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McCormick & Company, Incorporated
CEO : Mr. Lawrence E. Kurzius

Quarterly earnings growth(YoY,%)

Lawrence Kurzius says,

Summary of Expected Impact on MKC Stock Movement from Q1 2023 Earnings

• Solid Q1 results with 3% sales growth or 5% in constant currency reflecting strong underlying business performance and effective execution of strategies.
• Expectation of continued top line growth for the balance of the year with strong demand.
• Company’s GOE program yielding results with first-quarter cost savings in line with expectations and expected impact to scale up as the year progresses. $75 million of cost savings expected in 2023.
• Focusing on gross margin improvement with progress seen in Q1 and expectation to fully recover inflation and offset current year inflation through pricing actions and other levers in 2023. Gross margin improvement
• Consumer segment driving growth with solid performance and new growth initiatives set to drive acceleration of growth beginning in Q2.

Brendan Foley says,

Renovation Plan

• Big renovation plan that will be a big lever
• Expected to improve the category

Distribution Points

• Reclaiming distribution points over this year and next year
• Innovation platform will continue building additional distribution points
• Strong levels of brand marketing

Innovation Platform

• Expecting a lot from innovation platform
• Coming out with new items this year

Strong Category Conversation

• Brings together a really strong category conversation with the retailer

Outperforming Competition

• Performance of McCormick and other brands on the shelf continue to outperform competition

Q & A sessions,

First Quarter Sales Growth and Margin Improvement

• First quarter sales growth reflects the strength of the overall portfolio and effective execution of strategies.
• Underlying business performance driven by pricing actions and strong demand.
• Progress on margin improvement reflects urgency to address pressure points from last year.
• Actions to optimize cost structure and recover cost inflation/pricing lag from last year.
• Expect progress to scale up as year progresses.

Growth Plans and Outlook for 2023

• Robust growth plans in place, including product innovation and renovation to drive profitable sales growth.
• Expect to drive accelerated profitable sales growth in balance of the year and have bolstered confidence in delivering outlook for 2023.
• Relentless focus on growth, performance, and people continues to position McCormick to drive sales growth.
• Focus on recovering cost inflation and lowering costs to expand margins for long-term sustainable earnings growth.

Portfolio Pruning and Differentiated Innovation

• Pruning of small parts of the business that were not bringing good return on investment.
• Innovation is differentiated and brings more differentiation to the brand with flavors and blends that are hard to duplicate.
• Renovation of core herbs and spice brands is going to be very differentiating and difficult to follow quickly.
• Many of the things around renovation are either trademarked or patented.

Normalization of Consumption Model

• Shipments were in line with consumption during the first quarter.
• Normal dynamics following a holiday season played out and operating more like they typically do.
• Expect shift to consumption model to play out normally for the remainder of the year.