HUNT VALLEY, MD. — Pricing actions continued to support McCormick & Co.’s financial performance during the first quarter of fiscal 2024 while the company struggled to regain volume share. Part of the volume shortfall was due to strategic decisions made this past fall, but also because of weakness in some prepared food categories, notably frozen food and Asian foods.

For the quarter ended Feb. 29, McCormick earned $166 million, equal to 62¢ per share on the common stock, and an improvement over the year prior when the company earned $139 million, equal to 52¢ per share.

Quarterly sales rose to $1.6 billion from $1.56 billion during the first quarter of fiscal 2023.

Constant currency sales growth reflected a 3% increase from pricing actions, partially offset by a 1% volume and mix decline attributable to the discontinuation of a low margin business and divestment of a small canning business. Underlying volume and product mix was flat compared to the first quarter of the prior year, according to the company.

“Sequentially from the fourth quarter, volume trends improved in both Consumer and Flavor Solutions,” said Brendan M. Foley, president and chief executive officer, during a March 26 conference call with securities analysts. “We believe this improvement is an indication of continued progress as we remain focused on driving quality top-line growth throughout our portfolio.”

McCormick & Co.’s operating income increased to $234 million in the first quarter of 2024 compared with $199 million in the first quarter of 2023. Excluding special charges, adjusted operating income was $238 million in the first quarter of 2024 compared with $227 million in the year-ago period. In constant currency, adjusted operating income increased 4% from the year-ago period driven sales and gross margin expansion partially offset by higher selling, general, and administrative expenses.

“Consumers remain challenged,” Foley said. “Two years of steep inflation has had an impact, and many are exhibiting value-seeking behavior. While food inflation is slowing, its compounded impact is still being felt by consumers. Budgets are stretched, resulting in choiceful spending decisions, a trend that is continuing from the fourth quarter.

“In the first quarter, with higher inflation in the foodservice channel and slowing retail food prices, we broadly saw a shift from food away from home to food at home consumption in our major markets. We are also seeing improvement in center store categories and some softness in restaurant traffic across all regions.”

Consumer business segment sales rose 1% to $922 million from $910 million, reflecting a 3% increase from price increases that were offset by lower volume of 2%. In McCormick’s Americas region, sales were comparable to the first quarter of 2023, according to the company. Pricing actions were offset by a 3% decline in volume and product mix.

Flavor Solutions business unit sales rose 4% to $681 million from $656 million the year before. In constant currency, sales increased 2%, including a 1% decline from the canning business divestiture. In the Americas, Flavor Solutions sales rose 5%.

“Volume growth in our Flavors business is strong across key categories, including outpacing the category in alcoholic beverages and performance nutrition,” Foley said.

In fiscal year 2024, McCormick & Co. expects sales to be in a range of down 2% to zero compared to fiscal 2023 sales of $6.66 billion. Operating income in 2024 is expected to grow by 8% to 10% from $963 million in 2023.

The company expects 2024 earnings per share to be in the range of $2.76 to $2.81, compared to $2.52 earnings per share in 2023.

“Our outlook continues to reflect our prioritized investments in key categories to strengthen volume trends and drive long-term sustainable growth, while appreciating the uncertainty of the consumer environment,” said Michael R. Smith, chief financial officer. “… Our initiatives will take time to materialize. And we continue to expect to return to volume growth during the second half of the year, absent any new macroeconomic wins.