11:01 AM EDT, 06/27/2024 (MT Newswires) -- McCormick ( MKC ) on Thursday maintained its full-year outlook amid improving volume trends as fiscal second-quarter results came in better than expectations.

The spices and seasonings producer's adjusted earnings rose to $0.69 during the three months through May 31 from $0.60 a year earlier, above the Capital IQ-polled consensus of $0.59. Sales dipped 1% to $1.64 billion, but topped the Street's view of $1.63 billion. The stock rose 6.1% in Thursday's trading session.

"The investments we made in our consumer segment drove substantial sequential volume improvement in the second quarter, leading to volume growth, and we expect continued momentum for the second half of the year," Chief Executive Brendan Foley said in a statement. "In flavor solutions, lower demand from some quick service restaurant and packaged food customers combined with the timing of customer activities, impacted our second quarter performance."

Sales in the consumer segment ticked down 1% year over year to $904.5 million, as a 1% decrease in prices was partially offset by "modest" volume growth. The company saw robust volume gains across key categories, but these were partially offset by declines in the Asia Pacific region due to the macroeconomic environment in China, as well as decreases in prepared food categories.

Flavor solutions revenue slid to $738.7 million from $747.1 million in the prior-year quarter, partly weighed down by the sale of the company's small canning business, it said.

Gross profit margin expanded 60 basis points to 37.7% at the end of the quarter, boosted by cost savings. Selling, general and administrative expenses increased to $383.7 million from $380.5 million a year ago, according to the company.

McCormick ( MKC ) continues to expect adjusted EPS of $2.80 to $2.85 for fiscal 2024, while the Street is looking for $2.86. It reiterated its forecast for sales to be flat to down 2% for the year. The company expects to return to volume growth in the year and anticipates benefitting from last year's price increases.

"We expect our innovation pipeline across both segments combined with our brand marketing initiatives to accelerate our return to total volume growth," Foley said. "In addition, we remain well positioned with our cost savings initiatives to fuel investments as well as generate operating margin expansion."

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