Good morning. This is Faten Freiha, VP of Investor Relations. Thank you for joining today's first quarter earnings call. To accompany this call, we've posted a set of slides on our IR website, ir.mccormick.com. With me this morning are Brendan Foley, Chairman, President and CEO; and Marcos Gabriel, Executive Vice President and CFO. During this call, we will refer to certain non-GAAP financial measures. The nature of those non-GAAP financial measures and the related reconciliations to the GAAP results are included in this morning's press release and slides. In our comments, certain percentages are rounded. Please refer to our presentation for complete information. Today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or other factors. Please refer to our forward-looking statements on Slide 2 for more information. I'll now turn the discussion over to Brendan.

Good morning, everyone, and thank you for joining us. We are pleased to start the year with solid first quarter results that are in line with our expectations. Our performance continues to demonstrate the success of our prioritized investments in the areas that we believe will continue to drive the most value and sustain our momentum for the remainder of 2025 and beyond. McCormick remains a growth-oriented company with robust plans that leverage the demand for flavor and the strength of our brands. Our strategies have proven to be effective by driving growth and compounding that growth over the years. With our strategies and best-in-class leadership, we are well positioned to continue on our trajectory and deliver on our near-term and long-term objectives with industry-leading performance. This morning, I will begin my remarks with an overview of our first quarter results, focusing mostly on top line drivers. Next, I will review how McCormick is positioned relative to an evolving consumer landscape. Then, I will highlight some areas of success and the areas we continue to work on as well as our growth plans. Marcos will then go into more depth on the first quarter results and review our 2025 outlook. And finally, before your questions, I will have some closing comments. Turning now to our results on Slide 4. In the first quarter, total organic sales increased by 2%, primarily driven by volume and product mix growth, and partially offset by pricing in line with our expectations. In Global Consumer, organic sales growth was volume-led, demonstrating continued momentum across key markets. We delivered robust volume growth in all 3 regions. This sustained growth is supported by investments across our core categories, including innovative brand marketing, accelerated innovation aligned with consumer trends, expanded distribution and robust category management initiatives. As expected, volume growth was partially offset by price. In the Americas, price declined due to price gap management plans that were implemented in the second quarter of 2024, and a targeted incremental promotion related to seasonal recipe mixes. In EMEA, we took selective pricing actions to cover rising commodity costs and still maintained volume momentum. For the year to go, we expect price in our Global Consumer segment to be flat. Now to the Global Flavor Solutions segment, where organic sales growth was also volume led. We delivered sequential volume improvement relative to the fourth quarter and are pleased with our results. Volume growth was driven by continued execution of our strategic priorities in Flavors amid a challenging customer environment. Faster growing customers partially offset larger CPG customer softness. In addition, QSR customer performance improved in Asia Pacific and the Americas, led by innovation. Furthermore, across Asia Pacific, including China, we delivered strong volume growth as we partnered with QSR customers on new products and limited time offers. Consistent with prior years, we expect Flavor Solutions volume growth to fluctuate quarterly due to timing of customer activities. However, on a full year basis, we continue to expect to deliver positive volume growth. From a profitability perspective, we delivered results in line with our expectations, as the first quarter was impacted by increased investments in marketing and technology as well as the timing of stock-based compensation expense that shifted relative to the prior year. As we look to the year-ago period, we remain confident in our operating income and earnings growth outlook on a constant currency basis. Moving down to the macro environment, including the current state of the consumer. There is increasing consumer uncertainty and concern over returning to more inflation, and this has impacted consumer sentiment, particularly in the last month. This prolongs the consumer context of 2024, where consumers, especially lower income consumers, are more cautious, exhibiting more value-seeking behavior and tightening their budgets. As many are worried about the future, job security and rising costs, we are seeing this not just in the U.S. but across our key markets. At the same time, we are all witnessing shifts in consumer preferences. They are becoming more health conscious, and this trend has continued to gain momentum. They are cooking at home more often and increasingly shopping the perimeter for protein and produce. As we look at growth in edible categories, unit growth is primarily driven by these perimeter categories. Healthier and better-for-you trends as well as the desire to stretch budgets are fueling a continued interest in cooking from scratch, reinforcing the demand for Flavor and for McCormick's categories. Spices and Seasonings remain the top growing center store category. As a result, consumption trends in our business remain strong. Ultimately, we expect the Global Consumer segment to continue to benefit from these secular trends, and we have the plans and advantaged portfolio to capitalize on them. And in our Flavor Solutions segment, we continue to partner with customers to launch new products or reformulate existing ones to fit healthier lifestyles. Furthermore, our exposure to faster-growing customers allows us to win in several high-growth categories, many of which are benefiting from the trends towards healthier eating. In the context of this environment, McCormick's trends remained strong. Our volume-driven first quarter results and continued strength in consumption trends demonstrate our ability to continue to successfully meet our objectives for the year. We continue to monitor consumer trends. Our focus remains on meeting consumers and customers where they are, delivering value, expanding our presence in growing channels, including mass, club and e-commerce, and aligning them with Flavor as well as helping customers innovate to meet consumers' changing dietary needs. We believe we have the right plans in place, and we remain well positioned to capitalize on secular trends and continue to drive differentiated long-term growth across both of our segments. Let's move to Slide 5, and let me highlight for the quarter, some of the key areas of success. Across our Global Consumer segment, we successfully executed on our plans with increased investment and competitive focus towards driving growth. We improved unit and volume share gains across our core categories in key markets. In the U.S., the vast majority of our categories are growing unit share. Let me provide some color on the categories globally. Starting with Spices and Seasonings. In Americas, EMEA and Asia Pacific, including China, we delivered strong volume growth. In the U.S., we drove unit and volume share growth, outpacing private label for the third consecutive quarter. In addition, we drove market share in Canada and China. In recipe mixes, we continue to strengthen consumption trends in the Americas and drove unit and volume share gains in the first quarter. In the U.S., McCormick gravy and chili recipe mixes were a significant growth driver as they deliver on the value and convenience consumers are seeking. In addition, we are outpacing the total category in total new buyers as well as dollars per buyer. In Canada, we drove dollar unit and volume share gains. In mustard, we made great progress globally over the last 4 quarters and are pleased to see that our plans are driving great results. In the first quarter, we drove dollar, unit and volume share gains in the Americas. In Poland, one of the top mustard consuming countries, our mustard consumption continues to grow, and we are also realizing dollar share gains. In addition, we are gaining dollar share in the U.K. In hot sauce, our plans continue to yield great results. In the U.S., we drove positive unit share gains reflecting significant progress. Distribution gains as well as investments in differentiated brand marketing, including a strong Super Bowl activation, and innovation, continue to fuel our performance. Outside of the U.S., we are gaining market share in France, the U.K. and Australia. Additionally, we continue to make progress on total distribution points. In the Americas, we significantly expanded TDPs across Spices and Seasonings, recipe mixes and hot sauce in the Americas. In EMEA, we are seeing broad-based distribution gains in Spices and Seasonings and hot sauce. We are also gaining distribution in high-growth channels like discounters and e-commerce. In Asia Pacific, our business in China is recovering gradually relative to the prior year, as expected. We delivered strong performance amid a continually challenged environment. Growth in our categories, including spices and seasonings and condiments outpaced the market, which included the Chinese New Year holiday. Moving to Flavor Solutions. We saw strength in our technically insulated high-margin product category, Flavors. In Flavors, in the Americas, we remain focused on being the partner of choice across our 4 taste competencies: savory, heat, naturally sweet and citrus and fruit. As a result of this continued focus, we are winning new customers and gaining share. We outperformed the industry across many end categories, including alcoholic and nonalcoholic beverages as well as snacking bars. Partially offsetting this is the softness we continue to see in larger CPG customer volumes. QSR trends improved in the Americas and in Asia Pacific. In the Americas, we are continuing to drive innovation with our customers, driving volume growth amid soft foot traffic. In China and Australia, our customers' new products and promotions are driving strong volume growth. In Southeast Asia, volume growth benefited from our customers lapping the impact of geopolitical boycotts in the prior year. Let me now touch on some areas where we are seeing some pressure. The areas of pressure are primarily in our Flavor Solutions business. In the Americas and in EMEA, some of our CPG customers continue to experience softness in volumes within their own businesses. We continue to work on offsetting these trends through innovation and collaboration with customers and by winning new customers. The foodservice environment remains challenged. While our food away-from-home performance continues to outpace the industry, we are seeing flat performance in branded foodservice in the Americas, as well as some of our customers are seeing softness in their volumes due to a slowdown in foot traffic. QSR traffic remained soft in EMEA. We have seen this pressure impact our results for several quarters. It's difficult to predict QSR traffic. However, we are collaborating with our customers as they focus on improving their volumes through innovation and value and align with consumer trends. As outlined on Slide 6, our growth plans remain consistent to drive growth through category management, brand marketing, new products, our proprietary technologies and our differentiated customer engagement. Our growth levers are supported and enhanced through data and analytics as we continue to accelerate our digital transformation. Our base business is strengthening across major markets and core categories. And we have a number of initiatives in flight that will continue to drive this performance and differentiation. Let me focus on brand marketing, as our plans across all categories are supported by our global brand marketing initiatives. We are prioritizing investments to connect with consumers and fuel growth. Our differentiated brand marketing is driven by a combination of factors. In addition to maintaining a high share of voice, we are committed to having the best content in our categories, content that inspires and educates consumers and reaches them at the right points on their path to purchase and on their flavor or diet journey. From flavor exploration to menu planning, to shopping and cooking, and even to eating and sharing the experience online. In the first quarter, brand marketing spend increased against the high spend in the prior year as expected. This increase was broad-based and a key driver in supporting volume growth for this quarter as well as for maintaining our volume momentum for 2025. Through our efforts across multiple channels and by leveraging our digital capabilities, we are driving further household penetration and increasing buy rates across our core categories. Our holiday campaigns across our regions proved successful. Our marketing campaigns in the Americas highlight our everyday value, innovation and point of difference to consumers and are supporting our volume growth and driving share gains. Our Frank's Super Bowl activation campaign with Paris Hilton was very successful. We gained new buyers, and media and consumer sentiment was incredibly positive. To wrap up our growth plans, although we are navigating in a difficult environment, we remain confident in the long-term health of our business and in our fundamentals, and in delivering our 2025 financial outlook on both near-term and long-term objectives. We remain focused on investing behind our growth levers to continue to drive differentiated performance. Now over to Marcos.

Thank you, Brendan, and good morning, everyone. Starting on Slide 8. Our total organic sales grew 2% for the quarter. This increase was volume led, with more than 2% volume and product mix growth, partially offset by pricing. Moving to our Consumer segment on Slide 9. Organic sales increased 1% as volume growth of 3% was partially offset by a 2% impact of pricing investments. Consumer organic sales in Americas was flat; 3% volume growth was offset by price investments. Volume growth was strong across our core categories and was driven by our investments in brand marketing, innovation and category management. In terms of pricing, the decline primarily reflects the price gap management investments that were mostly in place in the second quarter of 2024, as well as incremental and targeted promotional activities. In EMEA, we grew consumer organic sales 4%, driven by a 2% increase in volume and a 2% increase in price. The volume growth was broad-based across product categories in our major markets. We're pleased with the strong sustained volume growth in EMEA. As Brendan mentioned, we took selected pricing actions in EMEA to offset commodity costs. Consumer organic sales in the Asia Pacific region increased 3%, driven by a 2% increase in volume and a 1% contribution from price. This growth reflects the gradual recovery we expected in China. We're pleased with our performance and expect these trends to continue through 2025. Turning to our Flavor Solutions segment on Slide 10. First quarter organic sales increased 3%, driven by volume growth of 2% and a 1% contribution from price. In the Americas, Flavor Solutions organic sales increased 4%, reflecting 3% price contribution and 1% volume growth. Our results reflect a strong performance with faster growing flavor customers and improved QSR growth, which were partially offset by soft CPG customer volumes. The price contribution is primarily related to currency in Latin America. In EMEA, organic sales decreased by 4%, including a 2% decline from price and a 2% impact of lower volume and product mix, reflecting the impact of soft CPG and QSR customer volumes. In the Asia Pacific region, Flavor Solutions organic sales increased 15%, with volume growth of 16%, driven by QSR customer promotions, limited time offers as well as new products, partially offset by pricing. Moving to Slide 11. As expected, gross profit margin expanded by 20 basis points in the first quarter versus the year ago period, driven primarily by the benefits from our Comprehensive Continuous Improvement program, or CCI. Selling, general and administrative expenses, or SG&A, increased relative to the first quarter of last year, driven primarily by a shift in timing of our stock-based compensation expense from the second quarter into the first quarter, as well as increased investments in technology and brand marketing as expected. For the quarter, adjusted operating income declined by 5%. Excluding the impact of currency, adjusted operating income decreased by 3%. This decline was driven by the increased SG&A expenses I just mentioned. Our first quarter adjusted effective tax rate was 22%, compared to 26% in the year ago period. Our tax rate this past quarter benefited from discrete tax items. Our income from unconsolidated operations in the first quarter declined 18% primarily due to the strengthening of the U.S. dollar against the Mexican peso. Turning to our segment operational results on Slide 12. Adjusted operating income in the Consumer segment decreased 17% or 16% in constant currency. The decrease was primarily due to pricing and increased SG&A costs, including brand marketing and technology investments, partially offset by cost savings generated by our CCI program. Looking ahead, we expect Consumer adjusted operating income margin expansion to normalize in the year-to-go period. In Flavor Solutions, adjusted operating income increased 28% or 33% in constant currency, driven by product mix, pricing and CCI-like cost savings, partially offset by increased SG&A costs. We continue to make progress in expanding our operating margins in line with our objectives. The bottom line, as shown on Slide 13, first quarter 2025 adjusted earnings per share was $0.60 as compared to $0.63 for the year ago period. This decrease was primarily due to the SG&A increase I mentioned earlier, as well as the increasing impact of currency on our operating profit and unconsolidated results, partially offset by a more favorable tax rate. The impact of currency on adjusted earnings per share is about $0.03 per share. On Slide 14, we summarize highlights for cash flow and balance sheet. Our cash flow from operations for the first quarter of 2025 was $116 million compared to $138 million in 2024. The decrease was driven primarily by higher cash used for working capital, partially offset by lower incentive compensation. We returned $121 million of cash to shareholders through dividends and used $37 million for capital expenditures. Note that the timing of capital expenditures would fluctuate on a quarterly basis, depending on the phasing of initiatives equaling projects to increase capacity and capabilities to meet growing demand, advance our digital transformation and optimize our cost structure. Our priority remains to have a balanced use of cash. This means funding investments to drive growth, returning a significant portion of cash to shareholders through dividends, and maintaining a strong balance sheet. We remain committed to a strong investment-grade rating and expect to continue to deliver strong cash flow in 2025 driven by profit and working capital initiatives. Now turning to our 2025 financial outlook on Slide 15. We are maintaining our guidance for the year. Our outlook continues to reflect our prioritized investments in key categories to strengthen volume trends and drive long-term profitable growth, while appreciating the current level of uncertainty in the consumer and macro environment. First, let me address tariffs. As you know, the situation remains fluid. At this time, we plan to offset costs related to U.S. import tariffs on China with our CCI savings and some very targeted price adjustments. Our focus remains on safeguarding the health and competitiveness of our brands, sustaining the growth momentum in our business and maintaining transparency with our customers. We don't believe our current planned actions will be material to the total business or will have a significant impact on our volume mix outlook for the year. That said, due to continued uncertainty on this topic, our outlook does not include any additional impacts from tariffs that could potentially be implemented this year. As things evolve, we will provide updates on our outlook within our typical reporting cadence. Turning now to the details of our outlook. Currency rates are still expected to have a 1 point negative impact on both net sales and adjusted operating income and 2 points on adjusted earnings per share. At the top line, we continue to expect organic net sales growth to range between 1% and 3%, and for growth to be volume-led. In the year-to-go, we expect to deliver total volume growth across both segments, and for total pricing to be flat to slightly positive, primarily driven by Flavor Solutions. For China, our outlook assumes a gradual recovery, and we expect China consumer sales to improve slightly year-over-year. We saw this come through this past quarter, and we expect it to continue for the rest of the year. Our 2025 gross margin is still projected to range between 50 to 100 basis points higher than 2024. This gross margin expansion reflects favorable impacts from product mix and cost savings from our CCI program, partially offset by the anticipated impact of a low single-digit increase in cost inflation. Consistent with historical trends, we expect our gross margin expansion to build throughout the year. In addition to our gross margin expansion, we expect SG&A benefits from cost savings to be partially offset by investments in technology as well as brand marketing to drive volume growth. For the year, we expect our brand marketing spend to increase in the high single digits, reflecting a double-digit increase, partially offset by anticipated CCI savings. As a result, our adjusted operating income is expected to grow 4% to 6% in constant currency. Similar to our gross margin trends, we expect growth in our operating income to build throughout the year. This remains a balanced outlook that gives us the flexibility to continue to invest in the business, while expanding margins in line with our 2028 objectives. In terms of tax, we expect our tax rate to be approximately 22% for the year compared to 20.5% in 2024, where we benefited from a number of discrete tax items that are not expected to repeat in 2025. We expect our income from unconsolidated operations to decline in the mid-teens range in 2025, reflecting the strengthening of the U.S. dollar against the Mexican peso, which is impacting the results of our largest joint venture, McCormick de Mexico. To summarize, our 2025 adjusted earnings per share projection of $3.03 to $3.08 on a reported dollar basis reflects current steel headwinds and the impact of increased tax rate relative to the prior year. On a constant currency basis, our adjusted EPS is still expected to grow between 5% and 7%. To wrap up, our continued volume growth underscores that our plans are yielding results and sustaining this differentiated performance. Looking ahead, our cost savings programs will continue to fuel our investments and drive margin expansion. And we remain confident in the underlying fundamentals of our business and in delivering on our 2025 financial outlook, near-term and long-term objectives.

Thank you, Marcos. Before moving to Q&A, I would like to close with our key takeaways on Slide 16. While the environment has gotten more challenging and consumer sentiment has been impacted, we have managed through these environments in the past and we expect to navigate through this successfully as we continue to refine and align our plans. The long-term trends that fuel our categories, consumer interest in healthy, flavorful cooking, key flavor exploration and trusted brands, continue to be strong. And importantly, consumer interest in cooking is growing. We continue to execute on our strategic road map with speed and agility and in alignment with consumer trends, further capitalizing on our attractive categories across segments and driving category leadership, our results demonstrate that we are investing in the areas that drive the most value, and we expect to maintain this momentum. We also expect to continue to expand margins and manage our costs as we are investing in the business. These improvements are led by our favorable product mix and cost savings programs. Our performance historically and over the last few quarters, coupled with our growth plans, give us confidence in achieving our near- and long-term objectives. Ultimately, we believe the execution of our growth plans will be a win for consumers, customers, our categories and McCormick, which will continue to differentiate and strengthen our leadership. Finally, I want to recognize all McCormick employees for their dedication and contributions and reiterate my confidence that, together, we will continue to drive differentiated results and shareholder value. Now for your questions.

Our first question will be from Andrew Lazar with Barclays.

I think on last quarter's call, you had guided to operating profit in fiscal 1Q to be sort of flat to slightly down. And as you mentioned, operating profit fell about 5% in the quarter. The decline was heavily weighted, obviously, to the Consumer segment. I think you mentioned pricing, stock-based comp and brand investments. I think a lot of which were anticipated previously. So I'm just trying to get a better sense for what drove maybe the stronger-than-forecast operating profit decline, particularly in consumer. Was there a timing shift relative to initial expectations or sort of what drove that? And then more importantly, I guess, what now gives you the confidence in sort of reaffirming the full year?

Okay. Andrew, let me kick it off, and I'll have Marcos handle maybe more directly the question on operating profit. At a high level, Q1 was roughly in line with what our expectations were. And in fact, we had planned for Q1 to be sort of a different quarter than what the rest of the year will look like. And I think you kind of see that play out in a lot of our prepared comments. But there are timing elements that were called out before, like you mentioned, that will certainly impact that. But we do remain confident in the year-to-go period, and it's really supported by strong sales performance. Marcos, do you want to...

Yes, sure. So Andrew, on the operating profit, I mean, you mentioned minus 5% decline in Q1. Adjusted for currency, it was minus 3%. So on a constant currency basis, 3%. A couple of timing-related items, as we mentioned on the call. One is the shift of the stock-based compensation from Q2 into Q1. And I feel normalized for that, and ROP would be essentially flat for Q1. Also, we had some timing in terms of brand marketing and technology investments hitting in Q1. We're going to continue to have some of those investments in the future quarters of the year, but a little bit of timing between Q1 and Q2 there as well. In the Consumer space, specifically, we had to lap the price gap management investments that we put in place in 2024. So that was a headwind that's going to go away. If you think about it on the Consumer operating profit, a decline of 16%. I mean 2/3 of it will roll away in the next quarter, which is the pricing and the stock comp shift. And FX was a bigger headwind. I mean we're trying to focus on the things that we can control. It was a bigger headwind. Now we're seeing FX moderating a little bit going forward. So that's where we're keeping the guidance as it is. And then in terms of the guidance question, yes, we do have a lot of confidence in the guidance that we've put out there. I mean top line is coming as we expected. We will continue to see growth in both segments, Consumer and Flavor Solutions, for the full year. In the Consumer, you're going to see growth all quarters and across all regions for the balance of the year. I'm pleased with the Flavor Solutions performance this quarter, driving not only top line but also profitability. And as you saw, profitability was up 240 basis points on the back of CCI, product mix and as well as the top line that drives leverage through the P&L. So happy there as well. Gross margin will build throughout the year, as I said on the call, 50 to 100 points on a full year basis on the back of the CCI program. We want to invest back in the business, as we said before, in terms of SG&A, particularly brand marketing. And we feel confident about expanding margins for the full year between 4% and 6% operating profit growth for the full year, primarily driven by the Flavor Solutions segment.

Next questions are from the line of Peter Galbo with Bank of America.

I have two questions regarding the Americas Consumer business. Brendan, I'll direct the first one to you. You mentioned that the management of the price gap in the first quarter may have been influenced by seasonal factors. Is the expectation that consumer prices will remain flat moving forward? I'm curious if, on a more detailed level within the Americas, there may still be a chance for negative pricing due to some additional investments. It seems you had positive returns from promotions during the holiday season, and I'm wondering if you'll approach the grilling season with a similar strategy, potentially balancing that with the EMEA region. I'm looking to understand the underlying factors affecting the flat pricing for consumers compared to the overall company performance, particularly by region.

Thank you, Peter. To start, we had a very strong sales performance across the company in both segments. Regarding the Consumer segment, which your question focused on, we experienced significant volume growth of 2.6% across all regions. This reflects the strength we have previously communicated in earlier quarters. There was also a pricing component, particularly in the Americas during Q1, linked to an additional promotion on our recipe mix business. The cold weather experienced in many parts of the country positively impacted sales of chili and gravy. We took advantage of this opportunity to drive that business harder in the first quarter since it’s an ideal time for those products. This growth is evident in our volume and market share performance within that segment. We have the flexibility to adjust our spending across the business where necessary, and this situation may have contributed to outcomes beyond what was expected from our price management plans. Looking ahead, we don’t foresee pricing having a significant impact on a global basis, though in the Americas, we plan to maintain the same price investments as last year. There will be some pricing adjustments in EMEA to address commodity pressures, but they are expected to grow in volume. Overall, volume growth in the Americas remains the main driving factor. You can see this strength in our consumption and sales results, although there is often a gap between them in the first quarter following a strong holiday season. I’ll stop here to see if I’ve answered your question, and I'm happy to take on more.

No, Brendan, I think that's very helpful context. As a follow-up, we've received a few questions this morning regarding shipment versus consumption in the Americas Consumer segment. Were there any dynamics you noticed related to inventory carryover after Thanksgiving? Additionally, was there any timing shift concerning Easter that you're considering as we think about consumption?

Sure. Let me provide some additional context regarding shipments in relation to consumption. We have minimal concerns about our shipment versus consumption profile. To elaborate, our holiday program was very successful, leading to significant consumption not only in the fourth quarter but also in the first quarter. This strong consumption trend has been a key factor supporting our sales growth over the past two quarters. The trend of consumption outpacing sales in the first quarter is a familiar pattern we've observed in our inventory dynamics over the last decade. However, there are two other factors this quarter that are somewhat new. Firstly, we are not experiencing early shipments for Easter as we did last year, given that Easter is later in April this year. Therefore, there isn't much happening related to Easter in the first quarter as there was in the previous year. Secondly, we have a robust innovation plan for the year, which commenced earlier than usual, resulting in increased slotting expenses that align with the shipment of new items. This indicates that we are off to a strong start in terms of innovation, although the increased spending in this area during the first quarter is higher than last year's. Nonetheless, I don't see these two aspects as structural problems; they are part of the natural cycles we undergo. Overall, the profile looks like what we would expect, and if we combine the fourth and first quarters into one figure, it aligns perfectly with our goals.

Our next questions are from the line of Alexia Howard with Bernstein.

So can I focus on the growth of sales in Flavor Solutions? I'm wondering if you could quantify or at least comment on how much new high-growth customers are adding to your sales or your volumes in that segment? And then by contrast, how much does the QSRs benefited also in there? And then offsetting that, you had the CPG customer weakness, how big was that compared to some of the other dynamics? And then I have a follow-up.

Thank you for the question, Alexia. We had a strong quarter in Flavor Solutions overall. In fact, we experienced volume growth in two of our three regions, primarily in the Americas and Asia Pacific. To provide some additional context, I can't break down the specifics of each segment or categorize the volume in numerical terms. However, I can share that we performed well with high-growth innovator customers in emerging segments, particularly those related to health and wellness, and we continue to see strong growth from these customers. We're also acquiring new clients, which contributes to our volume growth and market share, helping to diversify our sales mix and portfolio. Additionally, we saw solid performance in the QSR business despite weak traffic industry-wide, driven by successful innovation and new customer acquisitions. In the Americas region, it was the QSR customer base along with smaller, innovative customers in Flavor that helped mitigate the challenges we faced with larger CPGs. In the Asia Pacific region, the strong QSR performance was a key driver, bolstered by customer promotions and limited-time offers, along with the recovery from geopolitical boycotts experienced a year ago. Conversely, EMEA has faced ongoing challenges, although we note a sequential improvement quarter-on-quarter. It remains soft in terms of QSR traffic, resulting in a decline for that region. We are noticing some softness among larger CPG companies, not only in the Americas but also in Europe, which aligns with trends reported by other companies. Despite this, we generally outperform the broader market on a category basis, although overall volumes remain weaker.

Great. And as a quick follow-up. It's probably too early to say anything, but RFK Jr. seems to be pursuing an agenda of driving out artificial additives across packaged food and probably in the restaurant sector as well. As I said, it's probably too early to tell because he's just turned off on the scene, but are you seeing any uptick in reformulation efforts on the part of your CPG or restaurant customers in the U.S.?

Yes. With regard to colors, just let me first provide some context on the McCormick portfolio, our consumer portfolio. We don't really have a lot of usage of color in our products, as you might expect, at least very, very few overall. Now with respect to formulations, we are seeing more activity on that, definitely. Now reformulation activity has always been a part of the work that we do with our customer base, and we've been doing that for quite some time. But we are seeing a tick-up in reformulation activity, and that would align with what you're seeing and being written out in the news media regarding what we're hearing from the new administration. But it isn't just colors, it's also sodium. We've always been working on sodium. It's also about just working on trends that are certainly positive, like hydration, functional foods, high protein. We're seeing reformulation activity across our customer base, but also a lot of new product activity, too.

The next question is from the line of Ken Goldman with JPMorgan.

Understanding the situation changes daily or sometimes hourly, what should investors be looking for in terms of key tariff risks ahead, as well as, I guess, related headwinds and actions that the company will take in response? And I know these are myriad in nature, but anything you're really keeping an eye on that we should also be following, I think, would be helpful.

Just to clarify, we have already accounted for the existing tariffs in our forecasts and guidance for the year, particularly those imposed on China. As for future developments, it is challenging to predict which areas we need to focus on since the specifics are still uncertain. We are closely monitoring the latest news and potential plans and considering various scenarios regarding how these tariffs might be enforced. There is considerable variability based on recent reports, but we remain aligned with the insights others are gathering. From a broader perspective, we have managed similar situations in the past, and we are confident we can navigate them successfully in the future, depending on the specifics of the tariffs, whether by country or type of raw material or finished product. It is indeed complex, but we are ready to address it once we have more clarity on what to expect.

Okay. And then a quick follow-up. I recognize that given quarterly guidance isn't always your practice. But just in light of some of the moving pieces in the first half and some of the conversation about pricing and SBC shifts, how would you like us to sort of think about directionally EBIT and EPS in 2Q either relative to 1Q or versus a year ago? Just I think any help you can get in or sort of narrowing that would be useful.

Yes. Ken, I'm going to maybe kick it off and then ask Marcos to add more context to this. But kind of back to my opening remarks, we always saw Q1 as being a very different quarter than the rest of the year. And so I think that would be the picture that we continue to paint. We felt like we've made that kind of clear when we closed the fiscal year in '24. But Marcos, do you want to add to Ken's question?

Yes, Ken. It's challenging to provide quarterly guidance in the current dynamic environment. You can expect continued momentum in our top line growth as we move between Q3, Q2, and Q4. The gross margin will increase progressively, with most of our profitability coming in the second half of the year, which is larger than the first half. Therefore, you should see a more significant positive impact on gross margin in the second half compared to the first. This will reflect in the profit and loss statement as well. We are consistently investing in SG&A each quarter, which is showing positive results in terms of volume from those investments. Profitability will continue to grow alongside the increase in gross margin. You may also notice some timing-related factors that affected Q1 will serve as a tailwind into Q2, and gross margin and operating margin will continue to improve throughout the year.

Our next question is from the line of Robert Moskow with TD Cowen.

Brendan, I wanted to follow up to Andrew's question at the top of the call. You described the results as roughly in line with your expectations, and I'm just trying to drill down a little bit more into the organic growth for Consumer versus organic growth for Flavor Solutions. Just based on tone heading into the results, I would have thought that Flavor Solutions would be a little weaker, Consumer would be stronger given everything you said about the shift to scratch cooking the desire for more fresher foods and the flavors that are used to prepare them. And so this is kind of the reverse in first quarter. And I want to know if that was also in line with your expectations or not. And then more specifically on the chili promotion, is that a profitable promotion? It obviously drove a lot of volume. You said it was incremental. Did it grow profits?

Thank you, Rob. Regarding your question about overall expectations, I believe Flavor Solutions performed better than anticipated, particularly in the QSR volume. In terms of Consumer, our volume was strong, with the Americas up by about 2.9%. The shift to consumption dynamics, which we usually expect, played a role, and we saw consumption levels that were quite robust, continuing from Q4. The holiday season brings increased demand, and we are seeing persistent strength. For China, we anticipated gradual improvement, and we're satisfied with the first quarter performance there, slightly outperforming during the Chinese New Year. The 3% growth we observed was solid, especially considering market challenges and consumer sentiment at that time. Overall, I'm pleased with the volume performance in the Americas and China, and EMEA also did well. We've noticed some pricing pressure in EMEA due to commodity costs, but we’re still seeing volume growth amidst this pricing environment. Regarding pricing strategies and promotional recipes, we closely evaluate their profitability. Our team implements these programs because they are strategically beneficial for the business, foster loyalty, and are financially sensible. Overall, I'm pleased with our first quarter performance, and even if there were slight disappointments in the Consumer numbers, I still believe they were strong. I hope I addressed all parts of your question.

Our next question is from the line of Max Gumport with BNP Paribas.

Recently, companies in the packaged food sector, especially those involved in snacking and some of your key clients in Flavor Solutions, have been experiencing ongoing challenges, which they attribute to consumers feeling financial strain. While you seem to recognize these pressures, it appears you are also linking a significant portion of this to shifting consumer preferences that are benefiting some of your major categories in the Consumer segment. Could you elaborate on the changing consumer preferences you are observing? Additionally, how do you differentiate the current weakness in snacking due to consumers' financial pressures versus shifts in their eating preferences?

Thank you for the question, Max. Regarding snacking trends, it appears the drivers are influenced by both affordability and health and wellness. It's challenging to separate these factors. What we observe is a slight softness in snacking trends, but there are still areas of growth, particularly in value-added segments like protein-based and better-for-you snacks. Snacking alone isn't the issue; consumers are exploring different options throughout the day. In terms of our performance, we believe we're capturing market share from competitors, which helps mitigate some temporary weaknesses we see in the snacking category. From a consumer perspective, overall, consumers remain resilient but are navigating a tough environment. Recently, consumer sentiment has been affected by rising inflation concerns. This situation may extend the cautious consumer mindset we expected for the latter half of '24. Shoppers are careful with their spending on food and beverages and are seeking value. We notice some opting for smaller units, but our larger units are also experiencing growth, indicating that consumers are looking for value per ounce. People are trying to maximize their budget, which is contributing to their preference for perimeter store items for cooking at home, viewed as both healthier and more affordable. In summary, while we started with snacking trends, we're seeing consumers blend various factors, making it difficult to separate them.

The next question is from the line of Steve Powers with Deutsche Bank.

Brendan, I was hoping you could talk a little bit more about what you're seeing in Europe and, I guess, in the EMEA segment as it relates to Consumer. Volume growth there as well this quarter, and you've got some pricing coming through because of the commodity backdrop. But at the same time, you cited other CPG companies in Europe kind of facing parallel dynamics as we're seeing here in the U.S. with consumer weakness. So as you think about the progression of demand in Europe over the balance of the year, I guess, how are you sort of taking you through the scenarios there? And is there incremental investments that may have to be put into place in Europe as well as the year goes on to offset some of that demand weakness?

Thanks, Steve. In Europe, we conduct a lot of proprietary research throughout the year to gauge consumer sentiment regarding cooking, shopping, value, and inflation, among other topics. This research helps us compare consumer sentiment in Europe to that of the U.S. and other major markets. Notably, we are observing similar trends in consumer sentiment between the U.S. and Europe. For instance, more people are cooking from scratch and eating at home than before, and they are actively seeking value. We are also seeing growth in discount retailers, and our e-commerce performance is accelerating as consumers look for convenience. Overall, the behaviors and sentiments from consumers are quite parallel. Concerns about inflation are equally prominent in Europe as they are in the U.S., and we can see this reflected in our data. Therefore, I don’t think there is anything particularly unique happening in Europe that differs from the U.S. at this time.

Okay. Maybe if I could just follow up. So as we observe net positive pricing contributing to your business this quarter and throughout the year, is what we're really noticing commodity-based pricing being balanced by promotional investments and similar factors? Or is the value not quite as strong as in the U.S. despite these dynamics?

The commodity inflation that we're experiencing there is not broad-based; it's very targeted on specific items. And so as you know, like for example, we have a homemade desserts business in France, and so there are very specific items are receiving some inflation there. And so think about this as quite targeted. But still, having said that, we're focused on making sure that we have the right price points on the shelf. It isn't necessarily through promotions only, but it's also through just sort of that – making sure like price gap management that we're getting to the right price point on the shelf. But I do want to illustrate that's more of a targeted issue from a commodity standpoint, not broad-based.

Our next question is from the line of Tom Palmer with Citi.

Maybe just to start out, I wanted to clarify an element of Ken's question from earlier. I appreciate the sales momentum and the expectation for gross margin to build as the year progresses. But I wanted to clarify on SG&A, given some of the timing items that were called out in 1Q. I think traditionally, SG&A dollars in the second quarter are quite a bit higher than we see in the first quarter. Does this still hold this year? Or was there enough pull forward of some of these items into 1Q that will be a bit more balanced?

It is going to be balanced between Q1 and Q2. You should look at those 2 quarters together, Tom, as you think about the SG&A line. There is a shift into Q1, a negative shift into Q1, as I explained, but that's going to be a tailwind into Q2. Brand marketing technology will continue across both quarters. So Q1, you saw some of that, a little bit more heavily than anticipated, but it's going to come back in Q2 as well. We're going to continue to invest on the back of those 2 items. So I would look at it as the combination of Q1 and Q2 for more of a normalized view on SG&A.

Okay. And I wanted to ask on Canada. We've seen headlines about weaker sales for U.S. brands. Are you seeing any of that at this point? And then just any refresher on your exposure to Canada?

In Canada, we had a really strong quarter in terms of consumption and performance, similar to the U.S. I'm aware of what has been reported in the press, but we are not facing any difficulties there. Overall, we are quite pleased with our performance in terms of consumption and sales.

Our final question is from the line of Matt Smith with Stifel.

I wanted to follow up on America's quick-service restaurant trends more generally. You mentioned that traffic was weak, but volumes were actually up. Can you discuss the factors that contributed to this growth despite the traffic challenges and your expectations for the remainder of the year regarding industry traffic trends and your ability to surpass them? Were the limited time offers and menu benefits primarily short-term, or do they continue to support your performance against the current quick-service restaurant traffic trends?

We often characterize this business as inconsistent, with variability from quarter to quarter. One of the factors contributing to this is customer promotions and limited time offers, which can change unpredictably over different periods. This can be hard for us to forecast accurately. Particularly in the Asia Pacific region, we've noticed significantly increased activity. QSRs there have been performing well over the past few quarters, experiencing both store growth and increased overall traffic. This store expansion is a key factor in their overall success, although it does not directly relate to same-store sales. Additionally, winning more business or introducing innovative products helps us improve on last year's performance, allowing us to counteract any negative traffic trends in the industry. We've observed this trend more in the Americas region. This improvement is not just a short-term effect; it reflects our ongoing efforts to enhance our sales mix by acquiring new customers or introducing them to new products. Essentially, this is akin to gaining market share.

Thank you. I'll now turn the call back to Brendan Foley for closing remarks.

Thank you all for joining today's call. If you have any further questions regarding today's information, please feel free to contact me. This concludes our conference call for this morning.