volume, with minimal impact from currency. Sales edged up 0.8% organically, reflecting upticks of 0.5% in pricing and 0.3% in volume/mix.
“Demand for flavor remains the foundation of our growth,” Foley said. “Our business is differentiated. We do not compete for calories; we flavor them. Importantly, our opportunity continues to grow no matter where calories are shifting, and the demand for flavor continues to have a long runway. Our products in the Consumer segment help flavor home-cooked meals. And in the Flavor Solutions segment, we are collaborating with many of our customers through reformulations and flavoring to meet the evolving consumer needs for healthy products, including snacks and beverages.”
By business unit for the year, Consumer segment net sales climbed 1.1% to $3.85 billion, with the gain at 0.8% in constant currency. Sales grew 0.8% organically, driven by increased volume, according to McCormick. Operating income, excluding special charges, advanced 1% year over year to $740 million, mainly due to higher sales and cost savings from the Comprehensive Continuous Improvement (CCI) program, the company said.
Net sales in the Flavor Solutions segment for 2024 increased 0.7% to $2.88 million, McCormick said, citing a 1% currency offset benefit from its canning business divestiture. Organic sales rose 0.9%, reflecting a 1.2% uptick in pricing and a 0.3% dip in volume/mix. The unit’s adjusted operating income surged 14% to $330 million, which the company attributed to a favorable product mix and CCI cost savings.
“Sales growth came in close to the high end of our guidance range as we expected,” Foley said about fiscal 2024. “Importantly, we drove total positive volume growth for the year, with the Consumer business delivering 1% volume growth for 2024. We continue to invest in our business as well as drive margin expansion in line with our guidance. Importantly, we made significant progress in advancing our Flavor Solutions operating margins.”
Fourth-quarter 2024 net income totaled $215.2 million, or 80¢ per share on the common stock, down from $219.3 million, or 81¢ per share, a year earlier. Adjusted net earnings, excluding special charges, were $216.5 million, or 80¢ per share, versus $229.9 million, or 85¢ per share, in the prior-year period.
Net sales for the quarter grew 2.6% to nearly $1.8 billion, with organic sales up 1.8% on a 2.2% gain in volume/mix and a 0.4% decrease in price. In the Consumer unit, net sales rose 4% and were up 3% organically, with adjusted operating income down 3%. Flavor Solutions net and organic sales gained 1%, while adjusted operating income was up 5%.
“In the Americas across all categories, we drove unit volume and dollar consumption growth,” Foley said. “Notably, our unit and volume consumption outpaced both branded food peers and private label in the fourth quarter. In global spices and seasonings, we drove solid unit volume and dollar consumption growth across key markets in the Americas, EMEA and Asia-Pacific.”
McCormick continued to “improve on our competitiveness” in the United States for the fourth quarter, with volume consumption topping branded and private label competition, he noted.
“Overall holiday performance was terrific,” Foley said. “We saw high demand and sellout on our displays that featured core holiday items, as well as new innovation. We had strong performance across the portfolio and our holiday limited-time offer. Finishing sugars contributed to our share momentum and were incremental to the category. In recipe mixes, we continue to strengthen consumption trends in the Americas and EMEA driving overall share. In the US, our Cholula line remains a significant growth driver. We are innovating with Cholula recipe mixes, bringing new consumers to the category, particularly with millennials and younger families.”
Also in the Americas, McCormick expanded total distribution points across spices and seasonings recipe mixes, mustard and hot sauce and gained ground in foodservice, Foley said.
“In Americas branded foodservice business, we drove volume growth and expanded distribution across spices and seasonings and condiments, outperforming the industry,” he said. “In addition, we are winning in hot sauce tabletop unit share and with innovation, new distribution, packaging and promotion.”
Looking ahead, McCormick issued its fiscal 2025 guidance. Reported EPS is projected at $2.99 to $3.04 and adjusted EPS at $3.03 to $3.08. The company expects flat to 2% growth in net sales (up 1% to 3% in constant currency), with organic net sales rising 1% to 3%. Operating income growth is forecast at 3% to 5% (up 4% to 6% in constant currency).
McCormick supplies herbs, spices, seasonings, condiments and flavors to retailers, food manufacturers and foodservice operators globally under such brands as McCormick, French’s, Frank’s RedHot, Stubb’s, Old Bay, Lawry’s, Zatarain’s, Ducros, Vahiné, Cholula, Schwartz, Kamis, DaQiao, Club House, Aeroplane, Gourmet Garden, Fona and Giotti.