McCORMICK & COMPANY 2024 Q2 - Quarterly Report

UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549 Form10-Q (MarkOne) oQUARTERLYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 ForthequarterlyperiodendedMay31,2024OR ☐TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Forthetransitionperiodfromto CommissionFileNumber001-14920 McCORMICK&COMPANY,INCORPORATED (Exactnameofregistrantasspecifiedinitscharter) Maryland52-0408290 (Stateorotherjurisdictionofincorporationororganization) 24SchillingRoad,Suite1, (I.R.S.EmployerIdentificationNo.) HuntValley,MD21031 (Addressofprincipalexecutiveoffices)(ZipCode) Registrant’stelephonenumber,includingareacode(410)771-7301 SecuritiesregisteredpursuanttoSection12(b)oftheAct: Trading TitleofeachclassSymbol(s)Nameofeachexchangeonwhichregistered CommonStock,ParValue$0.01pershare MKC.V NewYorkStockExchange CommonStockNon-Voting,ParValue$0.01pershare MKC NewYorkStockExchange Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐ IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(Section232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).Yes☒No☐ Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct. LargeAcceleratedFiler ☒ AcceleratedFiler ☐ Non-AcceleratedFiler ☐ SmallerReportingCompany ☐ EmergingGrowthCompany ☐ Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐ Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yes☐No☒ Indicatethenumberofsharesoutstandingofeachoftheissuer’sclassesofcommonstock,asofthelatestpracticabledate. SharesOutstandingMay31,2024 CommonStock16,614,663 CommonStockNon-Voting252,015,474 TABLEOFCONTENTS PARTI–FINANCIALINFORMATION4 ITEM1FINANCIALSTATEMENTS4 OPERATIONS 23 ITEM3 QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK 38 ITEM4 CONTROLSANDPROCEDURES 38 ITEM2MANAGEMENT'SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOF PARTII-OTHERINFORMATION39 ITEM1LEGALPROCEEDINGS39 ITEM1aRISKFACTORS39 ITEM2UNREGISTEREDSALESOFEQUITYSECURITIESANDUSEOFPROCEEDS39 ITEM3DEFAULTSUPONSENIORSECURITIES40 ITEM4MINESAFETYDISCLOSURES40 ITEM5OTHERINFORMATION40 ITEM6EXHIBITS41 3 PARTI-FINANCIALINFORMATION ITEM1.FINANCIALSTATEMENTS McCORMICK&COMPANY,INCORPORATEDCONDENSEDCONSOLIDATEDINCOMESTATEMENT(UNAUDITED) (inmillionsexceptpershareamounts) ThreemonthsendedMay31,SixmonthsendedMay31, 2024 2023 2024 2023 Netsales $1,643.2 $1,659.2 $3,245.9 $3,224.7 Costofgoodssold 1,023.6 1,043.7 2,027.0 2,046.3 Grossprofit 619.6 615.5 1,218.9 1,178.4 Selling,generalandadministrativeexpense 383.7 380.5 745.3 716.6 Specialcharges 1.8 13.2 6.0 41.0 Operatingincome 234.1 221.8 467.6 420.8 Interestexpense 52.9 52.2 103.2 102.8 Otherincome,net 12.4 12.5 23.5 23.6 Incomefromconsolidatedoperationsbeforeincometaxes 193.6 182.1 387.9 341.6 Incometaxexpense 26.2 40.3 75.8 74.7 Netincomefromconsolidatedoperations 167.4 141.8 312.1 266.9 Incomefromunconsolidatedoperations 16.8 10.3 38.1 24.3 Netincome $184.2 $152.1 $350.2 $291.2 Earningspershare–basic $0.69 $0.57 $1.30 $1.09 Earningspershare–diluted $0.68 $0.56 $1.30 $1.08 Averagesharesoutstanding–basic 268.6 268.4 268.5 268.3 Averagesharesoutstanding–diluted 269.7 269.8 269.7 269.8 Cashdividendspaidpershare–votingandnon-voting $0.42 $0.39 $0.84 $0.78 Cashdividendsdeclaredpershare–votingandnon-voting $0.42 $0.39 $0.42 $0.39 Seenotestocondensedconsolidatedfinancialstatements(unaudited). 4 McCORMICK&COMPANY,INCORPORATED CONDENSEDCONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME(UNAUDITED) (inmillions) ThreemonthsendedMay31, SixmonthsendedMay31, 2024 2023 2024 2023 Netincome $184.2 $152.1 $350.2 $291.2 Netincomeattributabletonon-controllinginterest 1.8 2.0 3.9 2.8 Othercomprehensiveincome(loss): Unrealizedcomponentsofpensionandotherpostretirementplans (1.0) (0.9) (1.2) (1.9) Currencytranslationadjustments 6.6 10.0 4.6 57.0 Changeinderivativefinancialinstruments (0.5) (8.4) (3.8) (13.8) Taxbenefit 1.1 5.2 1.5 6.2 Totalothercomprehensiveincome(loss),netoftax 6.2 5.9 1.1 47.5 Comprehensiveincome $192.2 $160.0 $355.2 $341.5 Seenotestocondensedconsolidatedfinancialstatements(unaudited). 5 McCORMICK&COMPANY,INCORPORATED CONDENSEDCONSOLIDATEDBALANCESHEET (inmillions) May31,2024 November30,2023 (unaudited) ASSETS