HUNT VALLEY, MD. — Individual companies are recovering from the COVID-19 pandemic and its after-effects on global supply chains and commodity markets at different rates. While some companies are still grappling with the challenges, McCormick & Co. is seeing a return to normal that is rippling through its business with customer service levels normalizing and opening the door for future promotions and innovations.

“What we saw in the first quarter (is) shipments were in line with consumption, but I think, more importantly, the dynamics that we would typically see in the first quarter following a holiday season played out as it behaved much like a normal period of time,” said Brendan M. Foley, president and chief operating officer, during a March 28 conference call to discuss first-quarter results.

Lawrence E. Kurzius, chairman and chief executive officer, said during the call that McCormick’s customer service levels have normalized and the company is better able to support promotional volumes. With normalized promotion levels also will come additional innovation.

“In branded foodservice, we have a robust 2023 innovation agenda, launching more than double the new items than in 2022, including Frank's RedHot, Nashville Hot, a line of Cholula Street Tacos, McCormick Culinary global blend and a French's Dijon portion-controlled package,” Mr. Kurzius said.

At retail, consumers will start seeing Grillers Choice marinades on shelves and a new line of Stubb’s sauces.

“Leveraging the product successes of 2022, we are extending our Tabitha Brown line into new flavors, formats and channels, and we’re also launching a French's creamy roasted garlic mustard,” Mr. Kurzius said. “In direct-to-consumer, we continue to grow our platform, with new innovative flavors as a testing ground. And in the club channel, we’re launching a world flavors line.”

Net income for the first quarter ended Feb. 28 was $139.1 million, equal to 52¢ per share on the common stock, and down from the first quarter of fiscal 2022 when the company earned $154.9 million, or 58¢ per share.

Quarterly sales ticked up to $1.57 billion from $1.52 billion the year before.

Items affecting profitability during the quarter included divestment of the Kitchen Basics business, the exit of its consumer business in Russia and COVID-related disruptions in China.

“In the first quarter, we drove 3% sales growth or 5% in constant currency,” Mr. Kurzius said. “Our constant currency sales growth reflected strong underlying business performance, with an 11% contribution from pricing, partially offset by a 3% decline in underlying volume and product mix …”

McCormick’s Consumer Segment sales fell to $909 million in the first quarter from $926 million. Operating income rose to $173 million from $167 million.

In the Americas region, Consumer Segment sales increased 4% in constant currency. The increase was driven by pricing, according to the company, but offset by lower volume and product mix as well as from the Kitchen Basics divestiture.

Flavor Solutions Segment sales rose to $656 million from $596 million the year before. Operating income fell to $53 million from $60 million.

Flavor Solutions sales growth was led by the Americas and EMEA regions, the company said. Items affecting the business unit’s operating income included inflation and spending related to supply chain investments.

Management reaffirmed the company’s original guidance for fiscal 2023 of growing sales between 5% and 7% compared to fiscal 2022 and for operating income to grow by 10% to 12% from $864 million in 2022.

“As we look ahead to the balance of the year, we will continue to focus on capitalizing on strong demand, optimizing our cost structure and positioning McCormick to deliver sustainable growth,” Mr. Kurzius said. “We have robust growth plans in place, including building momentum with our new products and heat platform and are delivering on our commitment to increasing our profit realization.”