Flavor Solutions sales benefited from higher volumes and pricing
McCormick’s (MKC) Flavor Solutions segment’s sales increased 3.4% YoY (year-over-year) to $0.50 billion, reflecting improvements in volumes and mix and an increase in pricing. However, currency volatility negatively affected the company’s sales growth rate. Distribution gains, promotional activities, and new products supported the company’s top line growth during the reported quarter.
Excluding the unfavorable impact of currency fluctuations, the Flavor Solutions segment’s net sales increased 6.4% YoY. The segment’s volumes and mix improved 5.9%, reflecting increased sales to quick-service restaurants and packaged food companies. Also, its pricing increased 0.5% and supported its top line. Currency fluctuations had a negative impact of 3.0%.
Sales by region
McCormick’s Flavor Solutions segment’s net sales rose 5.9% in the Americas driven by solid volumes and mix and higher pricing. The segment’s volumes and mix registered an increase of 6.2% driven by higher sales to quick-service restaurants and sustained momentum in its base business. McCormick’s management stated that the expansion of distribution, promotions, and new products had driven this demand.
Net sales in Europe, the Middle East, and Africa stayed flat as benefits from higher volumes and pricing were offset by currency volatility. Excluding the impact of currency, the segment’s net sales rose 8.9%, reflecting 7.8% growth in its volumes and mix and a 1.1% increase in pricing. Currency volatility had an adverse impact of 8.9% on the segment in the region. Growth in its volumes and mix was led by higher sales to quick-service restaurants and packaged food companies.
The segment’s sales in the Asia-Pacific region fell 5.2%, reflecting lower pricing and adverse currency rates. Its volumes and mix improved 0.6% in the region, and its pricing decreased 0.5%. Meanwhile, currency fluctuations had a negative impact of 5.3% on the region’s top line growth.