Good morning. This is Kasey Jenkins, Vice President of McCormick Investor Relations. Thank you for joining today's fourth quarter earnings call. To accompany this call, we posted a set of slides at ir.mccormick.com. [Operator Instructions].

We'll begin with remarks from Lawrence Kurzius, Chairman, President and CEO; and Mike Smith, Executive Vice President and CFO. During our remarks, we will refer to certain non-GAAP financial measures.

These include information in constant currency as well as adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted income tax rate and adjusted earnings per share that exclude the impact of transaction and integration expenses related to the acquisition of our Frank's and French's brands, special charges and, for 2018, the net nonrecurring income tax benefit associated with the December 2017 U.S.

tax reform legislation, which we refer to as the U.S. tax act. 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 which includes the complete information.

As a reminder, 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 statement, whether because of new information, future events or other factors.

As seen on Slide 2, our forward-looking statement also provides information on risk factors that could affect our financial results. It is now my pleasure to turn the discussion over to Lawrence..

Thank you, Kasey. Good morning, everyone. Thanks for joining us. Starting on Slide 4. Our fourth quarter results completed another year of record financial performance, both from our underlying business and the incremental impact of our acquired Frank's and French's brands.

We continue to drive growth, and in 2018, we delivered double-digit sales, operating profit and earnings per share growth. We expanded operating margin while also making significant investments to drive continued growth. We delivered substantial cost savings and our seventh consecutive year of record cash flow.

We achieved our year 1 expectations from the acquisition of our Frank's and French's brands. Our sales growth and focus on profit realization drove strong financial results across both our consumer and flavor solutions segment and reflects the successful execution of our strategies and the engagement of our employees around the world.

We have a broad and advantaged global flavor portfolio, as seen on Slide 5, which we are continuing to grow. No matter where or what you choose to eat or drink, you're probably enjoying something flavored by McCormick every day. This morning, you'll hear about our 2018 accomplishments, which were driven by successes across the portfolio.

Our investments in new products, brand marketing, capabilities and infrastructure continue to drive growth across our categories. In our consumer segment, we had strong U.S. consumption growth, and our Asia Pacific region had another year of outstanding growth.

In our flavor solutions segment, we continued to win with customers, driving base business and new product growth. We also continued our progress on expanding our portfolio with flavor growth while pruning some low-margin ingredient business.

We have a full year of our Frank's and French's brands impacting our business not only in retail condiments and sauces and branded foodservice but now in other categories as well with our Frank's expansion beyond liquids. Growth in these brands accelerated over the course of the year, and we're excited about their trajectory.

Overall, we are confident that the breadth and reach of our portfolio continues to position us to fully meet the demand for flavor around the world and grow our business. Heading into 2019, I'm confident our momentum will continue.

This morning, I will begin with our fourth quarter results, reflect on our 2018 achievements and then share with you some of our 2019 business plan. After that, I will turn it over to Mike, who will go through more depth on the quarter-end results and the details of our 2019 guidance. Let's start with our fourth quarter results on Slide 6.

Starting with our top line. Versus the year-ago period, we grew sales 1% for the total company, including a 1% unfavorable impact from currency. In constant currency, we grew sales 2%, with all regions in both segments contributing to the increase.

Despite significant trade inventory reductions in the U.S., sales growth was driven by brand marketing support, expanded distribution, new products and pricing. In our consumer segment, we grew our constant-currency sales 2% in the fourth quarter. In the Americas, we grew 1%, driven by pricing.

We believe we substantially under-shipped consumer consumption due to trade inventory reductions. We estimate this resulted in the negative 3% impact to the Americas growth rate for the quarter. A portion of this reduction was due to a change in a large retailer's replenishment system, which caused supply chain disruption in November.

We continue to work collaboratively with this retailer to restock their stores. Overall, with this customer as well as some other retailers, the trade inventory reductions resulted in significant out-of-stock situations on high-margin quality items, therefore negatively impacting our fourth quarter adjusted operating income.

Despite these out-of-stocks, our IRI data shows U.S. prices in seasoning scanner sales through multi outlets grew approximately 3% for both the category and McCormick branded, supported by strong holiday advertising and merchandising execution and reflects improving share trends.

Additionally, we had strong growth in unmeasured channels, including club, e-commerce and Hispanic retail chains. We also had strong consumption growth in other parts of our U.S. branded portfolio, and combined with spices and seasonings, we achieved our best fourth quarter consumption performance of the last 5 years.

Our fourth quarter IRI data shows total U.S. branded measured consumption, excluding Frank's and French's, grew 4%. And we estimate, including unmeasured channels, total consumption grew 5%. We're seeing accelerated consumption trends driven by strong marketing and merchandising as well as new distribution.

McCormick branded dry recipe mixes, Stubb's and Kitchen Basics stocks and broths all had high single-digit consumption growth, with dry recipe mixes and Stubb's outpacing their respective categories and Kitchen Basic growing in line with its category.

We're also seeing accelerating trends for Frank's RedHot sauce and French's since we acquired these brands. During the fourth quarter, our IRI data shows Frank's consumption grew 9%, outpacing its category. We continued our sequential improvement on French's mustard.

Mustard volume consumption grew in the quarter, and total dollar consumption growth was aligned with the category. This was the best performance for both Frank's and French's mustard since the acquisition.

In Europe, Middle East and Africa, the EMEA region, constant-currency consumer sales growth was driven by new products, an increase in brand marketing support and continued momentum in France.

And in the Asia Pacific region, our consumer segment momentum continued with double-digit constant-currency growth and increases across all categories and channels. Fourth quarter constant-currency sales growth was the best sales performance in both regions for the year. Turning now to the flavor solutions segment.

We grew sales 3% in constant currency in the fourth quarter, with all 3 regions benefiting from higher volume. In the Americas, we grew in on-trend areas, such as snack seasonings and savory flavors.

We're continuing to work with our customers, particularly those experiencing several historic challenges to provide flavor solutions that deliver clean label and better-for-you attributes. Across all regions, we grew with quick service restaurants, driven by both new customers and new products as well as existing business.

And as we continue to refine and optimize our portfolio, the fourth quarter as well as the full year was impacted by the exit of lower-margin business. Our fourth quarter adjusted operating income and adjusted earnings per share results had a significant negative impact from the trade inventory reductions I've mentioned a moment ago.

At the bottom line, our fourth quarter adjusted earnings per share of $1.67 compared to $1.54 in the fourth quarter of 2017. This increase of 8% was driven primarily by favorable adjusted income tax rate and included an unfavorable impact from currency. Moving from our fourth quarter results.

I'm pleased to share our performance for the full fiscal year, starting with our strong financial results, as seen on Slide 7. We drove 11% constant-currency sales growth, with the incremental sales from our acquired Frank's and French's brands contributing 8% of this growth.

Our underlying base growth increased 3%, driven by new products, brand marketing investments, expanded distributions and pricing actions to offset material cost increases. Our consumer segment grew sales 10% in constant currency, led by the Frank's and French's acquisition impact and underlying base growth driven by the U.S. and China.

Constant-currency sales growth in our flavor solutions segment was 11%, also led by incremental sales from Frank's and French's. All 3 regions delivered flavor solution base growth, including our exit of some lower-margin business.

We grew constant-currency adjusted operating income 19%, driven by higher sales and 180 basis points adjusted gross margin expansion from CCI-led savings and our portfolio shift.

This increase, combined with a lower adjusted effective tax rate and partially offset by higher interest expense and shares outstanding, drove a 17% increase in adjusted earnings per share to $4.97 for fiscal 2018. This increase includes the impact of favorable currency exchange rates versus last year.

With higher sales, CCI and our portfolio shift, we increased our adjusted operating margin to 17.4%, which was a 110 basis point expansion from last year. We expanded adjusted operating margin in both of our segments, hitting record highs in each, while also making investments to drive continued growth.

We reached a record $118 million of annual cost savings, led by our CCI program, our fuel for growth, and are well on our way toward exceeding our full year $400 million goal, having realized $344 million over the past three years. 2018 was the seventh consecutive year of record cash flow from operations, ending the year at $821 million.

We're making great progress with our working capital improvement and expect the programs we have put in place will continue the momentum into 2019. At year-end, our Board of Directors announced a 10% increase in the quarterly dividend, marking our 33rd consecutive year of dividend increases.

We have paid dividends every year since 1925 and are proud to be a dividend aristocrat. Now I'd like to comment on some of our 2018 achievements beyond our financial performance. We've successfully completed the integration of our Frank's and French's acquisition and celebrated the acquisition's 1-year anniversary.

We created value, achieved synergies and are obtaining results according to our acquisition plan. Importantly, we have achieved year 1 sales and earnings per share accretion expectations. By strengthening distribution, category management, effective brand marketing investments and innovation, we are successfully growing Frank's and French's.

As Mike will mention in more detail, we've also made great progress in paying down our acquisition debt and finished the year ahead of our debt-to-EBITDA target. A key driver of sales growth was our brand marketing, which was up 18% over 2017.

Our leadership in digital was rewarded again in 2018 with recognition as the Top 3 brand by Gartner L2 research on their Digital IQ Index. This marked our fifth consecutive year in the top 5 ranking of over 100 food and beverage brands on the effectiveness of our website, digital, social media and e-commerce.

Our investments in constant development, resources to support acceleration as well as programs and items tailored to the e-commerce channel are paying off. We grew local e-commerce sales 41%, driven by strong omnichannel performance.

In the second half of 2018, we began increasing the level of our technology investments as we modernize our information technology systems around the world to a single global platform, including starting the replacement process of our existing ERP system.

This will allow us to align our global operating model with end-to-end processes, simplify our work, better manage risks and, importantly, enable growth. In 2018, we continued to invest further on our global footprint by increasing our capacity to support our growth in the Asia Pacific zone.

We opened a new regional manufacturing facility in Thailand to expand both production capacity and capability to support both segments' growth plans in Southeast Asia. We continued progressing on our global programs to upgrade to modern work environments.

In the second half of 2018, we opened a new Lean-certified global headquarters in Hunt Valley, Maryland, which enabled us to bring nearly 1,000 employees from 4 different Maryland-based office buildings into one location.

The new headquarters incorporates open space that's technology-enabled and accommodates the way employees want to work today and into the future. It fosters greater collaboration and engagement and helps us attract and retain the best talent. And finally, we're making measurable progress toward our 2025 sustainability goals.

And in addition, we committed that by 2025, 100% of our plastic packaging will be reusable, recyclable or able to be repurposed. We're being recognized for our efforts in sustainability.

Just two days ago, at the 2019 Davos World Economic Forum, McCormick was named by Corporate Knights in their 2019 Global 100 Most Sustainable Corporations index, ranking us #1 in food products industry for the third consecutive year and #13 overall. And we were included on Barron's inaugural 100 Most Sustainable Companies list in 2018.

Additionally, we are a DiversityInc Top 50 company for the second consecutive year, which is a testament to our emphasis on embracing and leveraging diversity and inclusion globally.

Mike will go over our 2019 guidance in a few moments, but I'd like to mention a few highlights related to our sales growth plan and provide some summary comments on Slide 10.

As the foundation of our sales growth rate is the rising global consumer demand for great taste and healthy eating, consumers have an increased interest in creating flavor experiences with bold, rich authentic flavors while also demanding convenience.

Additionally, consumers are focused on fresh, natural and recognizable ingredients with greater transparency around the sourcing and quality of food. Flavor continues to be an advantaged global category, and our products inspire flavor exploration and are the essential complement to fresh real food.

We deliver flavor across all markets and through all channels and are aligned with the consumers' demand for flavor, convenience, health and sustainably minded business practices.

Our alignment with these long-term trends, our breadth and reach, combined with our execution against effective strategies, positions us well to meet increased consumer demand both through our products and through our customers' products and drive sales growth.

In 2019, we'll continue to differentiate our brand, build capabilities and make investments for growth that will continue to move McCormick forward.

Across both segments, we have confidence in our ability to drive sales through strong brand marketing programs, continued focus on customer intimacy, our opportunities to expand distribution and, of course, new products. New products are integral to our sales growth. In 2018, 8% of our sales were from product launches in the last 3 years.

In 2019, we expect new product sales growth to be even higher because, in 2018, we were focused on integrating and growing Frank's and French's. In our consumer segment, new product innovation is an important way to differentiate our brand and stay relevant with the consumers.

We have a robust global pipeline of new product launches in 2019 that renovate brand, inspire flavor exploration and experimentation and meet the demand for convenience, health and transparency.

And in our flavor solutions segment, we will continue to capitalize on our culinary foundation and customer collaboration, both of which differentiates us with customers.

This unique combination allows us to continue our new product momentum as our customers continue to move their portfolios to on-trend flavors and more natural and better-for-you products while ensuring that taste is not compromised.

We're looking forward to sharing more details regarding our 2019 growth plans and market dynamics in just a few weeks at CAGNY.

To summarize, on Slide 11, before turning it over to Mike, we achieved top-tier financial results in 2018, delivered by both strong underlying business performance and the incremental impact of our acquisition of the Frank's and French's brands that are driving strong momentum in sales growth.

In the consumer segment, we finished the year with strong total U.S. consumption, and fourth quarter growth in our EMEA and APZ regions were the highest of the year. In our flavor solutions segment, we continue to grow through winning with customers on new products and existing business.

We are balancing our resources and efforts to grow sales with our work to lower cost, build fuel for growth and higher margins. We have a solid foundation. And in an environment that continues to be dynamic and fast paced, we are ensuring we remain agile, relevant and focused on long-term sustainable growth.

Our experienced leaders and employees are executing against our strategies, which are designed to build long-term value for our shareholders, and with our 2018 results, they have again proven to be effective. We are confident this effectiveness will continue in 2019.

I want to recognize McCormick employees around the globe and thank them for their efforts and engagement, which drive our momentum and make us succeed. Looking forward, with this engagement and our effective strategies and momentum, we are well positioned to achieve continued growth in 2019. Thank you for your attention.

And it is now my pleasure to turn it over to Mike for additional remarks on our 2018 financial results and the details on our 2019 guidance.

Mike?.

Thanks, Lawrence, and good morning, everyone. I will now comment on our fourth quarter performance and full year results as well as providing more detail on our 2019 outlook. Starting on Slide 13. During the fourth quarter, we grew sales 2% in constant currency.

Both our consumer and flavor solutions segments delivered top line constant-currency growth in each of our 3 regions. The consumer segment grew sales 2% in constant currency. This growth was driven by all 3 regions, with strong growth in Asia Pacific and EMEA.

On Slide 14, consumer segment sales in the Americas rose 1% in constant currency versus the fourth quarter of 2017. This increase was driven by pricing actions. Volume growth was flat due to trade inventory reductions, as mentioned by Lawrence.

In EMEA, constant-currency consumer sales were up 3% from a year ago, primarily driven -- due to broad-based volume and product mix growth, driven by brand marketing support as well as new products in the U.K. and continued momentum in the organic product line in France.

Partially offsetting this growth was the pricing impact of trade promotional activities related to new products. We grew consumer sales in the Asia Pacific region 10% in constant currency, led by China growth, with strength in new World Flavor sauces, ketchup, chicken bouillon as well as herbs and spices.

Turning to our flavor solutions segment and Slide 17. We grew fourth quarter constant-currency sales 3%, which was attributable to broad-based growth across all regions. In the Americas, flavor solutions constant-currency sales increased 2%, driven by increased sales to quick service restaurants and continued flavors momentum.

This was partially offset by the elimination of some low-margin business as well as the global realignment of a major customer sales from the Americas to EMEA. In EMEA, we grew flavor solutions sales 5% in constant currency.

This increase was primarily driven by pricing as well as the previously mentioned global realignment of a major customer's sales from the Americas to EMEA. In the Asia Pacific region, flavor solutions sales grew 3% in constant currency as higher sales to quick service restaurants were partially driven by the timing of our promotional activity.

Across both segments, adjusted operating income, which excludes the transaction and integration costs related to the acquisition of our Frank's and French's brands and special charges, declined versus the fourth quarter of last year by 3%, which included a 1% unfavorable impact of currency.

In the consumer segment, adjusted operating income declined 3% to $228 million, which in constant currency was a 2% decline. The flavor solutions segment was also down 3% to $70 million, and in constant currency, that was a 1% decrease.

The decline in both segments was partially due to unfavorable product mix, higher freight costs and investments to drive future growth. In the consumer segment, the unfavorable mix was primarily driven, as Lawrence mentioned earlier, by lower sales of high-margin holiday items due to trade inventory reductions.

Our investments to drive future growth included an increase in brand marketing of 7% or $7 million versus the fourth quarter of last year, and we began the process to modernize our information technology systems, including the replacement of our ERP system.

Additionally, the flavor solutions segment had an unfavorable transactional impact of foreign currency exchange rates. For the fiscal year, the increase in adjusted operating income in constant currency was 19%, and we expanded adjusted operating income margin 110 basis points, with both segments contributing to the growth.

The consumer segment grew constant-currency adjusted operating income 13% while increasing our brand marketing and investments by 18%. The flavor solutions segment grew constant-currency adjusted operating income 34% versus 2017. Our flavor solutions strategy to migrate our portfolio to more value-added categories is evident in these results.

The shift in our portfolio, combined with CCI, has increased flavor solutions adjusted operating margin to 14.2%, an expansion of 230 basis points in 2018.

As seen on Slide 22, in this fourth quarter, adjusted gross profit margin, which excludes transaction and integration expenses, declined 30 basis points versus the year-ago period, driven by unfavorable product mix, partially offset by CCI-led cost savings.

We ended the full year with a 180 basis point increase, driven by the accretion impact from the addition of the Frank's and French's portfolio as well as CCI-led cost savings and favorable product mix across the core business.

Our selling, general and administrative expense as a percentage of net sales increased by 40 basis points from the fourth quarter of 2017. Leverage from sales growth and CCI-led cost savings was more than offset by increases in both brand marketing and freight expense as well as spending related to our information systems modernization.

Below the operating income line, other income increased $7 million. The increase in other income was driven due to a gain on the sale of a building we vacated as part of the office consolidation into our new global headquarters, which Lawrence mentioned earlier.

The expenses we incurred related to the office consolidation reduced operating income for the year by approximately $4 million. Turning to income taxes on Slide 23. Our fourth quarter adjusted effective tax rate was 19%, which reflects the favorable impact from a lower U.S. corporate tax rate as compared to 26.2% in the year ago period.

Our fourth quarter adjusted rate was lower than anticipated due to the favorable impact of discrete items, principally a higher level of stock option exercises. For the full year, our adjusted tax rate was 19.6% compared to 26.1% in fiscal 2017.

Income from unconsolidated operations for both the fourth quarter of 2018 and the full year was comparable to the respective year-ago periods. For 2019, we expect a low single-digit increase in our income from unconsolidated operations.

At the bottom line, as shown on line -- on Slide 25, fourth quarter 2018 adjusted earnings per share was $1.67, up 8% from $1.54 for the year-ago period, mainly due to a favorable adjusted income tax rate. This increase included an unfavorable impact from currency. On Slide 26, we summarized highlights for cash flow and the year-end balance sheet.

Our cash flow provided from operations ended the year at a record high of $821 million compared to $815 million in 2017.

For the fiscal year, our cash conversion cycle was significantly better than the year-ago period, down 21 days, as we executed against programs to achieve working capital reductions, such as extending payment programs with our suppliers and inventory management programs. We returned a portion of this cash flow to our shareholders through dividends.

Additionally, we reduced our acquisition debt in the fourth quarter by $209 million, which brings our total acquisition debt reduction in the fiscal year to $545 million. And we have now paid down over 50% of the term notes related to the acquisition. We finished the year with a debt-to-adjusted-EBITDA ratio of 4x, which was ahead of our target.

This strong progress positions us well to achieve our 3x target by the end of 2020. Our capital expenditures were $169 million in 2018 and included the completion of our regional manufacturing facility in Thailand and spending related to our new global headquarters.

In 2019, we expect our capital expenditures to be higher than 2018 to support our investments to drive growth, particularly the transition of our ERP platform.

We expect 2019 to be another year of strong cash flow, driven by profit and working capital initiatives, and our priority is to continue to have a balanced use of cash, making investments to drive growth, returning a significant portion to our shareholders through dividends and to pay down debt.

Let's now move to our current financial outlook for 2019 on Slide 27. We are well positioned for another year of solid performance with our broad and advantaged flavor portfolio, effective growth strategies and focus on profit realization. As Lawrence mentioned, we continue to expect solid constant-currency growth for fiscal year 2019.

We estimate, based on prevailing rates, a 2 percentage point unfavorable impact from currency rates on net sales, adjusted operating income and adjusted earnings per share. We expect the impact of unfavorable currency will be greater in the first half of the year than in the second half.

At the top line, we expect to grow sales 1% to 3%, which in constant currency is a 3% to 5% projected growth rate. This increase will be entirely organic growth, with no incremental impact from acquisitions.

The growth will be driven primarily by higher volume and product mix as well as the impact of pricing to offset an anticipated low single-digit cost increase. Our 2019 adjusted gross profit margin is projected to be 25 to 75 basis points higher than 2018, in part driven by our CCI-led cost savings.

We expect to increase adjusted operating income 7% to 9% from $942 million in 2018, which in constant currency is a 9% to 11% projected growth rate and reflects our continued focus on profit realization. Our cost-savings target is approximately $110 million, and we expect brand marketing to be comparable to 2018.

Our 2019 adjusted effective income tax rate is projected to approximate 22% based upon our estimated mix of earnings by country, in addition to our state tax rates.

This projection is lower than our underlying effective tax rate of 24% due to the favorable impact of a discrete tax item which occurred during the first quarter of 2019 related to our entity structure.

Our full year 22% outlook versus our 2018 adjusted effective tax rate of 19.6% is approximately a 300 basis point headwind to our 2019 adjusted earnings per share growth. Our guidance range for adjusted earnings per share in 2019 is $5.17 to $5.27.

This compares to $4.97 of adjusted earnings per share in 2018 and represents a 4% to 6% increase or 6% to 8% in constant currency. This increase includes the expected significant tax headwind I just mentioned.

In summary, we are projecting solid growth in our 2019 constant-currency outlook for sales, adjusted operating profit and adjusted earnings per share, following record double-digit performance across each objective in 2018.

I'd like to let you know that we will be adopting 2 new accounting standards in the first quarter of 2019 on a retrospective basis. With the adoption of these 2 standards, we expect no impact to net income and only a geography shift between income statement line items.

We also do not anticipate these adoptions would materially impact growth rates or other expectations we provided in our 2019 financial outlook. This morning, we have provided summary points regarding this topic in the appendix of our presentation, and further discussion of these changes will be included in the 10-K we file this evening.

On a final note related to our guidance, turning to Slide 28, I want to discuss our performance versus our constant-currency long-term financial objectives. We evaluate our performance against our long-term objectives every several years, partially because of the variability which can occur year-to-year related to acquisition activity.

As a reminder, we have an objective to grow sales 4% to 6%, with base business, new products and acquisitions each contributing 1/3. So excluding 1/3 from acquisitions, our growth expectations will be to grow sales approximately 3% to 4%. Additionally, our objective is to grow adjusted operating income 7% to 9%.

Then, by using leverage gained through our capital deployment activities, including our share repurchase program, our objective is to grow adjusted earnings per share 9% to 11%.

As we have previously stated, after making our Frank's and French's acquisition, we have curtailed acquisition activity and our share buyback program as we delever and therefore use our cash flow to pay down debt. As mentioned earlier, we are making significant progress to leveraging.

And in line with our original plan, our acquisition activity and buyback program will remain curtailed in 2019. From a sales perspective, our 2019 guidance of 3% to 5% is in line with our long-term growth objectives without incremental acquisition growth.

Our adjusted operating income guidance is 9% to 11%, which is actually above our long-term growth objectives. Despite these strong operating expectations, the adjusted effective income tax rate increase I mentioned before is a significant headwind to our 2019 adjusted earnings per share growth.

Looking at our performance over a 4-year period, using the 2019 guidance I've just reviewed, our compounded annual growth rates from 2015, from before the Frank's and French's acquisition, to 2019, the first full year these brands are in our base, are projected to exceed our long-term goals for each objective, even including the negative effect of currency experienced during this period.

As Lawrence mentioned, our foundation is strong, our strategy is effective, and we are generating results in line with our objectives. I'd like to now turn it back to Lawrence for some additional remarks before we move to your questions..

Thank you, Mike. Now that Mike has shared our financial results and outlook in more detail, I would like to recap the key takeaways, as seen on Slide 29. We delivered another year of record results in 2018. Despite trade inventory reductions, we achieved strong organic sales growth for the year.

We significantly grew adjusted operating income while also increasing brand marketing and achieved Frank's and French's results in line with our plans. We ended 2018 with the strongest consumption trend in years in our consumer business and solid growth in every region for flavor solutions.

Our 2019 constant-currency outlook reflects strong operating performance, driven by our solid foundation and continued momentum. Our earnings per share growth was robust despite a significant tax headwind, and we're confident that 2019 will be another successful year and we will create additional value.

And importantly, we're continuing to deliver differentiated results while significantly investing for growth to build the McCormick of the future. And we'll share more about these investments at CAGNY in a few weeks. Now let's turn to your questions..

[Operator Instructions]. Our first question comes from the line of Andrew Lazar with Barclays..

I guess, my -- first, I'm looking at -- was the replenishment issue that you talked about at a key customer -- or customers, were those really just in McCormick's category or categories? Or is this something you think we'll hear more about from peers as we go forward? And then a 3% headwind to Americas consumer that you mentioned is obviously less of a headwind to the overall business.

It still seems like maybe organic sales growth, even excluding that, might have come in a little short of where like consensus was for organic sales growth in the quarter. So I wonder if there were any additional areas that came in differently around the top line than maybe you anticipated that are worth mentioning..

Thanks, Andrew. I'm going to start with the first part of that question, the replenishment issue. There's been a general trend for all of our customers to be working their inventories lower, as you know, and others have reported on it. The particular issues that impacted us in the fourth quarter were -- really had 2 parts to it.

The first part was the move by a key customer as well -- actually, a handful of key customers to reduce their inventory levels. Overall, it is odd timing for them to do this for our category, but it may have made sense for them across their broader store. And for us, of course, the fourth quarter is the real peak.

And I would expect you to hear from others saying similar things regarding that portion of the trade reduction, and I believe, actually, some of our peers have already commented on this in calls, those who have come ahead of us.

There was a part, though, that was unique to us, and that is there was a large customer, who's name I'm not going to use, that had change in their internal store replenishment system. This was actually switched on in error by them.

And so that had a big impact in that their warehouses and their stores did not recognize each other's order numbers, and as a result, stores were not replenished. That's going to be a change that is unique to us. This customer is making that transition broadly, but just for our category, it was scheduled for much later next year.

We would have run all the beta tests and so on, on it and would have had a different experience if it had been done in a planful way. And again, it was an error, internal hit, at the customer, and we are still working through this in a sense that for every order, we have to do, literally, a workaround to get the stores restocked.

So that part is unique to us. We've highlighted this as a 3% headwind overall to our business in the -- to our Americas business in the quarter. We're not rounding up to get to that number. We have a pretty good handle on our ability to quantify it. We -- it was holiday items, it was specific customers, and we really know what it was.

Mike, do you want to go further on that?.

I think you got it..

Our next question comes from the line of Robert Moskow with Crédit Suisse..

I guess I have two questions. The 9% to 11% constant-currency EBIT growth target for 2019 now sounds rather aggressive given that -- what's demonstrated here in fourth quarter, is that you ended up vulnerable to a lot of the trends that are happening across the food space. You had inventory reductions. You mentioned some freight costs.

And I just want to know, how do you get from the sales guide to the EBIT guide? I know you have your normal cost-savings programs. But you also mentioned mix was a headwind in fourth quarter. Why wouldn't it be a headwind in 2019? And then I have a follow-up..

Rob, this is Mike. I'll start this one. Let's talk about fourth quarter first because you talked about -- we talked about product mix in the fourth quarter. A significant portion of that is really related to the trade inventory issues. These are our highest margin holiday items, so that was a significant hit to our fourth quarter operating profit.

We also did take the opportunity in the fourth quarter -- we -- just like we did in the third quarter, we had some benefits from stock options, which is below the operating profit line. So some of those savings, we invested those in brand marketing, up 7%. We took the opportunity to start investing in our IT refreshment program.

So if you look at 2019, though, you're going from the 3% to 5% down to 9% to 11%. We've talked about keeping brand marketing flat. We took the opportunity, as I said, in the fourth quarter to really invest and drive back consumption in the fourth quarter, got it to a level we feel comfortable expanding in 2019.

While we're going to get more effective and we're going to have more working media in 2019, that's going to give us about 100 basis points right there, keeping that flat. We're also -- we're getting more synergies from the Frank's and French's, the second year of that. So we're going to ramp from last year additional Frank's and French's synergies.

Our CCI focus really is -- we look at both cost of goods sold and SG&A. We're really leaning in there also. And some of the things that happened in the fourth quarter, we talked about the move into the new building, we're not going to have those costs next year.

So it's a variety of things that aren't going to happen in 2019 that we feel very strongly about giving this guidance..

Okay. And then my follow-up is -- I did an inventory report on the broader group back in October, and McCormick popped up as the company that had been shipping at a growth rate that was well above the Nielsen-measured consumption for quite a while.

You had called out that there are other channels that are not measured by Nielsen, so that was a big portion of the disconnect. And you also pointed out that you always do a conservative job of assuming inventory reductions during the course of the year.

So I guess, given what happened here in fourth, like how much comfort do you have that you have good visibility of how much inventory is really at the trade and that you head into 2019 and that this will truly prove episodic? Or have you assumed another inventory burn again in 2019?.

Sure, Rob. I'm going to take this to start. And Mike, join me if I miss anything here on this. But this was an extraordinary situation. It's not the normal pattern that we've experienced. Normally, we see a drawdown in Q1, our Q1 that coincides with a lot of our customers' end of year, and then relative flatness for the rest of the year.

This impact that happened in fourth quarter was really extraordinary and does not reflect a build of inventory previously. This is -- it's quite discrete with a small set of customers or one very large customer that had the biggest impact. It was devastating to their stores, their -- to the inventory. This was not an intentional move on their part.

And as a result, their stores had tremendous out-of-stocks through the holiday season. And so it just -- it's hard to imagine that retailer taking inventory down further than they did because they literally ran themselves out of product.

In terms of our looking forward, we always include, in our plans and in our sales guidance, a level of inventory of drawdown -- I shouldn't say always, but we have for the last several years. And we've included in the guidance for sales for next year further reduction in inventory across the trade, not necessarily at those customers specifically.

But this timing that happened, with this -- both the size and the timing of it and of course -- and the products involved, we're surprised this happened to us at the most sensitive time of year for us, right, as we are coming to not only the peak consumption period but also the cutoff on our fiscal year.

We don't get a do-over on Thanksgiving, and so this had -- really did have a big impact for us..

Our next question comes from the line of Alexia Howard with Bernstein..

Could I ask about the flavor solutions business? It's -- up until this quarter, it was doing really incredibly well on profit growth, top line growth. Clearly, the profits took a bit of a pause on that trajectory this time around.

Was there something that happened? Did the contracts get lost or is this just lapping tougher comps from a year ago? And what's the prognosis from here? Does it step down to some sort of more normal level? Can the margins continue to expand?.

Alexia, I'm going to just say a word about this, and I'm going to give it to Mike. But this -- the flavor solutions business is always pretty lumpy. And so there's more volatility in the quarter-to-quarter results on that. I think if you look at the whole year, we're very pleased that we don't see any issue.

We actually are quite pleased with how we've come out of the year on flavor solutions, and our outlook is as optimistic as it has been.

Mike?.

Yes. I'd say, too, within the flavor solutions business, a couple of things had happened in the quarter. We had -- and I mentioned this on the call.

We had a bit of transactional effect, some unfavorability, which impacted not -- the whole company, too, from an operating profit perspective, but hit -- because of our footprint with some of the currencies but also unfavorable product mix. In some of -- as Lawrence said, flavor solutions can be lumpy.

In some of our regions, the growth was more on core products versus LTOs. LTOs generally have higher margins. So you'll have these sometimes when our customer is advertising. Something we've done for a long time is a base product that has a lower margin that might have a little bit of product mix negative. So we saw some of that this quarter, too..

Our next question comes from the line of Ken Goldman with JPMorgan..

One for me. In each of the last, I think, seven years by our math, your initial guidance for your tax rate has proven a bit conservative, meaning you guided to a higher tax rate than, I guess, what you ultimately reported.

Just wondering, is there any reason we should think 2019 will be different? Given history, it seems reasonable to expect your tax rate to come in below the 22% you guided to today, but just trying to get a feel for what you're thinking there this coming year..

David, this is Mike. I'll take this one. We generally -- we don't -- sorry, Ken. I was saying David. Yes, we have been favorable on our tax, but a big part of that is we don't forecast discrete tax items. But if you think about this -- I'll talk about this year first before I talk about next year.

I mean, before the tax act, we might have an underlying rate of 28% to 29%. And we said guidance at the beginning of this year after the tax act was about 24%, and we came in slightly below 20%, so about a 400 basis point favorability.

300 basis points of that was the stock option exercises, which, one, we don't forecast for and we don't know when it's going to happen. So there's another 100 basis points of other stuff, tax settlements, things like that, but we really don't forecast discrete tax items. For '19, underlying tax rate is about 24%, similar to this year.

As we've kind of gone through an exhaustive process recently going through the regs that were just released by the Department of Treasury, we did some tax planning. That's why we said, look, this is a significant discrete tax item that's hitting early in the year. We're calling 22%. There could be some stock option exercises.

There could be some other discrete tax items, but we want to give you at least a benchmark of what we see is there. And hopefully, it is favorable, but we believe there's some judgment there..

That's helpful -- no, very helpful, Mike. And my follow-up is -- you talked about low single-digit raw material cost inflation for the year. Forgive me, I don't think that includes transportation costs. And correct me if I'm wrong, but you're one of the first food companies to really provide detailed guidance for the upcoming calendar year.

And I'm just curious if -- on that front, whether it's transportation, logistics, however you want to sort of define it, things that are not raw material necessarily, if you're seeing any sort of easing of pressure on that area..

No, we throw it all in there. Yes, we throw it all in, yes..

And then, if I could ask just a quick clarification then within that just to get a better sense of transportation.

Are you seeing the easing in that particular part of it?.

Well, we've seen -- we know '18 was a significant increase from '17. And we've had a lot of activities in North America primarily through our CCI program to mitigate the costs as we see going into 2019. But we do -- we still do see inflation there, which we've built in..

We're not seeing an easing there..

Our next question comes from the line of Adam Samuelson with Goldman Sachs..

Maybe a question just on the trajectory, first on organic, both in the fourth quarter and then into '19, on the Frank's and the French's business because they're now in the organic base.

Just trying to make -- disaggregate the inventory trade reduction in the quarter, which clearly impacted the consumers Americas business, but would have thought that the Frank's and French's now coming into organic would have been -- would have helped your business or your perform -- reported performance more.

Just help me think about how those businesses are performing on an underlying basis. It sounded like the trade reductions were more legacy McCormick items..

Adam, I'm glad you asked that question because in answering a couple of the earlier questions about inventory reduction, we didn't talk about the other side of the -- of what was happening, which is that our consumption has been incredibly strong.

We came out of the year with the strongest consumption performance for a fourth quarter in the last 5 years. It's one of the strongest quarters for a period of time, and that's part of what gives us optimism around 2019. The Frank's and French's items were no exception to that.

So our consumer offtake as measured through scanner data on Frank's was up 9% in the quarter. Our offtake on mustard was almost flat.

And if you recall, our goal that we announced when we bought this business was that we were going to drive growth on Frank's and we were going to stabilize the French's mustard, and I think we're making great progress on that.

And so I think that, that consumption trajectory on both the acquired brands and also on our core business gives us confidence in the sales numbers for 2019. Mike, you wanted to comment on the inventory....

Well, yes. Let me talk, too, about -- in the fourth quarter, some of that advertising investment was driving Frank's. We talked about how it was the first time we've advertised in Frank's in 7 years. We have new advertising which just dropped this week that's going to support the first quarter, a lot of new products coming in the first quarter.

Frank's and French's was impacted, as Lawrence said, by the trade inventory reductions, though. And -- but we expect a strong first quarter from both brands because of the consumption we're seeing..

Okay, that's helpful. And then just on the guidance, between the sales and margin expansion goals that you've laid out, is there any notable delineation between the consumer and the flavor solutions business and -- i.e.

is the base expectation that there's faster growth in flavors or consumer, more margin expansion in one versus the other?.

No, we generally feel they're pretty comparable between the two..

Our next question comes from the line of David Driscoll with Citi..

I've got two questions for you. You talked about the ERP system. We're sensitive to changes in ERPs. Can you just walk us through kind of the risk points on when we need to be focused on, on the big modules and kind of when they come into play? And I think you called it out in the fourth quarter, a part of it.

I don't know what's already taken place versus what has to take place on the ERP system change..

Well, Dave, as you know, this is like a 2 to 3 year process. We're kind of in the early days here. So anything -- I wouldn't -- our guidance considers any expense that we're going to occur on ERP. A lot of it is capital. And we've talked about in the call we're going to have an increase in capital versus this year.

Our capital this year, we had a target of $200 million. Due to a lot of timing issues, it came down to about almost $170 million. We don't see it -- we see some incremental capital investment next year, but I wouldn't ascribe a large impact. I mean, our guidance is our guidance, and it incorporates all those impacts..

And let me clarify....

As we get more detail, David -- I'll commit to giving you more detail. But as I said before, we're pretty early days on this, but we have made some investments in the fourth quarter to help jump start that..

Yes. It wasn't really a question on the capital spending. It was a question on ERP systems and the disruption that they sometimes cause when the execution doesn't go well. There's always certain modules within these ERP systems that are far more sensitive than other modules.

And I was just looking for a piece of information related to when the significant modules go into play..

Well, I would say -- if I could just pick this up. So as you know, this -- it sounds like you understand exactly what's involved with these projects. So there is a long period of scoping, of code writing, of building before you get your first go-live on anything. So we're in that upfront stage of it right now. Our first go-live is not until 2020.

But this year is the year when we do all of the work getting ready. And I'll just add to it that we're due for it. We did our first SAP go-live in 2002. We still are -- have done some go-lives on SAP. Even this year, it's been a long and drawn out process. What was the new system has now become the legacy system. SAP, as you know, goes out of maintenance.

It becomes obsolete in 2023. We want to be ahead of the curve on getting -- migrating to the next generation of ERP and not be doing it at the last minute. So everybody's going to have to make this -- anybody that's on SAP is going to have to make this transition over the next several years, and we're getting started on it.

We did incur some expense but we got -- in the fourth quarter and will throughout 2019. But we really won't -- we won't get to our first actual go-live until 2020. I'll add that it is our plan to move quickly. It's taken almost 20 years to roll out SAP across our whole company.

We're not going to take 20 years to do the refresh, which will still be an SAP product, the SAP HANA..

I like the 20-year comment. My second question relates to your flavor solutions. It's a follow-up to one of the earlier questions, but I want to think a little bit longer term. Flavor solutions margins went from about 7.5% 5, 7 years ago to over 14%, a massive increase.

When I look at just the pie breakdown, your ingredients proportion of the flavor solutions is kind of small now, so I think that was the low-margin stuff that you've slowly but surely been exiting and then adding other high-margin pieces like flavors.

Lawrence, what I don't get a sense on, but I get this question a lot from investors, is how much more is there to go. Can you double the size of the flavors portion of flavor solutions? And is that high enough margin to keep pushing the segment margin significantly higher over some course of time? This isn't a next-year question..

I understand. This is a great long-term question, and I appreciate the opportunity to talk about something besides the inventory reduction in the fourth quarter. This is, in fact, our strategy that you just described for our flavor solutions segment. We are migrating the portfolio to more of the flavor and seasoning end.

We certainly still see value in some of the customer foodservice products and condiments that we do, but away from that more commodity ingredient end of the spectrum. And we see a long runway of opportunity for enhancing our margin from this migration of our portfolio to value-added products.

You see from the public company competitors who are more pure play on flavor, their margins are significantly higher to us -- than us. We aspire to move more in that direction. And I'm not sure how high up is, but it's a long way from where we are now. And there are parts in the other slices of the pie, too.

For example, in condiments, there's low-margin condiments and higher margin. So obviously, we would optimize this as we go..

Our next question comes from the line of Chris Growe with Stifel..

I had just two questions, if I could. So the price was a little less than I expected in the fourth quarter. I know you talked about some new products and spending around those new products. I'm sure it was more -- the factor that weighed on pricing is more promotional driven.

So my question is, does -- did pricing line up with cost inflation in the fourth quarter? Do you expect that in '19? Or maybe are more new product costs going to weigh on that pricing line overall?.

Chris, this is Mike. I'll take that. I mean, if you look at the split by region -- and I'll focus on consumer. I mean, pricing for total consumer is only up 0.2%. But in the Americas, it was up 0.6%, and that was covering the cost of inflation, some of the pricing we took early in the year on recipe mixes; Asia Pacific, 1.5%.

EMEA, where we had really strong overall sales performance from kind of the relaunch of our first choice spice line, we had obviously some trade promotional slotting fees, things like that, which is negative price. So EMEA was negative 2.2%. So that's what drove the whole consumer down. So that -- and that was a significant restage for that region.

So we don't see -- we see in '19 our pricing actions ramp from last year, and anything we need to do to cover for low single-digit cost inflation, we see those covering all of it..

Right. Other than the cost of new distribution, we don't see any extraordinary pressure on promotion expenses. I think it's revenue management that's been net positive for us..

And would pricing offset cost inflation in your view, from a high level, for 2019? Is that your expectation?.

I'm sorry, I'm not sure I got the question.

Can you repeat that?.

Would your price -- do you expect your price realization to offset cost inflation in 2019 from a high level, not quarter-to-quarter, that kind of thing? But do you expect that you'll be able to price to your cost inflation in 2019?.

Yes. We also have CCI programs, things like that, too. There's a broad basket of tools..

Okay, yes. And just one final one. In the fourth quarter, I think you had a gain on the sale of a building. You also had some costs related to moving into the new facility. Were those costs spread out over the quarters and this fourth quarter had that benefit of that gain? And I'm just curious how this applies to the comps for 2019..

Generally, Chris, they were in the second half. We think our -- we moved most of the people July, August, September time frame and had the grand opening actually in October. So a lot of the expenses were second half..

And then the gain, did that more than offset the costs or....

Yes, it does. We said that on the call..

Yes. I think we said that on the call. It was -- between them, they net to two..

Net to two, yes. The $4 million spend hurt operating expense. There is a geography difference there, obviously. The gain was below the operating profit line. All the expenses were above..

Our next question comes from the line of Rob Dickerson with Deutsche Bank..

I have two really quick, really different questions.

The first question is just any color -- I know you don't always -- obviously, don't guide quarter-to-quarter, but just any color around kind of cadence for '19 really just with respect to organic sales trajectory sequentially and then also just the margin, right? It looks like your guidance is -- implies, call it, about 100 basis points operating profit margin.

I know you said earlier in response to a question that it's not hard to get there just given -- keeping the media spend flat. But I'm curious like -- obviously, just every year as you report Q4, you're already through half of Q1.

And given this holiday issue and some of the replenishment piece was -- let's say your quarter ended in November but then you also had December baked in Q1.

Did some of that kind of -- did some of the replenishment issues flow through into Q1? And then is more of the margin expansion more back-half loaded just given timing of '18 spend and then also the inventory issue you had in Q4? Sorry if that's a little wordy. I think you get my point..

I think we got the concept, Rob. This is Mike. I'll start this with we do not provide guidance by quarter, as we always say. However, we talked about 2% FX unfavorable during the year. That's really first half loaded, so there's going to be some negative FX there. First quarter is our smallest issue. As Lawrence said....

Smallest quarter..

The smallest quarter, right. No, our first quarter is our smallest quarter of the year. We are still working through some of the replenishment issue. But we also talked about how there's first quarter discrete tax items, so that's going to help our tax line. We'll make some investments.

As we talked about before, it's really like an IT and other things early in the year. Being the smallest quarter of the year, there may be more impact on that. But again, for the full year, the 100 basis points increase in operating profit, we're comfortable with that..

And I'll say there may be -- as we look ahead to some events that might happen in this volatile environment such as Brexit, we may -- depending on how they are unfolding, we may have to incur some expense to prepare us for managing our risks through a Brexit, for example..

Yes. I guess I would just mean potential outside tool manufacturing, sourcing or....

Yes, inventory build, things like that..

Yes. Okay, fair. And then second question, just more focused on RB Foods. I realize some additional growth coming from non-tracked channels and tracked channels. It looks like year-over-year growth, definitely so strong or better even with Frank's. So that's a net positive. It looked like it peaked more in that August-September period year-over-year.

And then French's, as you said, is stabilizing but still a drag. So I'm just curious with respect to '19. I didn't hear a lot or anything on potential innovation around the growing season.

How do you actually increase momentum behind French's? And then secondly, just the international opportunity, which you didn't -- discussed upfront on the acquisition, I think, the last call or two but didn't hear much about today. I don't know if that's more CAGNY related..

Yes, Rob, exactly. I think we'll cover this more thoroughly at CAGNY. We'll look at our -- and we'll talk more about our 2019 plans and beyond at CAGNY. But we're really pleased with the performance of RB Foods. I don't want to let this go without saying that. And you mentioned a peak around August.

Actually, our consumption on these products increased sequentially quarter by quarter throughout the entire year. The fourth quarter consumption was the strongest that we've had, but there was some impact from that inventory issue on the French's and Frank's brands.

So I'm not -- I actually don't have it at my fingertips, what the shipment was, but the consumer offtake was the strongest that we've had.

And we think we've got great momentum going forward into 2019 on those brands, which we are now not really -- we're not breaking them out because we're treating them just like any of our other major brands in terms of our reporting.

But when I say major brands, these are the second and third largest brands in our portfolio after McCormick so they certainly get a lot of attention. Mike, did you want to....

Our next question comes from the line of Jonathan Feeney with Consumer Edge Research..

A couple of questions. First, I guess, following up from your conversation with Rob and your comment that -- Rob Moskow, I should say, and your comment on consumption. It sounds like non -- because I'm looking at the measured data. It sounds like non-measured -- this was a record Q4 for you. Non-measured continues to grow terrifically for you.

If you could just comment about non-measured, especially online, how that's going at least third -- fiscal third versus fiscal fourth.

And then second question is, what are the big sources of gross margin mix? And within that, what impact on gross margin specifically -- how big of an impact could this one set of seasonal high-margin items have had on your gross margin broadly? It seems like there's other gross margin mix items that are more structural.

And maybe comment on how those play into your hope -- your plans for gross margin expansion in 2019..

So I'm going to start, and then I'm going to pass it over to Mike. The strong consumption includes unmeasured channels, but we're specifically pointing to the measured channels so that everybody can see it.

So if you looked at the IRI data in aggregate over the last -- going back 5 years, you'd see that, through measured channels, this was the strongest fourth quarter in the last 5 years. And then on top of that, we had good performance in our unmeasured channels as well that contributed to the growth.

I think I tried to cover that in my prepared remarks, but I want to really underscore that you can see it in the measured data when you look at -- for us, IRI. The impact....

Lawrence, would that also be true -- would that comment also be true of your non-measured channels, that same acceleration there?.

I'm not sure that the growth rate was higher, but it was definitely a contributor to the positive growth..

Incremental..

And at a higher rate than the scanned sales. So I just want to put that out there. Now the margin impact from the -- again, I can't underestimate the -- and Mike will talk about this a little bit. This happened at the worst possible time for us. And the items that we have at the holiday time are very seasonal in nature.

They are among our highest-margin part of the portfolio. If you follow -- Jon, you followed us for a long time. You see the difference in our margin structure quarter by quarter. That's driven by that sort of holiday items. And when we don't have that, that's a big impact on the bottom line..

Yes, that's basically why. I mean, these are high-margin items. Even Frank's and French's, some of the trade inventory hit them. That's high-margin item, as we talked about, too.

Things like the recipe mixes, core herbs and spices, those are -- if you look at quarter by quarter, as Lawrence said, fourth quarter is always our highest quarter, and actually, late in the quarter is usually higher..

Mike, could I say that was the primary contributor then to gross margin contraction, that one issue?.

Yes, definitely, definitely..

Ladies and gentlemen, our final question for this morning will come from the line of Akshay Jagdale with Jefferies..

So one follow-up, goes back to, I think, Andrew's first question. So I know you don't give quarterly guidance, but for the fourth quarter, we have the benefit of quarterly guidance given how you guide, right? So the sales growth in the quarter was about 300 basis points below what you had expected. So the inventory stuff is about 100, 150 bps.

It does imply that something else was weaker, but it -- from everything you've said, it sounds to me like the main issue really is still the inventory issue, right? So can you just help me bridge that? Because it does look like, from a purely quantitative standpoint, there are some other factors that have -- might have been weaker than you had expected..

Akshay, this is Mike. And for the year, we gave guidance of 12% to 14%. And we came in basically at the bottom of that, 11.9%. The implied guidance for the fourth quarter was 0.9% to 7.4%, a pretty big range because we don't take the year guidance down to a 1% spread. We came in at 0.6% reported. So we were right at the bottom.

The trade inventory programs were 1.5% impact or so. You think about $20 million to $25 million of net sales. That would have put us up in that 0.9% to 7.4%. So I think we're comfortable with the guidance we were giving for the fourth quarter implicit in our full year guidance.

So a little bit at the low end of the range, but we would have been well within the Q4 implied guidance..

Got it. So overall, the main standout is this inventory issue and what gives you confidence is, clearly, the consumption trends are very, very strong and accelerating in many areas.

That's the main takeaway from your perspective on sales, right?.

Akshay, that's exactly right because, in the long run, sales are going to follow the consumer. And that's why we spent so much time in our remarks today on the consumption trends.

And while the trade inventory reduction happened at the worst time for us and we're very disappointed on the impact that it had on the end of the year, our consumer consumption is strong and our international business is strong and our flavor solutions business continues to power on.

We believe this is a short-term challenge, and a long-term upward trend fueled by the alignment with really long-term consumer trends is a sound strategy. And I'll add a talented and engaged workforce, and that gives us a lot of confidence in our 2019..

Ladies and gentlemen, that concludes our question-and-answer session today. I'll turn the floor back to Mr. Kurzius for any final comments..

Thanks, everyone, for your questions and for participating on today's call. McCormick is a global leader in flavor. We're differentiated with a broad and advantaged portfolio, which continues to drive growth. We're responding readily to changes in the industry with new ideas, innovation and purpose.

With a keen focus on growth performance and people we continue to perform strong globally and build shareholder value. I'm pleased with our strong results to start the year, and I'm confident in our continuing momentum for growth. I look forward to reporting to you on the shareholder value we'll continue to create..

Thank you, Lawrence, and thanks to all for joining today's call. I apologize for those who we did not get to take their call today. And if you have any further questions regarding today's information, you can reach us at 410-771-7140. This concludes this morning's conference call. Thank you..