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Business Segments | 9 Months Ended
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Aug. 31, 2023
Segment Reporting [Abstract] |
Business Segments | BUSINESS SEGMENTSWe operate in two business segments: consumer and flavor solutions. The consumer and flavor solutions segments manufacture, market and distribute spices, herbs, seasoning mixes, condiments and other flavorful products throughout the world. Our consumer segment sells to retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce under the “McCormick” brand and a variety of brands around the world, including “French’s”, “Frank’s RedHot”, “OLD BAY”, “Lawry’s”, “Zatarain’s”, “Simply Asia”, “Thai Kitchen”, “Ducros”, “Vahine”, “Cholula”, “Schwartz”, “Club House”, “Kamis”, “DaQiao”, “La Drogheria”, “Stubb's”, and “Gourmet Garden”. Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our business in China, where foodservice sales are managed by and reported in our consumer segment. In each of our segments, we produce and sell many individual products which are similar in composition and nature. With their primary attribute being flavor, the products within each of our segments are regarded as fairly homogenous. It is impracticable to segregate and identify sales and profits for each of these individual product lines. We measure segment performance based on operating income excluding special charges, as this activity is managed separately from the business segments. We also exclude transaction and integration expenses related to our acquisitions from our measure of segment performance as these expenses are similarly managed separately from the business segments. These transaction and integration expenses excluded from our segment performance measure include the amortization of the acquisition-date fair value adjustment of inventories that is included in cost of goods sold, costs directly associated with that acquisition and costs associated with integrating the businesses. Although the segments are managed separately due to their distinct distribution channels and marketing strategies, manufacturing and warehousing are often integrated to maximize cost efficiencies. We do not segregate jointly utilized assets by individual segment for purposes of internal reporting, performance evaluation, or capital allocation. Because of manufacturing integration for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Intersegment sales are not material.
| Consumer |  | Flavor Solutions |  | Total
|  |  | (in millions) |  |
Three months ended August 31, 2023 |  |  |  |  |
Net sales | $ | 937.1 |  |  | $ | 747.6 |  |  | $ | 1,684.7 |
Operating income excluding special charges | 173.3 |  |  | 77.8 |  |  | 251.1 |
Income from unconsolidated operations | 11.9 |  |  | 1.5 |  |  | 13.4 |
Three months ended August 31, 2022 |  |  |  |  |
Net sales | $ | 927.9 |  |  | $ | 667.7 |  |  | $ | 1,595.6 |
Operating income excluding special charges | 183.7 |  |  | 54.9 |  |  | 238.6 |
Income from unconsolidated operations | 6.6 |  |  | 0.9 |  |  | 7.5 |
Nine months ended August 31, 2023 |  |  |  |  |
Net sales | $ | 2,758.7 |  |  | $ | 2,150.7 |  |  | $ | 4,909.4 |
Operating income excluding special charges | 500.3 |  |  | 212.6 |  |  | 712.9 |
Income from unconsolidated operations | 36.5 |  |  | 1.2 |  |  | 37.7 |
Nine months ended August 31, 2022 |  |  |  |  |
Net sales | $ | 2,720.1 |  |  | $ | 1,934.7 |  |  | $ | 4,654.8 |
Operating income excluding special charges and transaction and integration expenses | 475.5 |  |  | 164.0 |  |  | 639.5 |
Income from unconsolidated operations | 23.4 |  |  | 3.8 |  |  | 27.2 |
A reconciliation of operating income excluding special charges and transaction and integration expenses, to operating income is as follows (in millions):
| Consumer |  | Flavor Solutions |  | Total
Three months ended August 31, 2023 |  |  |  |  |
Operating income excluding special charges | $ | 173.3 |  |  | $ | 77.8 |  |  | $ | 251.1 |
Less: Special charges | 2.2 |  |  | 3.9 |  |  | 6.1 |
Operating income | $ | 171.1 |  |  | $ | 73.9 |  |  | $ | 245.0 |
Three months ended August 31, 2022 |  |  |  |  |
Operating income excluding special charges | $ | 183.7 |  |  | $ | 54.9 |  |  | $ | 238.6 |
Less: Special charges | 1.8 |  |  | 1.6 |  |  | 3.4 |
Operating income | $ | 181.9 |  |  | $ | 53.3 |  |  | $ | 235.2 |
Nine months ended August 31, 2023 |  |  |  |  |
Operating income excluding special charges | $ | 500.3 |  |  | $ | 212.6 |  |  | $ | 712.9 |
Less: Special charges | 29.6 |  |  | 17.5 |  |  | 47.1 |
Operating income | $ | 470.7 |  |  | $ | 195.1 |  |  | $ | 665.8 |
Nine months ended August 31, 2022
Operating income excluding special charges and transaction and integration expenses | $ | 475.5 |  |  | $ | 164.0 |  |  | $ | 639.5 |
Less: Special charges | 16.1 |  |  | 21.9 |  |  | 38.0 |
Less: Transaction and integration expenses | — |  |  | 2.2 |  |  | 2.2 |
Operating income | $ | 459.4 |  |  | $ | 139.9 |  |  | $ | 599.3 |
The following table sets forth our net sales, by geographic area, for the three and nine months ended August 31, 2023 and 2022 (in millions):
| Americas | EMEA | APAC |  | Total
Three months ended August 31, 2023 | $ | 1,203.3 |  | $ | 304.4 |  | $ | 177.0 |  |  | $ | 1,684.7 |
Three months ended August 31, 2022 | 1,141.7 |  | 262.9 |  | 191.0 |  |  | 1,595.6 |
Nine months ended August 31, 2023 | 3,475.8 |  | 899.0 |  | 534.6 |  |  | 4,909.4 |
Nine months ended August 31, 2022 | 3,266.8 |  | 841.2 |  | 546.8 |  |  | 4,654.8 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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