Spice maker McCormick has reported a 3% year-on-year increase in sales in the first quarter of its financial year, while adjusted operating income declined by 2% to $227 million (€209.3 million).
In constant currency, the Cholula maker saw adjusted operating income increasing by 2% during the quarter compared to the same period last year. It was driven by the favourable impact of higher sales, partially offset by gross margin compression.
Operating income declined to $199 million (€183.5 million), from $207 million (€190.8 million) in the first quarter of 2022, driven by higher special charges.
Lawrence E Kurzius, chairman and CEO of McCormick stated, "We delivered solid first-quarter results which reflect strong demand and early results from our actions to increase our profit realisation in 2023. Our first quarter record sales performance reflects the strength of our broad global portfolio and the effective execution of our strategies. [...]
"These results, combined with the strong demand we continue to expect across our portfolio and our diligent approach to optimising our cost structure, bolster our confidence in delivering our 2023 full-year outlook."
McCormick has reaffirmed its financial outlook for 2023, which was previously issued with the company's fourth-quarter 2022 results.
The company expects to sales to grow in the range of 5% to 7% compared to 2022, while operating income is projected to grow by 10% to 12%,
It anticipates approximately $50 million (€46.1 million) of special charges in 2023 related to previous organisational and streamlining actions.
Excluding the impact of special charges and integration expenses in 2023 and 2022, adjusted operating income is expected to increase between 9% to 11%, the company noted.
Kurzius added, "We have strong growth plans in place, including building momentum with our new products and heat platform, and are delivering on our commitment to increasing our profit realisation. We are confident, with the successful execution of our proven strategies, we will drive profitable growth in 2023."
Read More: McCormick & Company Posts 3% Sales Growth In FY 2022
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