McCormick & (MKC) Gross Margin — Quarter Ended May 31, 2023

Revenue increased compared to the prior quarter and the same quarter last year, while cost of revenue remained level. Gross profit rose and gross margin improved as a result.

Gross margin takeaway

Quarter ended May 31, 2023 · FY2023 Q2

Revenue increased compared to the prior quarter and the same quarter last year, while cost of revenue remained level. Gross profit rose and gross margin improved as a result.

The primary driver was revenue growth with stable cost of revenue, which allowed gross profit to expand and gross margin to improve.
Sequentially, revenue and gross profit were higher, and gross margin improved. Year-over-year, all three metrics also showed improvement.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

37.1%

Gross profit

$615.5M

Revenue

$1.7B

Cost of revenue

$1.0B

Quarter-over-quarter change

+1.1 pts

Year-over-year change

+3.1 pts

Quarterly gross margin trend

A four-quarter view of the revenue and direct-cost bridge behind gross margin.

Period	Revenue	Gross profit	Cost of revenue	Gross margin
Feb 28, 2023	$1.6B	$562.9M	$1.0B	36.0%
May 31, 2023	$1.7B	$615.5M	$1.0B	37.1%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Feb 28, 2023

+1.1 pts

Year-over-year change

May 31, 2022

+3.1 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

The primary driver was revenue growth with stable cost of revenue, which allowed gross profit to expand and gross margin to improve.

Sequentially, revenue and gross profit were higher, and gross margin improved. Year-over-year, all three metrics also showed improvement.

Monitor the trend in cost of revenue relative to revenue, as any shift could affect gross margin.