HUNT VALLEY, MD. — Net income at McCormick & Co. in the second quarter ended May 31 totaled $184.2 million, equal to 69¢ per share on the common stock, up 21% from $152.1 million, or 57¢ per share, from the same period in 2023. Sales fell 1% in the second quarter to $738.7 million, primarily due to volume declines in Flavor Solutions, which were offset by volume growth in the Consumer segment, the company said.

The manufacturer of spices, seasoning mixes, condiments and flavors posted $234.1 million in operating income for the period, up 5.5% from $221.8 million in the second quarter of 2023. Adjusted earnings per share came in at 69¢, exceeding analyst estimates of 59¢.

For fiscal 2024, McCormick reaffirmed projections for sales, operating profit and adjusted earnings per share. Operating income is expected to increase by 8% to 10% this year, the company said, with sales projected to range between -1% to 1% on a constant-currency basis compared to 2023. Earnings per share are expected to be $2.76 to $2.81 this year versus $2.52 last year.

A bright spot was Europe, the Middle East and Africa (EMEA), where McCormick’s second-quarter net sales in the Consumer segment were up 3.9% on a constant-currency basis. The segment, which comprises 57% of sales, includes the McCormick brand, plus Lawry’s, Zatarain’s, Simply Asia, Thai Kitchen and several others.

Brendan Foley, president and chief executive officer, said lower demand from some quick-service restaurant and packaged food customers affected the company’s second-quarter performance, but he expected innovations in Consumer and Flavor Solutions, along with marketing initiatives, to bring about a return to total volume growth.

McCormick has embarked on cost-savings initiatives to boost operating margins, including a $75 million savings target in 2023 from automation and workforce reductions through voluntary retirements. Meanwhile, decisions to discontinue low-margin business and divest a small canning business are expected to affect volume growth this year, the company said.

During a June 27 conference call with analysts, Foley said McCormick’s Mexican product lines were adding to stronger consumption trends in the Americas, and that investments in pricing and distribution led to positive unit share gains during the quarter.

“Despite softness in the overall market, we grew volumes in our Americas Flavors business,” he said. “Our performance with high-growth innovator customers remains strong.”

He added that some of McCormick’s consumer packaged food customers experienced additional softness in volumes within their own business in both the Americas and EMEA during the second quarter.

“We are collaborating with our customers to support their innovation plans, and we are continuing to diversify our customer base over time,” he noted.

The kickoff of the summer barbecuing season is expected to lift product sales, and Foley said McCormick will be launching “nearly four times more grilling, rubs and seasonings compared to 2023.” He indicated early results were positive from Frank’s RedHot sauces and flavors and its squeeze bottle format launched this year. McCormick also has partnered with Max Greb, known online as Max The Meat Guy, to create three Grill Mates spice blends.

Foley said sales from new products are expected to nearby double in the second half of 2024 compared to the first half, with a “meaningful portion” coming from heat and infused products in both business segments.

“We expect (the products) to continue to be a long-term growth accelerator globally for total McCormick, (and) we are uniquely positioned to win in heat with our iconic brands … and expertise that we have been building for decades,” he said.

McCormick also said Marcos Gabriel, senior vice president, global finance and capital markets, will become executive vice president and chief financial officer, effective Dec. 1. Gabriel will take the place of Mike Smith, who has been CFO and executive vice president since 2016. Smith will retain the latter title until his retirement Feb. 25, 2025, according to the company.